Eddie Stobart Logistics delays results after £2m accounting error
23 Aug 2019
Eddie Stobart Logistics has suspended trading of its shares on AIM, announced its CEO is to stand down with immediate effect, and is to delay publication of its interim results in the wake of the discovery of a £2m accounting error last month
23 Aug 2019
In in its half-year trading update for the six months to 31 May, the UK supply chain, transport and logistics group said Anoop Kang, who took up the post as CFO in April, had overseen a review of its prior year financial statements. This had highlighted matters which will be addressed by means of a prior year adjustment.
The company stated at the time: ‘The likely cumulative effect on the results for the year ended 30 November 2018 will be to reduce adjusted EBIT by approximately £2m.’
In its latest update, Eddie Stobart Logistics said that as part of the review carried out in relation to the interim results, the company is applying a more prudent approach to revenue recognition, re-assessing the recoverability of certain receivables, as well as considering the appropriateness of certain provisions.
The statement said: ‘While revenue expectations for the first half are broadly in line with previous guidance, the full impact of these items on adjusted EBIT is unclear, but it is likely to be significantly lower than anticipated at the time of the half year trading update on 9 July 2019. As a result, the board also intends to review the group's current dividend policy.’
Pending clarification of the impact of these items, the group has applied to suspend trading of the company's ordinary shares on AIM. It had previously announced that the company would release its interim results for the six months to 31 May on 29 August, but the ongoing review has resulted in a delay with these now expected ‘in early September’.
Eddie Stobart Logistics has also announced that Alex Laffey will stand down as CEO with immediate effect, having joined the company two years ago at the time of its flotation. He is to be replaced by Sebastien Desreumaux, currently CEO, iForce and head of contract logistics.