Eddie Stobart unveils hefty losses as shares plunge

(Sharecast News) - Eddie Stobart Logistics insisted it was back on a stable footing on Wednesday, after the embattled haulage firm finally published long-delayed results and resumed trading on the London Stock Exchange.
Shares in Eddie Stobart were suspended in August after the discovery of an accounting error, which overstated adjusted operating profits by ?2m. The Aim-listed company faced administration before striking a ?55m rescue package with shareholder Douglas Bay Capital Fund (Dbay) in December. Dbay now holds a 49% stake.

Eddie Stobart said on Wednesday: "This transaction provided ?70m of additional liquidity, putting the group on a stable footing and providing a platform from which to develop."

Revenues in the six months to 31 May 2019 grew by 26% to ?421.3m, but the underlying loss came in at ?11.6m, compared to a restated profit of ?600,000 in 2018. The statutory pre-tax loss was ?199.8m, compared to a loss of ?15.1m a year previously.

The numbers were hit by the accounting scandal and a ?169.2m impairment charge, which reflected "current business performance and challenging trading conditions, an increased discount rate associated with higher gearing and a more prudent assessment of medium and long-term forecast profitability," the firm said.

Looking ahead, Edie Stobart - famous for its green and red trucks - said it expected to report a "small underlying EBIT loss" for the full-year, but conceded it could be greater and remained subject to auditors.

The shares fell heavily as trading resumed, and by 1430 GMT they stock had plunged 87% to just 9p. The shares were suspended at 71p.