Passport and banknote firm De La Rue has seen around a fifth wiped off its stock market value after the firm warned it could collapse if recovery efforts fail.
The firm sparked another plunge in shares – down as much as 24% – 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 “teetering on the brink”.
The price drop – which has seen shares plummet by two-thirds in the past six months – 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 said the risks to De La Rue’s future were “very worrying” for its 250 workers at Gateshead and 150 at its banknote printing site in Debden, Essex.
Unite national officer Louisa Bull said: “The potentially precarious future of De La Rue, a major UK manufacturing company, should be ringing alarm bells across government.”
De La Rue has suffered a torrid couple of years, having suffered heavily from losing out to a French company for the contract to print British passports.
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% 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.
But Neil Wilson, chief market analyst at Markets.com, said there may be more pain to come for investors.
He said: “De La Rue is teetering on the brink.
“The profits warning in October – the second this year – was only the meat in the rather unsavoury sandwich.”
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” by the end of March.
He is also cutting costs further and faster, going beyond the £20 million a year 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 having to contend with a Serious Fraud Office investigation into alleged corruption at its South Sudan business.
There is also 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: “We have already identified and started to implement the urgent actions needed to stabilise the business.”
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.