Eddie Stobart Logistics (ESL) chief executive Alex Laffey has stepped down from his role with immediate effect after a review of the company’s accounting practices determined that operating profit for the first half of its financial year would be “significantly lower than anticipated”. The shares have been suspended from trading and the release of the half-year results delayed until sometime in early September, with a review of the dividend policy underway.
The logistics company announced that 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 procedures”.
In July, it was announced that 2018 full-year adjusted operating profit would be reduced by £2m and 2017 retained earnings by £11.5m, mainly due to lease accounting relating to four legacy sites, following a review of prior year financial statements by chief financial officer Anoop Kang, who took up the role in April. It was also announced that these adjustments would have a £1.6m negative impact on 2019 adjusted operating profit.
Mr Laffey will be replaced by Sebastien Desreumaux, currently chief executive of the iForce business and head of contract logistics.