Tuesday 9 July 2019 8:12 am

Eddie Stobart first half profits will be 'at lower end' of board expectations amid accounting error

Haulage giant Eddie Stobart expects first half adjusted operating profit to come in at the low end of expectations, it said this morning.

Shares fell 1.9 per cent this morning.

The forecast follows a slowdown in some sectors and the firm’s decision to exit “a problematic contract” earlier this year. The firm said the shortfall was in part down to slower-than-expected productivity in its Contract Logistics and Warehousing units.

Read more: Eddie Stobart keeps on trucking with revenue and profit up strongly

It added profits were suffering from the “short term adverse effect” from ditching a problem contract in March.

The haulier said it would also have to recalculate elements of last year’s financial results after a review by new finance boss Anoop Kang. This was down to an accounting error.

The review is likely to reduce earnings for the 12 months ending 30 November 2018, which had been listed at £55.3m, a four per cent year-on-year rise.

The move is also likely to hit this year’s earnings by £1.6m, the firm added.

Eddie Stobart provides transport and storage services to construction companies, retailers and industrials.

“As in previous years our volumes will be weighted substantially towards the second half of the year and the Company expects to deliver full year results in line with the Board’s expectations,” it added.

The trading update revealed revenues for the period increased by 25 per cent on the same period in 2018. This was a result of “organic growth” and a full first half contribution from newly-acquired division The Pallet Network. 

Read more: Eddie Stobart revenues beat market expectations thanks to new purchases

Like-for-like revenues were up eight per cent, reflecting “continuing organic growth” and a number of new contract wins.

Main image credit: Getty

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