Alpha confirms financials following audit

Shares of Alpha Airports Group Plc. were trading the morning of July 6, following the company’s announcement that its preliminary financial results for the year ending January 31 had been audited and reconfirmed with no changes or adjustments.

The investigation by a special committee resulted from a discrepancy in a catering contract signed last year that eventually led to the resignation of the company’s chief executive Kevin Abbott and financial director Heather McRae this spring. With the investigation completed, Alpha declared a before tax profit for the year of £18.5 million (US$34 million) and recommended that the board approve a dividend of 3.2 pence per share.

The results of the audit were welcome news for the company’s new CEO Peter Williams. He tells PAX International that Alpha is appointing an attorney to oversee all inhouse contracts and increasing the size of the department in charge of internal audit functions and “very much wants to put this distraction behind us and get on with business as normal.”

In the year remaining, Williams said that the company will be looking particularly at its United Kingdom and Ireland retail and catering operations, which bring in the bulk of its revenue, but have lagged behind the profits turned on its international operations.

PriceWaterhouseCoopers (PWC) withdrew its approval of last year’s preliminary results and share trading was suspended in late April. Alpha says that the problems arouse as a result of a contract signed in 2005. Though not named in official releases from the caterer or in the report, Icelandic charter carrier Excel Airways has been widely mentioned as the customer for the £7.5 million (US$14.1 million) multi-year pact.

“By entering into October 2005 commercial arrangements, the group consciously assisted that customer to put itself in a position in which it might have been able to manipulate its own financial statements in circumstances in which the customer’s parent company was preparing for an initial public offering,” said the conclusion of the review committee.

But after reviewing the matter the investigation concluded the contract “did not affect the results for the year in terms of profit or cash and there is no suggestion that they gave rise to any indirect advantage either financial or otherwise for any member of staff or the board,” said the chairman’s statement in the group’s financial report. The statement continues, “However, they fall short of the levels of corporate governance that a public company should adhere to and the Board is determined to deal properly with that issue.”

Following the announcement, Alpha said that Graham Frost would be stepping down as chairman of the company, with Williams taking the spot until a new chairman could be found.

A feature story on Alpha’s plans will be in the July/August issue of PAX International, out soon.