* Raises doubt over ability to continue as going concern
* Shares fall by as much as 20%
* Cuts dividend to tackle debt, speeds up restructuring
(Recasts leads, updates share price fall)
By Yadarisa Shabong
Nov 26 (Reuters) - De La Rue warned of "significant
doubt" that it can continue as a going concern on Tuesday,
knocking around 40 million pounds off the market value of the
British banknote printer, which scrapped its dividend to tackle
mounting debts.
The warning by De La Rue follows a series of setbacks,
including two profit warnings, an investigation into suspected
corruption in South Sudan and the loss of a 400 million pound
contract for Britain's new passports.
"We have concluded there is a material uncertainty that
casts significant doubt on the Group's ability to continue as a
going concern," De La Rue said in a statement, adding that it
was focused on delivering a turnaround plan.
De La Rue, which appointed Clive Vacher as its chief
executive last month, said it would conduct a review of its
business that will speed up its restructuring plan to reduce
overhead costs and focus on inventory management.
Its shares were down more than 22% to 136.4 pence at 0920
GMT.
The company said its directors had considered a number of
factors in reaching the going concern conclusion, including its
trading results in the first six months and its impact on future
performance, as well as its access to credit.
De La Rue, which produces passports for 40 countries, said
its net debt had risen by more than 58% to 170.7 million pounds
as its banknote printing struggles with depressed margins amid
stiff competition and growing popularity of digital payments.
The company posted a half-yearly operating loss of 9.2
million pounds, compared with a profit of 10.1 million pounds a
year earlier, chiefly due to restructuring charges.
Although its adjusted operating profit plunged 87% to 2.2
million pounds for the six months ended Sept. 29, De La Rue
forecast it would fare better in the second half as it expects
more favourable currency volumes and benefits from cost cuts.
De La Rue expects annual adjusted profit between 20 million
pounds ($25.66 million) and 25 million pounds..
($1 = 0.7794 pounds)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Shounak
Dasgupta and Alexander Smith)