Eddie Stobart Logistics delivers accounting concerns
Eddie Stobart Logistics, the UK supply chain, transport and logistics group, has warned it faces a £2m cut in its previously reported income, after a review conducted by its new CFO identified accounting issues
11 Jul 2019
In its half-year trading update for the six months to 31 May, the company said Anoop Kang, who took up the post as CFO in April, had overseen a review of its prior year financial statements. This has highlighted matters which will be addressed by means of a prior year adjustment.
The company stated: ‘The likely cumulative effect on the results for the year ended 30 November 2018 will be to reduce adjusted EBIT by approximately £2m.
‘There will be an adjustment to retained earnings as at 30 November 2017 of approximately £11.5m, primarily relating to the lease accounting involving four legacy sites. The majority of these adjustments are non-cash and do not affect our banking covenants.
‘Although the 2019 adjusted EBIT impact of these matters is £1.6m we expect to deliver a full year result in line with the board’s expectations.’
The statement also revealed that first-half results are expected to be towards the lower end of management expectations. This is partly due to slower than anticipated productivity improvements in the group’s contract logistics and warehousing business, as well as the short term adverse effect on the operational efficiency of its transport network from exiting, in early March, a problematic contract.
At the end of last year Eddie Stobart announced the result of a formal tender process which saw it appoint PwC as auditor, replacing KPMG.
Eddie Stobart Logistics is listed on the London Stock Exchange’s Alternative Investments Market (AIM) and operates across a broad array of core sectors including e-commerce, manufacturing, industrial & bulk, retail and consumer. From its headquarters in Warrington, the business operates around 2,500 vehicles, 4,000 trailers and 26 distribution centres throughout the UK and Europe, providing its services to a range of national and international customers.