(Bloomberg) -- Shares of Eddie Stobart Logistics Plc were suspended after the U.K. trucking firm ousted its chief executive officer amid an accounting review, dealing a new blow to embattled fund manager Neil Woodford, whose firm controls 22% of the stock.
Stobart, known for its bright green trucks, said CEO Alex Laffey would leave immediately after the review showed earnings estimates were significantly inflated. Financial results due this month won’t be published until September and the board will reassess the group’s dividend policy.
The revelations at Stobart, which said as recently as July that earnings were within the range of its expectations, coincide with turmoil at Woodford Investment Management following a decision three months ago to block investors in its flagship fund from withdrawing their money. Woodford has seen its holdings in several companies hurt by concerns about their finances, including Burford Capital, which funds litigation.
Neil Woodford has raised at least 650 million pounds ($796 million) by selling listed assets held in his frozen flagship fund as he prepares for a potential line of clients yanking their money when it reopens, according to Bloomberg calculations based on public filings and market prices.
Laffey, who led Stobart through an initial public offering in 2017, will be replaced by Sebastien Desreumaux, who joined the Warrington, England-based company last year after 20 years at rival Norbert Dentressangle.
Stobart said the review by auditors has prompted it to apply a more prudent approach to revenue recognition and the recoverability of receivables, pointing to “significantly lower” earnings.
The company said on July 9 that sales jumped by a quarter in the first six months, though adjusted earnings before interest and tax were toward the lower end of expectations. It said then that business would be weighted to the second half, while reiterating full-year guidance.
Stobart requested that its shares be suspended from trading on London’s Alternative Investment Market, while saying the board has “full confidence” in the strength of the underlying business. The stock has lost almost half its value in the past year.
Founded as an agricultural concern in the 1940s, the company transformed into a haulage business and grew to become one of Britain’s best-known transport brands. Drivers were required to wear a tie while legions of “Eddie spotters” collected the female names that adorn its trucks.
Stobart Group Ltd., which runs Southend airport, has an 11% stake in Eddie Stobart Logistics, according to data compiled by Bloomberg.
(Updates with company’s prior earnings guidance in sixth paragraph, history in eighth, Woodford share sales in last.)
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