Eddie Stobart Logistics PLC (lon:esl)
Eddie Stobart Logistics – What Is The Company Worth Now?

Eddie Stobart Logistics PLC Financials

ItemCurrent PeriodPrevious Period
Period6 Months6 Months
Adjusted Earnings
Adjusted EBITDA(£12m)£1m
Statutory Profit
Adjusted Profit
Total Debt
Net Debt£158m£115m

Commentary History
No ticker supplied in the url so commentary history can not be collected.
Eddie Stobart Logistics PLC Share Price
Grade:The Black Grade - Shares That I Think Could Collapse To Nothing Or Suffer A Massive Share Issue.
Title: Eddie Stobart Logistics – What Is The Company Worth Now?
Company: ESL - Eddie Stobart Logistics PLC
Share Price Then: 12.5p
Author: Ian Smith
Date: Mon 02 Mar 2020
Comments: The latest accounts, posted Feb 2020 are the delayed ones for the 6 months ending May 2019 and are released at the same time as the share suspension was lifted.

The share suspension was made in Aug 2019 as a result of accounting issues and the result of these accounting issues has been new funds/loans the company and new majority owner in DBay.

The company floated in Apr 2017 at around 162p valuing it at a little bit under £600m, dropping to as low as 71p per share (£251 market cap) when the shares were suspended.

For those new to ESL the structure is a bit odd, ESL owned 100% of Greenwhitestar Acquisitions Limited (GWSA) who actually owned the businesses that we think of as owned by ESL!

After the reorganisation Dbay now own 51% of GWSA shares and ESL 49%, so if ESL was worth 71p per share prior to the GWSA reallocation then it is worth 35.5p afterwards.

The same number of shares in ESL are in issue suggesting a current valuation of £120m and with a current price of 12.5p giving a market cap of £47m there does seem to be a reason to believe in a 25p share price.

Or is the Dbay plan to get their loan, at 18%pa, used as the basis to take total 100% ownership in a debt for equity swap in a couple of years time.

Clearly the £200m loss was headline news and is frightening, as is the cost of the £50m loan.

Of this £200m, £169.2m was an impairment charge reflecting current business performance and challenging trading conditions, an increased discount rate associated with higher gearing and a more prudent assessment of medium and long term forecast profitability.

Debt as always worries me, Net debt at 31 May 2019 was £158.0m (2018: £115.6m). Net debt at 30 November 2019 was approximately £215m.

I am unclear whether the increase to £215m was the result of the Dbay funding.

Although the group did report a loss excluding the exceptional costs they again talk about changes to accounting procedures.

So to an outsider like me it is almost impossible to work out if this one off and we have a healthy company albeit with a a lot of debt and in the future the accounts will look healthy again or will the next set of accounts include more exceptional costs.

Yet during these troubles revenue is up by about 6% to £421m and no big customers were lost.
Read Count: 131/10116

Buy/No Buy In A Nutshell
NegativesToo much debt a lot of which is owed to a major shareholder as the result of a bailout, COVID has hit logistics hard as they often need staff for only part of the working day.
Positives The name, the capacity and the reputation.
Initial Review Price7.98p
Last Review Price7.98p
Last Review Date17-Jul-2020
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