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Stock market stalwarts face reinvention test

Pension problems, truculent trade unions, high fixed costs, and a penchant for paper are holding back two of London’s oldest companies
Stock market stalwarts face reinvention test

Very old companies tend to fall into one of two categories. Some provide solutions to everyday problems or needs. Coats (COA), which has been manufacturing industrial thread since 1755, is a good example of this. Whatever the century, people have always required clothes, and clothes have always required thread. The second group consists of skillful shapeshifters, who are good at adapting and expanding with the times. Enter Intertek (ITRK), which started life 130 years ago certifying grain cargoes and now quality checks everything from cosmetics to aeroplanes.

A small number of businesses fall between two stools, however. After decades of success, they have watched demand for their services wane, but cumbersome legacy structures have made reinvention difficult. Royal Mail (RMG) and De La Rue (DLAR) occupy this awkward middle ground and both are now in the throes of turnaround plans. But whether they can keep up with the modern world hangs in the balance.


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