(Sharecast News) - Transport and logistics group Eddie Stobart said on Friday that it has requested its shares be suspended from trading on AIM while it takes another look at its accounts, as it announced the departure of chief executive Alex Laffey with immediate effect.
In a trading update back in July, the company said that a review of its accounts had uncovered some errors and that earnings before interest and taxes for the year to 30 November 2018 would be around £2m lower as a result.
In its update on Friday, Eddie Stobart said it was now applying a "more prudent" approach to revenue cognition as part of the review carried out with its auditors in relation to the interim results, "re-assessing the recoverability of certain receivables, as well as considering the appropriateness of certain provisions".
While revenue expectations for the first half are broadly in line with previous guidance, the full impact of these items on adjusted earnings before interest and tax is unclear, the company said, but it is likely to be "significantly" lower than expected last month. As a result, it also intends to review its current dividend policy.
It has requested that its shares be suspended from trading on AIM while it reviews its accounts and the release of its interim results will be delayed from late August to early September.
"The board has full confidence in the ability of Eddie Stobart's management team to deliver an improved performance for the group going forward, and remains confident in the strength of the underlying business," it said.
Sebastien Desreumaux, currently CEO of iForce and head of Contract Logistics, will take over from Laffey. He is is expected to be appointed to the board "in due course".
Russ Mould, investment director at AJ Bell, said: "The distinctive livery on its lorries may have raised a nostalgic smile as you passed them on the motorway, but shareholders in Eddie Stobart Logistics might end up honking their horns in frustration after today's news.
"These developments, and an earlier admission that 2018 profit had been overstated by £2 million, follow the appointment of new finance chief Anoop Kangits. This at least suggests the company's financial controls might have more rigour going forward.
"First investors must wait to see just how bad the damage is in the short-term. And then will look to see if Laffey's replacement, head of its iForce unit Sebastian Desreumaux, and Kangits can steer Eddie Stobart back on course.
"The news will be seen as a further blow to embattled fund manager Neil Woodford, who is a major shareholder in the company."
Oct 16 (Reuters) - Eddie Stobart said on Wednesday DBAY Advisors, its second-largest shareholder, was granted more time to make a firm takeover offer for the haulage company, but former group boss Andrew Tinkler had abandoned any buyout interest....