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Logistics company Eddie Stobart Logistics reported a sharp increase in half-yearly losses as revenue growth was offset by asset writedowns. The company also warned of potential greater losses as it continued its probe into previous accounting measures used to assess its performance.
The company said it expected a small underlying (earnings) EBIT loss for the full year, but also warned the loss could be greater should the current probe into its accounts require a reassessment of performance.
For the six months ended 31 May 2019, the company reported a pre-tax loss of £199.8m, compared with a loss of £15.1m on-year, while revenue increased by 26% to £421.3m.
Following a review of its previous accounts, the company recorded a total impairment of £169.2m across its general transport, iForce, and cash generating units businesses.
Underlying EBIT was a loss of £11.6m, compared with a profit of £0.6m on-year, driven primarily by a 're-assessment of the accounting treatment of property related revenue, the profitability on new contracts being lower than average over their integration period, re-assessment of customer-related recoveries, cost accruals and provisions within the transport operations business and adoption of new accounting standards,' the company said.