De La Rue shares plunge as firm warns about uncertain future
Passport and banknote firm De La Rue has seen more than a fifth wiped off its stock market value after the firm warned there was a risk it could collapse if recovery efforts fail.
The firm sparked another plunge in shares - down as much as 24 per cent - as it alerted in half-year results over a "material uncertainty that casts significant doubt on the group's ability to continue as a going concern".
While it said this was only likely in a worst case scenario, one expert said De La Rue was now left "teetering on the brink".
The share price drop - which has seen shares plummet by two thirds in the past six months alone - means De La Rue owes more in net debts than its stock market value.
De La Rue manufactures about a third of the world's banknotes and employs more than 2,500 people. Trade union Unite has told ITV Tyne Tees that it has 250 members at the firm's plant in Gateshead.
It has suffered a torrid past couple of years, having suffered heavily from losing out on the contract to print British passports to a French company.
The group has warned over profits twice in recent months and its half-year results laid bare the extent of its woes.
De La Rue posted a £12.1 million pre-tax loss for the six months to September 28 against profits of £7.1 million a year earlier.
Underlying operating profits crashed 87.1 per cent to £2.2 million over the first half.
New chief executive Clive Vacher - who replaced former boss Martin Sutherland, who quit in May after a previous profit warning - said he is taking "urgent actions" under a turnaround plan to revive its fortunes.
The firm is also halting shareholder dividend payments and ramping up cost-cutting.
On its first half performance, Mr Vacher said the group had been hit by a raft of management changes and an increasingly competitive banknote printing market.
He restructured the group into two divisions - authentication and currency - earlier this month to lead a recovery and pledged a "full review" will be done by the end of next March.
He is also cutting costs further and faster, going beyond the £20 million a year in savings expected under its previous targets.
The firm said it was too early to comment on any potential impact on jobs.
As well as dire trading, Mr Vacher is also having to contend with a Serious Fraud Office investigation into alleged corruption at its South Sudan business.
And there is an £18 million black hole in the accounts after the company revealed in May that the Venezuelan central bank has been struggling to pay its bills.
Mr Vacher said:
He added that it will "take some time" to get the management team on a steady footing.
But he added: "We have already identified and started to implement the urgent actions needed to stabilise the business and allow us to complete the review."
De La Rue is expecting a better second-half performance as cost savings come through and amid improved trading in its currency arm.
It is forecasting underlying operating profits of between £20 million and £25 million for the full-year.
Tom Usher, from Unite, spoke to ITV Tyne Tees.
Unite national officer Louisa Bull added: