Eddie Stobart has warned its underlying profits for 2019 will be “significantly below” expectations as it confirmed it had received a takeover offer from one of its shareholders.
Last month the truck firm suspended shares and announced its chief executive Alex Laffey was standing down with immediate effect after it discovered a multi-million pound accounting error.
Shares will remain suspended.
In a trading update today, Eddie Stobart said it expected underlying profits to fall behind due to “an adverse performance against an ambitious budget” alongside delays in the “implementation of operational efficiencies”.
It said revenue for the first half of the year is expected to be in the region of £450m, while underlying profits would come in between £10m to £11m. Net debt at 31 May is expected to be approximately £155m.
Eddie Stobart also cited “provisions made against customer recoveries” relating to underperforming contracts and delays on a property consultancy project.
It said its chief executive Sebastien Desreumaux had started a review into the firm’s operations in a bid to improve operating margins and its overall financial performance.
“The management team is focused on continuing to deliver excellent customer service and commitment, whilst simultaneously prioritising cash generation within the business,” it said.
The firm also said its balance sheet had been” further impacted by the reduction in EBIT, poor cash collection and its historical dividend policy”, forcing it rely heavily on its debt facilities.
It said it was considering “all strategic options” including raising new equity. No dividend will be declared for the full year.
Eddie Stobart announced earlier this month that it had been approached by Dbay Advisors, one of its shareholders, with a potential takeover offer.
Dbay owns a 10.1 per cent stake in the logistics group, whose brands include Biforce, Logistics People and Speedy Freight, according to data from Refinitiv Eikon.
“There can be no certainty either that an offer will be made nor as to the terms of any offer, if made,” Eddie Stobart said.
Embattled fund manager Neil Woodford owns a 22.9 per cent stake in the company.