Transport and logistics group Eddie Stobart Logistics is making a prior year adjustment to its results for the year to end-November 2018. Although the 2019 adjusted EBIT impact of these matters is £1.6m the company expects to deliver a full year result in line with the board's expectations.
Stobart said the likely cumulative effect on the results for the year ended 30 November 2018 will be to reduce adjusted EBIT by approximately £2m. There will be an adjustment to retained earnings as at 30 November 2017 of approximately £11.5m, primarily relating to the lease accounting involving four legacy sites. The company said the majority of these adjustments are non-cash and do not affect our banking covenants.
The company said the accounting error that has resulted in the adjustment came to light following the appointment as CFO of Anoop Kang on 1 April 2019 and a review that was carried out into the group's prior year financial statements.
PcW was the group’s external auditor for the financial year ended 30 November 2018. In its annual report for 2018 the group said: “The Audit Committee has reviewed the independence of PricewaterhouseCoopers LLP and the conduct of the audit for the financial year ended 30 November 2018. The Committee concluded that the external audit process has been effectively run and that PricewaterhouseCoopers LLP remain independent and has recommended their appointment by shareholders at the Annual General Meeting in May 2019 as external auditor for the financial year ending 30 November 2019.”