Monarch reassures over auditor’s risk assessment

Monarch reassures over auditor’s risk assessment

Monarch Group has rebutted suggestions its future remains uncertain following publication of its first annual report following last year’s buyout by Greybull Capital.

The group’s financial report included a forward-looking ‘emphasis of matter’ statement from its auditors which highlighted potential risks which continue to face the firm.

However, the company said a truer picture of its prospects and how it was currently trading was given in an update last month.

Then Monarch said its turnaround programme was on track to deliver profits this year and it had cut winter losses further than previously forecast.

Andrew Swaffield, Monarch chief executive, said in a statement yesterday it was important to put the cautionary note from the firm’s auditors in its accounts filing into context.

He said: “It relates to a filing of formal accounts that we made for the period before our successful refinancing and change of ownership last October.

“Since then we have moved forward enormously as a business and, as we set out in our update earlier this month, we are trading strongly, our finances are sound and we are on course to return to profit this year.”

In June Monarch reported it had cut traditional half-year winter losses by a bigger than forecast £40 million.

Losses in the six months to April were down to £69.9 million from £110.6 million in the same period a year earlier.

A total of £30 million of the reduction was attributed to its “self-help” turn around initiative, with the remaining £10 million coming from additional savings in fuel costs.

This came as the group completed the final phase of a restructuring started last year, including a 4% capacity cut over the winter to 2.5 million seats.

In Monarch’s annual results to October 31 2014 Swaffield said “the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future…”

A source close the Monarch said given the deal to save the company was completed only last year it was not surprising to find a note of caution in the firm’s annual accounts.


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