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Accounting issues claim the scalp of Eddie Stobart’s CEO

Eddie Stobart Logistics has announced the departure, with immediate effect, of CEO Alex Laffey. He will be replaced by Sebastien Desreumaux, currently CEO of subsidiary group iForce and Head of Contract Logistics.

As part of the group's review carried out in conjunction with the auditors in relation to the interim results, the board 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. In a statement to the London Stock Exchange the firm said that 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.

The company’s shares have now been suspended on AIM and interim results postponed from 29 August 2019 to some time in early September.

 On 9 July 2019, the group had revealed that a review conducted by new CFO Anoop Kang had highlighted the need for a Prior Year Adjustment that would reduce adjusted EBIT by approximately £2m. There will be an adjustment to retained earnings as at 30 November 2017 of approximately £11.5m, primarily relating to the lease accounting involving four legacy sites. Stobard said the majority of these adjustments were non-cash and do not affect banking covenants. The 2019 adjusted EBIT impact of these matters is £1.6m.

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