ESL.L Share News (ESL)

(Sharecast News) - Eddie Stobart Logistics warned on Monday that it continues to expect full-year profits to be "significantly below" the board's expectations after a difficult first half and said it is considering raising new equity.
The company, whose shares remain suspended while it looks into accounting irregularities, said underlying earnings before interest and tax for FY19 will miss expectations following an "adverse" performance against an "ambitious" budget, alongside delays in the implementation of operational efficiencies.

It also highlighted provisions made against customer recoveries, a significant proportion of which relate to underperforming contracts which have been exited during the year and delays on a "significant" property consultancy project and lower than planned property utilisation.

The group, which expects first-half revenue and underlying EBIT of about £450m and £10m to £11m, respectively, has begun a wide-ranging review of its operations as it looks to improve operating margins and its overall financial performance.

Eddie Stobart said it is considering all strategic options, including the potential for raising new equity, and is currently engaging with its lenders. It has decided not to declare any dividend for the year.

The company announced earlier this month that it had received a preliminary expression of interest from DBAY Advisors Limited, which already owns a 10.1% stake.

In a trading update in July, it said a review of its accounts had uncovered some errors and that EBIT for the year to 30 November 2018 would be around £2m lower as a result.