Air Partner updates on accounting review

11 / 04 / 2018

UK charter broker Air Partner has restated the financial impact from an accounting error in its receivables and deferred income since the 2010/11 financial year, originally estimated at £3.3m, saying today that it “will not exceed £4m”.

The Air Partner Board has appointed PricewaterhouseCoopers(PwC) and Rosenblatt Solicitors  to provide independent accounting and legal support as part of a review. 

In a London Stock Exchange announcement today, Air Partner said that PwC and Rosenblatt have “full, unencumbered access to staff, records and systems to enable them to conclude the review as swiftly as possible”.

Air Partner added: “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.”

Financial analyst Robin Byde, of Cantor Fitzgerald Europe, said: "This update should provide investors with some comfort that the matter appears contained." Air Partner shares rose over 10% following the stock exchange announcement. 

On April 3, Air Partner 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 company results.

On the advice of its advisers re the work involved, Air Partner has rescheduled the announcement of its full year results for year ended 31 January 2018 from April 26 to May 31.

After appropriate restatements, the Air Partner board expects that the company will have sufficient distributable reserves to pay dividends.

The statement added: “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 31 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.  

The group “currently maintains a strong balance sheet” with over £8.6m of its own cash at the end of March 2018. 

Air Partner added: “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.” 

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.”