Aero Inventory has become the latest victim of the global financial downturn and its effect on the commercial aviation industry. The aviation procurement and inventory management software provider announced on 11-Nov-2009 that it has exhausted all avenues to secure working capital and has appointed administrators from KPMG.
Since late Oct-2009, Aero Inventory had been attempting to resolve accounting and stock reconciliation discrepancies, as well as review the accuracy of its financial reporting to its banks.
In Nov-2009 the Board appointed Colin Trupp, as acting chief executive and Swag Mukerji an interim basis with responsibility for the Group’s financial operations. It was reviewing the positions of its CEO, Finance Director and Chief Operating Officer. It also revealed the issues regarding the value of its catalogued stock were proving broader than anticipated and appeared to involve not only the accounting book value of stock but also in some instances physical quantities.
The company was in negotiations with its regarding its ability to access credit and their ongoing financial support. However, the banks stated they would not provide additional short-term funding as a result of the irregularities forcing it to halt trading.
Aero Inventory shares were suspended from trading on 26-Oct-2009.
Meanwhile, shares in flight simulator manufacturer CAE dropped 2.8% yesterday, after the company reported consolidated revenue fell 10.4% year-on-year to CAD364.5 million for the second quarter of FY2010. The company reported the civil aerospace sector remains a challenge, but still declared a net profit of CAD39.1 million (-20.2%).
The company’s outlook is for continued strong growth in its military business segment and the eventual recovery in its civil aviation segments. The company has a backlog of better than CAD3 billion.
Menzies shares rose 9.1% on the day after a positive result, largely due to its distribution business. In its aviation division, the "rate of deterioration... appears to be levelling", although cargo volumes are "significantly behind last year".
Selected Aviation suppliers’ daily share price movements (% change): 11-Nov-09
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