Bank chooses company that will print Britain's new plastic banknotes

PA/AOL Money
De La Rue chosen for plastic notes
De La Rue chosen for plastic notes

The Bank of England has named banknote firm De La Rue as its preferred bidder to print the country's first plastic bank notes.

The Basingstoke-based firm, which has produced bank notes since 1860, is expected to sign an extended 10-year contract that will see it print standard notes from next year, as well as the plastic notes from 2016.

De La Rue has printed notes at the Bank's plant in Debden, Essex since 2003 under a contract due to end in April.

Shares in the company, which prints more than 150 national currencies, rose by 3% on the news. It will now co-operate with the Bank's due diligence checks ahead of the contract being formally signed in the autumn.

The decision to print plastic banknotes followed three years of research into the merits of polymer notes over current cotton paper notes.

The notes, which are coated with a thin film of polypropylene polymer, are harder to counterfeit and stay cleaner for longer.

Over 25 other countries use plastic banknotes including Australia, New Zealand, Mexico, Singapore and Canada.

There are over three billion Bank of England banknotes in circulation with a face value of £58 billion.

During the last five years to August, 6.1 billion banknotes were printed to meet increasing demand and to replace old or withdrawn notes.

De La Rue chairman Philip Rogerson said "We are delighted that De La Rue has been selected as the preferred bidder for this very prestigious and important contract with the Bank of England."

The contract win is a further boost for De La Rue, which last month ended its seven-month search for a chief executive by appointing Martin Sutherland, the managing director of BAE Systems' cyber business, to take the reins.

FTSE 250 company De La Rue had been run by chairman Philip Rogerson after the surprise announcement in February that chief executive Tim Cobbold was leaving to lead exhibitions and conference group UBM.

Investec analyst Thomas Rands said: "The share price has been under severe pressure in recent months given investor concerns over the impact on the financials and sentiment from the potential loss of its highest profile contract."

Read more on AOL Money

2015 debut for plastic banknote

New £5 notes to be made of plastic

Houblon £50 note to be withdrawn

Bank drafts plans for plastic notes

UK Banknotes to Get Polymer Makeover
UK Banknotes to Get Polymer Makeover