Eddie Stobart boss quits and shares are frozen as haulage company investigates accounting glitch
- Stobart not yet sure of the impact of the accounting error on its first-half profits
- It will delay the publication of its first-half results until early September
- Boss Alex Laffey stepping down with immediate effect
Eddie Stobart, the haulage and logistics firm known for its individually named green trucks, has waved goodbye to its boss and suspended its shares as it investigates an accounting error.
The company, whose investors include under-fire fund manager Neil Woodford, said it is still unsure how badly the accounting error, which emerged earlier this year, will effect its half-year profits.
However, earnings are expected to be ‘significantly lower’ than previously forecast, while revenues are set to fall in line.
Accounting error: Stobart also said it would review its current dividend policy
Meanwhile, chief executive Alex Laffey has left the firm with immediate effect and will be replaced by Sebastien Desreumaux, who currently heads up contract logistics and its ‘iForce’ business.
Eddie Stobart admitted last month that it had overstated its 2018 profits by £2million as a result of some accounting errors.
Today the company said that, as part of a review, it is taking a more ‘prudent approach’ to revenue recognition, receivables and provisions.
It added that it would need to review its current dividend policy.
Its interim results were scheduled to be published on August 29, but will now released in early September as it carries out the investigation.
In the meantime, the group has asked for its shares on London’s junior market to be suspended.
The news comes as a further blow to Neil Woodford, who is a major shareholder in the company with an estimated 23 per cent stake.
Neil Woodford is a major shareholder in Stobart with a 23 per cent stake
Russ Mould at AJ Bell said Stobart’s statement was a way of saying ‘we were at best too aggressive with our accounting’.
‘No surprise then that adjusted profit is expected to be significantly lower than expected when the numbers are eventually published in early September,’ he added.
‘These developments, and an earlier admission that 2018 profit had been overstated by £2million, follow the appointment of new finance chief Anoop Kangits. This at least suggests the company’s financial controls might have more rigour going forward.’