De La Rue plc (LON: DLAR) have seen their shares crash on Tuesday morning after the firm warned shareholders about ‘significant doubt’ over future trading.

De La Rue is a British company which has its headquarters in Basingstoke. The firm manufacturers paper and security printed products including bank notes, printed passports and tax stamps.

Shares of De La Rue crashed 22.57% on Tuesday to 135p. 26/11/19 12:02BST.

At the end of October, the firm issued a profit warning to shareholders following a speculation about tough market conditions.

Whilst recovery has been made, significant efforts will be required to save an increasingly failing business.

In the update provided this morning, De La Rue have bailed on plans for a dividend this year and warned shareholders about the ability for the firm to continue to operate.

“We have concluded there is a material uncertainty that casts significant doubt on the Group’s ability to continue as a going concern,” it said today as it fell to a £9 million loss.

Net debt has soared while the group warned it has become overly reliant on banknote printing contracts.

The firm said “The risk that the group is not able to generate the necessary cost savings to enable a significant contract to deliver required profitability levels and cashflow risk associated with the unwind of the working capital build from H1.”

De La Rue flagged “a period of significant management change and instability” over its last six months and said it would suspend future dividend payments in an attempt to keep a lid on its net debt.

Shareholders should be alarmed as the former chairman, chief executive and senior independent have left the company which shows that De La Rue could be a sinking ship.

“This has led to inconsistency in both quality and speed of execution,” new CEO Clive Vacher said. “The new board is working to stabilise the management team, which we believe will take some time.”

“De La Rue is teetering on the brink,” warned Markets.com’s chief market analyst, Neil Wilson.

“Far from drawing a line under the previous performance before the arrival of Vacher and [new chairman Kevin] Loosemore, the profits warning in October – the second this year – was only the meat in the rather unsavoury sandwich.”

“The company is on the edge here. There has been trouble in Venezuela and the SFO investigation remains ongoing – but by far the biggest blow and the source of the company’s collapse in market capitalization was losing the contract to make UK passports,” Wilson added.

“I don’t buy the argument that printing banknotes in a cashless world makes them structurally irrelevant – cash in circulation is growing all the time. The need for more secure notes that De La Rue makes is becoming more important, not less. Bad management and decisions seems to be the main reason for the malaise.”

Vacher concluded “We have seen significant changes since the start of the year in the market for currency, including pricing pressure as a result of reduced overspill demand. This has had a material impact on volumes and profitability in H1 2019/20 and it will also take time for the currency market to normalise”

“Our authentication business continues to show good growth and provides some degree of balance to the currency headwinds, while demand for polymer substrate is also exceeding our expectations”.

“In response, we are reviewing our cost base and will make the structural changes that will further strengthen our competitiveness in a challenging market. We continue to focus on building momentum in the higher-margin security feature market and continue to innovate to improve our position in this fast-growing area”.

“Between now and the end of calendar Q1 2020, we will complete a full review of the business and design a comprehensive turnaround plan for the company. In the meantime, we have already identified and started to implement the urgent actions needed to stabilise the business and allow us to complete the review. With strong emphasis on cost control and cash management, coupled with a focus on innovation and reversing the revenue decline, we will become a leaner, more efficient company and drive shareholder value.”

It seems that De La Rue are falling victim to the tough market conditions and Brexit complications which are stalling business.

De La Rue could follow the similar fate of high street retailers such as Mothercare (LON: MONY) and Thomas Cook (LON:TCG).

Shareholders are now expecting the worse, and if De La Rue can make any recovery from this crisis then shareholders will be appeased.

However, it only seems like a matter of time before we see the eventual collapse of De La Rue and shareholders should brace themselves for a turbulent ending.