UK-based charter broker Air Partner has reported results for the financial year ended January 31, including details of the accounting review it undertook to resolve an error detected during its year-end close process.
The company’s gross profit for the year stood at £36.1m, up 13.8% on the previous reporting period. Underlying profit before tax amounted to £5.8m, up 23.7%.
Air Partner highlighted record results in its freight division, where gross profit more than doubled (rising by 202.4% year on year) and client numbers reached their highest level ever.
Among the factors driving this positive performance were charters across the Caribbean to support relief efforts following hurricanes Irma and Maria, as well as ongoing contracts in the Middle East.
Chief executive Mark Briffa said: “In addition to robust trading in our Charter division, we saw an encouraging performance from the Consulting & Training division, reflecting the progress we are making against our strategic objective to create a balanced business mix.”
In regard to the latter, he remarked: “Since the year end, [aviation regulations, compliance and safety management training and consultancy] Baines Simmons and [environmental and air traffic control services provider] SafeSkys have been awarded multi-year contracts by the Ministry of Defence and the Royal Air Force respectively, and the pipeline ahead is healthy across all our divisions.”
Briffa said that when he became chief executive in 2010, military contracts comprised 60% of the company’s pre-tax profits. Air Partner’s global client base has now diversified sufficiently that no single customer makes up more than 10% of its profits.
The accounting review, meanwhile, concluded that there had been a £4m overstatement of Air Partner’s net assets. Profits are to be restated across financial years 2010-11 to 2017-18, with £0.9m identified as relating to the year ended July 31 2011 and the remaining £3.5m being attributed on a straight line basis across each reporting period.
The error will cost Air Partner £0.8m in review fees and £0.5m in aborted acquisition costs – the latter pertaining to the planned purchase of a managed services business, which would have been announced in April had the accounting issue not arisen. That one-off total cost of £1.3m will be expensed in 2018-19.
Peter Saunders, the company’s chairman, said the review – which led to the resignation of Air Partner’s chief financial officer Neil Morris in April – was “an unwelcome, challenging and costly event, and certainly not how any business would wish to start a new financial year”.
However: “It is important to note that it was an accounting issue and not a business issue,” he pointed out, emphasising that no cash or assets were lost and no customer, operator or supplier was impacted or disadvantaged.
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