(Reuters) – Eddie Stobart Logistics <ESLE.L> said it expected operating earnings for the first half to be at the lower end of its expectations, hurt by a slowdown in some businesses and as it exited a “problematic” contract, sending shares down 9% in early deals.
The company also said on Tuesday its 2018 adjusted EBIT would be restated and reduced by about £2 million after a review of previous statements under new Chief Financial Offer Anoop Kang.
Eddie Stobart, which provides transportation and warehousing facilities to construction companies, retailers and industrials, appointed Kang as finance chief in April and had reported underlying earnings before interest and taxes (EBIT) of £55.3 million for last year.
“This (reduced first-half expectation) is partly due to slower-than-anticipated productivity improvements in our Contract Logistics and Warehousing business and the short term adverse effect on the operational efficiency of our transport network from exiting, in early March, a problematic contract,” the company said.
Nevertheless, the company expects full-year performance to be in line with its expectations, as it anticipates a strong second half.
Eddie Stobart, which operates a network of more than 2,000 vehicles, 3,500 trailers and 24 distribution centres throughout UK and Europe, was not available for further comments on the contract it exited.
(Reporting by Yadarisa Shabong and Pushkala Aripaka in Bengaluru; editing by Gopakumar Warrier)