Shares of Eddie Stobart Logistics Plc were suspended Friday after the U.K. trucking firm ousted its chief executive amid an accounting review, dealing a new blow to embattled fund manager Neil Woodford, whose firm controls 22% of the stock.
Stobart, known for its bright green trucks, said CEO Alex Laffey would leave immediately after the review showed earnings estimates were significantly inflated. Financial results due this month won’t now be published until September and the board will reassess the group’s dividend policy.
The revelations at Stobart, which issued a positive trading update as recently as July, comes with Woodford Investment Management already in turmoil following a decision three months ago to block investors in its flagship fund from withdrawing their money. Woodford has seen its holdings in several companies hurt by concerns about their finances, including Burford Capital, which funds litigation.
Laffey, who led Stobart through an initial public offering in 2017, will be replaced by Sebastien Desreumaux, who joined the Warrington, England-based company last year after 20 years at rival Norbert Dentressangle.
Stobart said the review by auditors has prompted it to apply a more prudent approach to revenue recognition and the recoverability of receivables, pointing to “significantly lower” earnings. Results for the six months through May, due next Thursday, will be delayed until “early September.”
The company said it requested that its shares be suspended from trading on London’s Alternative Investment Market or AIM, while saying the board has “full confidence” in the strength of the underlying business. The shares have lost almost half their value in the past year.
Eddie Stobart Logistics Plc is separate from Stobart Group Ltd., which runs Southend airport.
