Eddie Stobart shares open 93 per cent down following suspension
Shares in trucking business Eddie Stobart resumed trading today after a lengthy hiatus, plunging 93 per cent on their pre-suspension price.
The business was forced to suspend its shares after an accounting scandal meant it was unable to publish its results.
In December, shareholders backed a £55m rescue package from private equity firm Douglas Bay Capital Fund (Dbay) after it said it risked going into administration without further funding.
The deal left Dbay with a 49 per cent interest in the logistics company.
In August, Eddie Stobart fired its chief executive and suspended its shares after it discovered an accounting error that would hit its profit by £2m.
The shares were suspended at 71p, but plunged to just 6p today after trading resumed.
The company published its delayed results for the six months to 31 May today.
It recognised a £169.2m impairment charge which it said reflected current business performance and challenging trading conditions.
It announced a statutory loss before tax of £199.8m for the period.
The company said it expected a small underlying earnings loss for the full year, but said the loss could be greater and was subject to confirmation by its auditors.
Revenue grew 26 per cent year-on-year to £421.3m.
The company also restated its results for 2018 and prior years following the accounting errors.
Eddie Stobart said it was considering converting the company into an Aim-listed investing company. It said this would entail the company raising funds before the end of May, to co-invest with Dbay in private equity deals across Europe.
The company said Dbay had agreed that if it becomes an investing company managed by Dbay, it would have the right to purchase up to 49 per cent of the high-interest Pik loan instrument that Dbay used to provide emergency funding to the group.