Air Partner: Further update on accounting review
On 3rd April 2018, the Company announced that, as part of its year-end close process, it had identified an issue relating to its accounting for receivables and deferred income in previous Air Partner results. Air Partner is committed to ensuring this matter is resolved in a transparent, thorough and exhaustive manner and accordingly, the Company provides the following update.
The Board appointed PricewaterhouseCoopers LLP (‘PwC’) and Rosenblatt Solicitors (‘Rosenblatt’) to provide independent accounting and legal support as part of the review into this matter. PwC and Rosenblatt have full, unencumbered access to staff, records and systems to enable them to conclude the review as swiftly as possible.
Our review has made good progress, and is ongoing. At this stage, we believe that the total cumulative impact arising between the financial years ended 31 July 2011 and 31 January 2018 will not exceed £4m. The final amount will be confirmed to the market after completion of the review. In accordance with accounting practice, amounts relating to prior periods will be recorded as restatements of comparative financial information.
Any amount attributable to any period will be treated as a non-cash item.
Impact on Year End 31 January 2018
- On the advice of its advisers, considering the work required to restate appropriate historic accounts and complete the full year audit, the Company believes it prudent to reschedule the announcement of its full year results for year ended 31 January 2018 from 26th April 2018 to 31 May 2018.
- After appropriate restatements, the Board expects that the Company will have sufficient distributable reserves to pay dividends.
- The Board believes that no shareholder should be further disadvantaged by the impact of this matter. Subject to completion of the year end audit, the Board intends to recommend that the final dividend payable for the year ended 31st January 2018 will be 3.8 pence per share. The Board further wishes to take this opportunity to reaffirm its ongoing commitment to its dividend policy, which targets cover of between 1.5 and 2.0 times underlying earnings per share.
- On 6th February 2018, the company announced, “underlying pre-tax profit for the financial year ended 31 January 2018 is expected to be not less than £6.4m”. Prior to adjustment for any expense attributable to the period arising from this matter, this statement remains valid.
- The Group currently maintains a strong balance sheet with over £8.6m of its own cash at the end of March 2018.
- At no point has a customer, operator or supplier been adversely impacted or disadvantaged.
- The Air Partner finance team identified this matter as part of the year-end closing process and following the proper procedure, escalated it to the Executive team who notified the Board.
- Between the period financial year ended 31 July 2011 and financial year ended 31 January 2017, taking into account expected adjustments, the Company had sufficient distributable reserves in each year to enable it to pay dividends legally. Over this period, the company returned over £14.2m in cash to shareholders through interim and full year dividend payments, with an additional £0.9m paid as an interim dividend in October 2017 for the year ended 31 January 2018.
- Any one off costs and fees associated with the review will be expensed in the financial year ended 31st January 2019 and clearly identified as such.
- Whilst our review is ongoing, we will not comment on rumour or speculation, and shareholders should expect official statements to be issued to recognised Regulatory Information Service providers as appropriate, ensuring full compliance with regulatory obligations.
Peter Saunders, Non-Executive Chairman of Air Partner Plc said:
“Once this issue was identified, we immediately launched a review and engaged independent advisers to assist and support the process. Our review will be transparent, thorough and exhaustive and we will allocate as much time and resources as is appropriate to reach a satisfactory conclusion.
“I am pleased to report that colleagues across the Group’s UK and international offices have remained resolutely focused on normal customer service while the Board undertakes this review, and I thank them for their commitment and loyalty.
“I am also aware of the patience and support many shareholders have extended to the Company while we review and address this matter. The Board would like to reassure shareholders that we are focused on serving their best interests, meeting the Group’s regulatory obligations, and returning to the Company’s normal business agenda as soon as possible.”