Fastjet, the
low-cost African airline backed by Sir Stelios Haji-Ioannou, has had its
accounts qualified by auditors amid concerns it does not have the funds to
continue trading as a going concern.
KPMG
said there was “significant doubt” the AIM-listed company, in which the easyJet
founder owns a 3.95pc stake, could continue to trade.
The qualification was the result of sizeable losses and write-downs for the 18 months to December 2012.
The qualification was the result of sizeable losses and write-downs for the 18 months to December 2012.
The
group made a loss after tax of $56m (£37m) in the period, and saw an operating
cash outflow of $19.9m. The auditor said these figures and the fact that its
prospects depend on improved trading and extra funding were all reasons for the
qualification.
Shares
in fastjet, which had fallen by more than 70pc from the start of the year to
close at 1.26p on Friday, are likely to fall further on Monday.
The
accounts were published almost two hours after the market closed in London on
Friday. Besides Sir Stelios, other investors include Lonhro, which owns a
49.14pc, and Henderson Global Investors, which has a 6.47pc stake.
fastjet’s
consolidated accounts show a loss before tax of $55m, including $23.5m of
write-downs of goodwill and other matters. The bulk of those other matters
related to the takeover of Nairobi-based Five Forty Aviation.
But
the accounts do reiterate fastjet’s recent £15.7m of funding raised from US
asset manager Bergen, noting that at the end of April 2013, £13.1m had not been
drawn down. In addition, the airline has raised £8m through share placing since
the period covered in the accounts.
Sources
close to fastjet pointed out that the loss had been flagged in a trading update
in March.
The
sources also said that, while Fly540 operations had not performed to
expectations, the board, led by executive chairman David Lenigas, was taking
action to improve its performance.
A
fastjet spokesman said: “The ability to stimulate and grow the market using the
low-cost airline model has proven to work.” He added that fastjet was the
second most “liked” African airline on Facebook and the airline was expanding
to South Africa.
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