The global logistics firm Eddie Stobart has announced that its chief executive will stand down after revealing a multi-million-pound accounting error earlier this year.
Last month, the transport and trucking company warned that its results for the first half of 2019 would be substantially lower than forecast.
The revelation came after auditors found a £2 million error in its 2018 accounts.
Releasing a statement in July, Eddie Stobart said the error was likely to reduce adjusted earnings before tax and interest by about four per cent for the period to November 30.
Shares in the AIM-listed group plummeted by nine per cent on news of the statement before trading was suspended.
In a statement to the stock market, Eddie Stobart said it would be “applying a more prudent approach to revenue recognition, re-assessing the recoverability of certain receivables, as well as considering the appropriateness of certain provisions.”
To add to the company’s woes, it has also now revealed that its chief executive Alex Laffey is to step down from his role of four years. He is to be replaced by Sebastien Desreumaux, the former head of the group’s retail delivery arm, iForce.
Announcing the move, a company spokesperson said: “While revenue expectations for the first half are broadly in line with previous guidance, the full impact of these items on Adjusted EBIT is unclear, but it is likely to be significantly lower than anticipated at the time of the Half Year Trading Update on 9 July 2019. As a result, the Board also intends to review the Group’s current dividend policy.
“Pending clarification of the impact of these items, the Group has applied to suspend trading of the Company’s ordinary shares on AIM.
“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.”
The group operates more than 2,700 heavy goods vehicles (HGVs) from across 43 logistical hubs in the UK and Europe.