Another licence to print money

MEETING kings, presidents and prime ministers is all in a day's work for Jeremy Marshall. Two weeks ago, the chief executive of De La Rue, the world's largest banknote printer, helped President Nursultan Nazarbayev of Kazakhstan to open a new printing plant in an old tank factory. Then last Thursday at the Dorchester Hotel, he entertained 120 ambassadors accredited to the Court of St James.

Yet Marshall is not one to trumpet his international contacts. "Banknote issues are invariably approved by central bank governors, and the designs themselves are often approved by the head of state. But I don't like to name-drop," he says with a winning grin, the words tumbling out of his broad mouth in rapid succession. "Many of the countries we work for are concerned it not be known publicly."

Such discretion comes easily to Marshall, 57, his wiry frame still trim from squash three times a week. His friends describe him as reserved, even shy, and his long, lean face, beneath greying hair, shows it. "He comes across initially as a very quiet individual," said a former colleague from his 16 years at Hanson. "He's thoughtful and intelligent with a lot of firmly held opinions."

The reticence of Marshall, who earned pounds 444,000 in 1994, masks a consuming ambition, say those who know him. "I've always been very determined, not particularly well endowed with ability," he said in his office - small for a chief executive. "The reason I'm here in this job is partly good fortune." De La Rue's results tell a more flattering story: since he took over running it in 1989, the company's pre-tax profits have climbed from pounds 22.2m to the pounds 151.5m announced last week.

Much of that was, indeed, due to chance. The collapse of the Soviet Union in 1989 created a host of new countries, many of which wanted their own currencies to distinguish them from Russia. Marshall grabbed the opportunity. "I'm close to the countries in the Commonwealth of Independent States," he said, recalling the first time an East European man gave him a bear hug. "He was a great burly fellow, and I was enveloped in him - after a few vodkas, of course."

Marshall's contradictory personality stems from his roots in Feock, Cornwall, where his parents moved because his father, a civil engineer, wanted a quiet life. When he was nine, his parents sent him to Sherborne, the public school in Dorset. "It was a great sacrifice for them," he said. "I was determined to make it pay off."

On leaving school, he joined the Royal Signals, trained to be an officer and served a tour of duty in Germany. Returning to the UK, he read chemistry at Oxford, where he met Juliette Butterley, his future wife. "I've never been good-looking," he said. "She was the prettiest girl there, and I had to fight quite hard for her."

Jobs at Wiggins Teape, the paper company, and Riker Laboratories, in pharmaceuticals, followed. In 1967, he was hired by Ciba, the Swiss chemicals group, to launch its UK agrochemicals subsidiary. Four years later, faced with moving to Basle with Ciba or taking an offer from Lord Hanson to be managing director of one of the group's subsidiaries, he chose the latter.

At Hanson, he was in his element. The company philosophy is to let the heads of operating subsidiaries get on with the job, and Marshall thrived on the independence. "Jeremy took on board the Hanson culture with enthusiasm," said his former colleague. Marshall now tries to grant that freedom to his own managers but admits it is difficult. "If you see things not going well, there is that temptation to say, 'Look, it should be like this.' "

Hanson's flat management structure gave him little room to advance, however. His ambition to sit on the group's main board was never realised, and he left in 1986 for his first post as chief executive, with pre-privatisation BAA.

"It was a complete clash of culture," Marshall recalls, referring to his battles with Sir Norman Payne, then BAA's chairman. While Marshall expected a free hand as chief executive, Sir Norman was intent on maintaining day-to-day control. The fight came to a head over the appointment of executives who would be working with Marshall after Sir Norman retired. Frustrated, he left in 1989 to try to turn De La Rue around.

Ironically, the same drive that has boosted De La Rue's earnings almost sevenfold in six years has taken the company from the relative obscurity he says it needs to headline-grabbing controversy. Both the prolonged negotiations for its takeover of Portals, the speciality paper-maker, and its pivotal role in Camelot, the operator of the national lottery, have raised public awareness of the company.

The Portals saga dragged on for the better part of 1994, after leaked reports about executive perks at Portals soured the initial pitch. Marshall eventually won the day, paying pounds 682m in December. "Some people say we paid too much. I strongly believe it was the right thing for De La Rue to do. Whatever niche you're in, you want to be the market leader."

The two companies were already closely linked, with Portals supplying the speciality paper on which De La Rue printed. Both had to stay one step ahead of forgers. "Anti-counterfeiting features are not good enough at the moment," Marshall admits. "If you're involved in both the paper- making and printing you've got the best combination for beating the counterfeiters."

While the Portals takeover will quickly fade into history, Camelot is here to stay. The consortium has already come under fire after the Independent on Sunday reported that children as young as 12, well below the legal 16, were able to purchase tickets. "It's like selling drinks to under- age people in pubs," said Marshall. "It's difficult to control."

Camelot has also been criticised for the size of its profits - which look excessive against the deal offered by the flamboyant entrepreneur Richard Branson. Branson said he and his partners would run the lottery without taking a cut. Marshall, a Camelot director, denies that the consortium will earn more than pounds 1bn from the concession, arguing that over seven years it will be less than pounds 320m - about pounds 45m a year. De La Rue, which has a 22.5 per cent stake, will also get pounds 9m of business providing the tickets.

De La Rue knew a long time ago that running lotteries was a good business. It has been involved in gambling for years, making scratch cards for several countries as well as machines for sorting lottery tickets. But when the idea for a national lottery in Britain surfaced in the 1980s, it faced stiff opposition.

"Mrs Thatcher was dead against it, and while she was around there was no chance of getting it off the ground," he said. Once John Major replaced her as Prime Minister, however, the political ground shifted. "We ourselves were not directly lobbying for a change in the law," he insisted, but he conceded that De La Rue's main partner, the American lottery giant Gtech, was backing the campaign with cash.

The lottery is likely to come under increasing attack from the anti-gambling lobby. And that could create problems for Marshall with his board. "I had quite a task persuading the rest of the De La Rue board to participate in something as high-profile as the lottery."