Shares in Eddie Stobart plunge by 93% as trading resumes
Shares in one of the North West’s best know firms have tanked after they resumed trading this morning following a six-month break.
Warrington-based Eddie Stobart was forced to suspend trading in its shares in the wake of an accounting error.
And shares in the haulage firm plummeted by 93% when trading resumed this morning.
The firm has been struggling for months and a rescue package was put together in December.
Shareholders backed a deal which saw private equity firm Douglas Bay Capital Fund inject £70m into the business for a 49% stake.
The company had warned it risked going into administration without further funding.
A statement said: “This transaction provided £70 million of additional liquidity, putting the Eddie Stobart group on a stable footing and providing a platform from which to develop.”
Shares in Eddie Stobart were suspended after details of the accounting error emerged.
The company’s chief executive was fired as a result.
Alex Laffey, who spent four years at Eddie Stobart, was replaced by Sebastien Desreumaux.
Shares were valued at 71p last year but plunged to just 6p today after trading resumed.
The company published its delayed results for the six months to 31 December this morning.
The firm said a £169.2m impairment charge reflected the current business performance and challenging trading conditions.
Eddie Stobart made a statutory loss before tax of £199.8m for the last 12 months.
The company is predicting a small underlying earnings loss for the full year but warned the loss could be greater.
In the six months to May 31, 2019, revenue rose 26% to £421.3m.
Shares in the group closed at 11.9p per share at the close of trading last night (February 26).