Last checked at 
* Firm raises doubt over ability to continue as going
concern
* Shares fall by as much as 23%
* Cuts dividend to tackle debt, speeds up restructuring
(Adds detail on debt, credit score, analyst comment, graphic)
By Yadarisa Shabong
Nov 26 (Reuters) - Banknote printer De La Rue
warned on Tuesday of "significant doubt" that it can continue as
a going concern, knocking about 40 million pounds off its market
value, and said it would scrap its dividend to tackle mounting
debt.
The news 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 ($513.20 million)
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 cut
overhead costs and focus on inventory management.
The over 200-year old firm, which holds the contract to
design and manufacture the Bank of England's new polymer notes,
said its net debt had risen 58% to 170.7 million pounds, above
its current market capitalisation of roughly 140 million pounds.
De La Rue said dividend and pension payments and inventory
buildup due to changes in production schedules were among the
reasons for its ballooning debt.
The company has a 275 million pound loan due in 2021.
Before Tuesday's announcement, De La Rue's combined credit
score - which measures how likely a company is to default in the
next year on a scale of 100 (very unlikely) to 1 (highly likely)
- was 4, Refinitiv Eikon data showed.
The company said its directors had considered a number of
factors in reaching their conclusion on its outlook, including
its half-year trading results and its access to credit.
De La Rue also faces competition from state-run and private
firms, which has pressured its banknote printing margins, and
the increasing popularity of digital payments.
"We might have simply reached the point where De La Rue is
best positioned as part of a bigger company rather than as a
standalone entity," said Russ Mould, investment director at AJ
Bell.
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 do better in the second half as it expects
more favourable currency volumes and benefits from cost cuts.
De La Rue expects annual adjusted profit of between 20
million pounds and 25 million pounds..
($1 = 0.7794 pounds)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Shounak
Dasgupta, Alexander Smith and Jan Harvey)
