It has been an eventful six months for Eddie Stobart Logistics (ESL). The shares were suspended in August after a review of its accounting practices led to a signicant profit warning and the departure of the chief executive. They were reinstated with the announcement of the half-year results in late February. So, while much of the details outlined in the results had already been flagged in mid-November, the more than 90 per cent share price plunge can be seen as the crystallisation of a half-year of investor frustration.
The biggest new information was the size of the group’s impairments, coming in at £169m for the six months to May 2019 having previously been flagged at “no less than c. £50m”. A considerable jump, to be sure, but the share price dive probably has as much to do with shareholders’ significant dilution at the hands of private equity rescuer DBAY, which took a 51 per cent stake in Greenwhitestar Acquisitions (the subsidiary company that holds the group’s trading entities) in exchange for £70m in much-needed liquidity.
Adjustments following the auditor’s review put paid to any earnings in the period, with the group posting an underlying operating loss of £11.6m. The group expects to report a small loss at the full year, but noted it “could be greater”, and was subject to potential adjustments by the group’s auditors.
EDDIE STOBART (ESL) | ||||
ORD PRICE: | 11p | MARKET VALUE: | £18.4m | |
TOUCH:10.75-11.25 | p | 12-MONTH HIGH: | 101 | LOW: 4.5 |
DIVIDEND YIELD: | nil | PE RATIO: | na | |
NET ASSET VALUE: | * | NET DEBT: | £158m |
Half-year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2018 (restated) | 335 | -15.1 | -3.80 | 1.54 |
2019 | 421 | -200 | -51.3 | nil |
% change | +26 | - | - | - |
Ex-div: | na | |||
Payment: | na | |||
*Negative shareholder equity, Last IC view: na, 6 Dec 2019 |