(qlmbusinessnews.com via bbc.co.uk – -Fri, 23rd Aug 2019) London, Uk – –
Eddie Stobart has suspended trading of its shares and announced that its chief executive will stand down with immediate effect, as the firm looks into accounting discrepancies.
The firm also warned its results for the first half of 2019 will be “significantly lower” than forecast.
The transport company, known for its green and red lorries, revealed a £2m discrepancy in its accounts last month.
The issues were uncovered in a review of past accounts.
Under new chief financial officer, Anoop Kang, the review found that in 2018 operating profits were overstated by about 4%.
Publication of the firm's financial results for the six months to 31 May 2019 has now been delayed to early September.
The firm warned that profits for that period were likely to be revised down from recent projections, and that it is “applying a more prudent approach to revenue recognition”. The group's dividend policy would also be reviewed, it said.
Outgoing chief executive Alex Laffey, who spent four years at Eddie Stobart, will be replaced by Sebastien Desreumaux.
Mr Desreumaux, formerly head of the group's retail delivery arm iForce, joined the company in July 2018.
The accounting revisions are likely to add to pressure on investment manager Neil Woodford, who has suspended trading in his largest fund due to a dramatic decline in value.
The well-known investor is the company's largest shareholder in Eddie Stobart, with a 22.9% stake.
Eddie Stobart Group shares, listed on the Alternative Investment Market (AIM), a less regulated alternative to the main FTSE exchanges, were down by nearly 50% over the past year before their suspension on Friday.
Founded by Edward Stobart in 1970, the firm operates 2,700 vehicles and 43 logistical hubs in the UK and Europe, and employs around 6,600 people, according to its website.
Its distinctive lorries are a mainstay on British motorways, while its merchandise spin-off offers a wide range of branded goods including model trucks, teddy bears, watches and wrapping paper.
