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Williams: Alpha well placed to start afreshWilliams: Alpha well placed to start afresh
John Rimmer
6-Jul-2006
The new CEO and acting chairman of Alpha Airports Group tells RavenFox.com the company is "reasonably placed" for growth and blames legal advice for the Excel Airways crisis
As Alpha Airports Group emerges from the crisis that led to the suspension of its shares and the resignation of its top management, the company's CEO Peter Williams has blamed "erroneous" legal advice for an episode likely to cost the group £3m ($5.5m). As a result of concern over a catering deal signed last year with an airline customer—now known to be Excel Airways—Alpha's auditor PricewaterhouseCoopers withdrew its approval of the company's preliminary 2005/6 results, but Alpha today announced the confirmation of the results with no adjustment along with the relisting of the group's shares.RavenFox.com understands that Alpha helped Excel create invoices that shifted costs settled last summer to a later period. Alpha was aware that Excel's parent company Avion Group was to publish its accounts ahead of an initial public offering, and the shifting of costs to the autumn effectively flattered its accounts, thus potentially misleading investors.
Williams told RavenFox.com that Alpha had relied on legal advice suggesting it would not be liable for the manipulation of Excel's accounts. "Alpha was heavily reliant on legal advice that was completely erroneous," he said. "There was nobody within the company to second-guess that advice. Since then [legal firm] Ashurst has made a thorough investigation that has led to the relisting of our shares. We're now taking steps to ensure that this can't happen again."
Williams said that Alpha was seeking to employ an in-house lawyer and to strengthen its internal audit function. He stressed that the crisis had had no effect on cashflow and profits, but confirmed that legal and other costs arising from the episode, plus compensation paid to departing staff, would amount to about £3m.
Earlier in the year Alpha announced that its future strategy would be centred on two plans, which the group has named Plan for Profit, focused on maximising its UK and Ireland business, and Plan for Growth, based on organic growth and acquisitions. Williams confirmed that the group's drive to improve profitability in the UK and Ireland market remained central to its strategy, and said that Alpha's division of its airline and airport operations into separate business units would be upheld. "The airline and airport businesses are very different," he argued. "The tax-free operation is an out-and-out retail business, but the airline catering operation follows a business-to-business model and involves very different processes. Some might argue that having our feet in two different camps is a weakness, but I see it as a strength in that although both are part of the aviation industry, we are not solely dependent on consumer confidence in the retail market. Everyone is always going to have to eat on board planes."
Williams paid tribute to Alpha's ground store business, where Manchester and Birmingham airports are among its flagship operations. "Alpha does the tax- and duty-free business very well. I'll be keen to see that expand. Obviously we don't have a way in to the BAA airports at the moment, but that could change over coming years. Alpha will be bidding for new contracts, that's for sure." He described the current trading environment at Alpha's airports as "reasonable", adding that the company was "reasonably placed" for growth in the sector.
Alpha's inflight retail business, meanwhile, is now overseen by the company's UK Flight Services division, run by its managing director Ken Adamson. Former managing director of Alpha Inflight Retail Paul Possamai has left the company.
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(15-Jul-2006) - UK. Alpha Airports Group CEO Peter Williams has insisted that the company has "a bright future" as it emerges from the turmoil that led to the departure of predecessor Kevin Abbott and finance director Heather McRae and caused trading in the company's shares to be suspended
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