Transport group Eddie Stobart has suspended trading following a review which found a £2m “accounting issue”.
In July the company announced in its trading update that following the appointment of its CFO, Anoop Kang on 1 April 2019, a review carried out into the group’s prior year financial statements found “matters which will be addressed by means of a Prior Year Adjustment”.
As part of the review carried out in conjunction with the group’s auditors, the board said it is applying a more “prudent approach” to revenue recognition, “re-assessing” the recoverability of certain receivables, as well as considering the appropriateness of certain provisions.
It was also announced that Alex Laffey, chief executive of the group, would stand down with “immediate effect”. Sebastien Desreumaux, currently CEO of iForce and head of contract logistics, will take over as chief executive, and is expected to be appointed to the board in “due course”.
Eddie Stobart said in a statement: “Pending clarification of the impact of these items, the Group has applied to suspend trading of the company’s ordinary shares on AIM, which will be effective from 7.30 a.m. today (23 August). The group previously announced that the company would release its interim results for the six months to 31 May 2019 on 29 August 2019.
“However,the ongoing review will result in a delay to the publication of the Group’s interim results,and it is now anticipated that the group will release its interim results in 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.”