AIR – down nearly 20%

Aviation services company AIR (Air partner) is getting hammered again today, I see. It is down 19.8% to 83p.

As early as March, it reached a share price of over 150p. The big drop is attributable to the year-end update issued on 3 April:

The Board of Air Partner has identified, during the course of its year-end review process, an issue predominantly relating to its accounting for receivables and deferred income. …

They quantify the amounts involved:

the Board presently understands that the cumulative amount … is approximately £3.3 million

The shares, obviously, dropped when the announcement was made, with a further fall today.

AIR is of particular interest to me, because it is a share that I have never owned, and in fact stood on the sidelines enviously as others made a packet out of this company.

Paul Scott commented about the over on Stockopedia on 3 April:

This seems to be saying that bad debts … were not written off through the P&L. Instead they were offset against a balance sheet creditor

He wavered in his opinion, but said:

Overall, my feeling is that share price drop of around 20% today looks about right. It’s very concerning that the company appears to be admitting today to having falsely accounted for bad debts, and hence boosted cumulative reported profits by £3.3m. … Based on today’s announcement, I don’t see any reason to panic.

It seems that news was expected today to update the market, although I do not see any official mention of it. So maybe that’s just speculation. Given that the time is now 4:17pm, all I can say that if there is news issued today, it will likely be atrocious.

Answers on a postcard.

I note that the company’s P/FCF is 8.5, and that it reports net cash. I am not a holder.

83p

Advertisements

About mcturra2000

Computer programmer living in Scotland.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s