9th Jul 2019 09:42
(Alliance News) - Eddie Stobart Logistics PLC on Tuesday said earnings for its first half will be at the lower end of management expectations, but the full-year outcome will be in line.
The transport and logistics group also said it will restate its prior year results due to accounting issues found by new Chief Financial Officer Anoop Kang.
Shares in the company were trading 4.8% lower at 68.99 pence each in morning trade.
Eddie Stobart said slower than anticipated productivity improvements in the Contract Logistics & Warehousing business and short-term problems from the exit of a contract in early March mean adjusted earnings before interest and tax will fall short of management expectations for the six months to May.
Underlying Ebit in the six months to May 2018 was GBP18.1 million, up 7.1% year-on-year.
First-half revenue is estimated to rise 25% year-on-year due to organic growth and a full contribution from Pallet Network Group Ltd. Interim revenue the prior year was GBP359.3 million, also rising 25% on the year before.
On a like-for-like basis, revenue is predicted to rise 8% amid continued organic growth and new contract wins.
Eddie Stobart in June agreed to acquire pallet distribution services provider Pallet Network for GBP52.8 million, on a cash and debt-free basis.
Eddie Stobart said an accounting review by new CFO Kang into prior year financial statements has highlighted problems which will be addressed by making an adjustment. Kang joined the company on April 1.
The company intends to reduce the GBP55.3 million adjusted Ebit for its year ended November 30, 2018, by GBP2 million. It will also record a GBP11.5 million adjustment to retained earnings since November 30, 2017.
The non-cash adjustments will hurt 2019 adjusted EBIT by GBP1.6 million, but the results are anticipated to be in line with the board's estimates.
The restatement primarily relates to the lease accounting involving four legacy sites. The company intends to provide further details in its first half results scheduled on August 29.
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