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Eddie Stobart warns on profits, scraps dividend, mulls equity raising

By BFN News | 01:41 PM | Monday 16 September, 2019

Transport group Eddie Stobart Logistics said it was considering strategic options including raising equity and had scrapped its dividend, while warning of a an annual profit 'significantly below' its expectations. The company had in August warned that it was clarifying the impact of 'certain accounting-related items' following a review of its interim results for the six months through May. On Monday, it said that whilst work on the accounts remained ongoing, it expected first-half revenue of around £450m and underlying Ebit of £10m-to-£11m. Net debt at 31 May was expected to be about £155m. For the full year, although a traditional second-half weighting was still expected, underlying Ebit would be significantly below the board's expectations. Eddie Stobart pinned the warning on 'an adverse performance against an ambitious budget alongside delays in the implementation of operational efficiencies'. It also cited provisions made against customer recoveries and delays on a significant property consultancy project. The company said its balance sheet had been further impacted by the reduction in earnings, poor cash collection and its historical dividend policy. 'Consequently, the company is relying more heavily on its available debt facilities and, accordingly, current group net debt has increased from the amount at the half-year end as indicated above,' it said. 'The company, alongside its advisers, is considering all strategic options -- including the potential for raising new equity -- and is currently engaging with its lenders.' 'The board has also resolved not to declare any dividend for the 2019 financial year.' Last week, Eddie Stobart received a preliminary expression of interest from DBAY Advisors in relation to a possible offer for the company to be made by funds managed by DBAY. 'There can be no certainty either that an offer will be made nor as to the terms of any offer, if made,' Eddie Stobart said Monday. 'A further announcement will be made when appropriate.' Story provided by

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