Aero Inventory Share Discussion Threads

[hvs] 02/11/2009 14:31

lol !!!!

A bit late aint it ???

[this_is_me] 02/11/2009 14:30

Another reason for buying on re-admission is that the Investors Chronic has a sell tip on them!

[hvs] 02/11/2009 12:13

lol !!!!!

I has a fan club now.

Pity we have so many mismanagers around with bankers in tow.

Why suspend the share price and then say its all HUNKY DORY. ? Why ?

[this_is_me] 02/11/2009 11:53

hvs spends his time on various threads saying the company concerned is going bust; ignore or filter him/her.

There may be a lot of money to be made here if the company survives as the share price will tank even if the situation proves not to be nearly as bad as it could be.

[jr hartley] 02/11/2009 11:51

dawsonpaul - what we need here is facts and clear thinking not mindless speculation. Time will tell how credible your source is but it would be helpful if you could indicate what type of role your mate occupies within AI.

"No-one knows where all the parts are, so when a request comes from a client, all they do is buy the part new from Airbus/Boeing and send it on." !!!!!!

[hvs] 02/11/2009 11:07

lol !!!!

lol !!!!

So the bankers will definitely be controlling the purse strings - and they have got Lewin/Bevan by the balls and are squeezing hard.

Its SHAREHOLDERS not these two BOZO's who cannot do a proper stock check.

Last two years profits will have to be re-stated. Does that mean they did not make a profit ?

[daihardtoo] 02/11/2009 10:46

If they are turning over US$ 40M per month (that is the run-rate indicated by their interim report), then that would be the average monthly inflow from their debtors.
Cashflow would be extremely bad if they cannot find $2.5M to cover the most crucial of all payments (ie. salaries)

In a highly geared business such as this, it is extremely inefficient to keep substantial cash balances (& you are right, the cash balance at last year-end was $1.4M) - and it is normally a condition of such asset-backed finance that debtor receipts are paid into accounts specified by the lenders.
So the bankers will definitely be controlling the purse strings - and they have got Lewin/Bevan by the balls and are squeezing hard.

My guess is that there will be some bankers who will be taking pleasure in this as payback for the directors steam-rollering through their share option scheme.

[martinc] 02/11/2009 10:32

My recollections of the last accounts was that they only had a million or so of actual cash - so if banks get sniffy about even small amounts of lending, then covering a particular month's 2.5m wages could be potentially tricky if cashflow is a bit poor that month..

[daihardtoo] 02/11/2009 08:48

MDJ8 - Possibly an 'honest error', but astounding imcompetence on the part of the Directors and Auditors.

From reading yesterday's article, my guess is that they screwed up when valuing the ACTS inventory when the contract was signed. In particular, they failed to reconcile the movement in inventory between the day they received the first stock list and the day they signed the contract.

Make no mistake about the magnitude of the error, and the culpability of the Directors - they mad a payment of $95M to ACTS.
The payment instruction to the bank will have required a minimum of two signatures, and when authorising a payment of that size the signatories should have fully satified themselves that all calculations etc were correct. It appears that they failed to do that which either amounts to Gross Incompetence or Gross Negligence.

Their policy for valuing stock upon purchase is not excessively complex - a couple of paragraphs in their annual report explains it clearly. For these bozos, who pay themselves in excess of £500k p.a. each to fail to make sure that it is done correctly is shocking.

I can understand this, why can't they?

"Where the Group purchases bulk stock at the commencement of a new contract, the price paid is determined based on physical inventory extant at a date which is typically several months before contract signing date. This allows the Group to evaluate the material in advance of purchase. The cost of the bulk purchase is allocated across all lines based on selling price. The consumption of any of this inventory by the customer in advance of contract signing is billed to the customer at contract prices. The billings of pre-contract consumption are not
recognised as revenue, as the Group does not bear the risks and rewards of the inventory until contract signing, but result in a margin accruing to the Group. This margin is deducted from the cost of inventory at signing date on a line by line basis. Similarly any purchases of inventory by the customer after the bulk stock is determined are paid for by the Group and recorded at cost on a line by line basis. Where, on a line by line basis, accrued margin on consumption exceeds cost to the Group the resulting credit is recorded as a reduction in cost of revenue over an appropriate period."

[ir35] 02/11/2009 08:48

Anyone contacted the company? I mailed Rupert Lewin requesting more information (via an RNS) but so far no response. They should know the potential size of the problem that they have seen so could at least let the rest of us know how bad things might be. At the moment we have no idea how much stock the problem relates to and it cant be too hard to let us know that - but then we are only shareholders :).

[dawsonpaul] 02/11/2009 08:46

I've heard from a mate who works there and it's all gone Pete Tong. People packing their boxes at work etc. They were sacking people in the Canadian IT dept a couple of months ago.

We were speculating that they FTSE thing may be a sign to a merger but we were wrong. It was simply a delay tactic. The UK staff last pay cheque was delayed and came from Aero in Hong Kong - the only place they could source cash from.

Their parts "inventory" is a complete mess. No-one knows where all the parts are, so when a request comes from a client, all they do is buy the part new from Airbus/Boeing and send it on. It basically boils down to a complete lack of "Inventory" believe it or not.

If/when this starts to trade, expect it back under 150p, but I doubt it's coming back. Sorry.

[dibbs] 01/11/2009 22:32

As a holder of AI. I'm in the dark as is everyone else. Impossible to know how it will pan out.
Sad, but par for the course in these kind of cases to see all I told you so merchants and other nutters coming to the fore. You know who you are;-)

Dibbs

[stallone10] 01/11/2009 22:06

hello 5 or 6 years ago i said that aero's financial model was bust.
It borrowed money from you via placings and then used it to buy stock with showed turnover was being financed by shareholders.
Take a look at my posting from that time i was right.

[mdj8] 01/11/2009 20:10

To me,this seems like an honest error/oversight. At least Ernst and Young are researching into the problem, so at some point it will be quantified. Worst case I suppose is that the whole ACTS deal was a screw up which says max downside is $100- mill US in "lost" stock. The company is still viable even with such a scenario, so my expectation is that the share price will take a big hit, but that AI. will continue trading and hopefully with a few more contracts we will have a healthy share-price again.

The key is that I see no reason for companies not to do business with Aero in the future - this is an internal prob, it's not linked to their performance in fulfilling their contractual obligations for their clients.

The other thing is where is the stock? It could be an accounting error or that it wasn't delivered by ACTS - we dont know.

Anyway, fingers crossed.

[hvs] 01/11/2009 13:13

NOT LIKELY.

Mismanagers very cagey and the STATEMENTS they have issued says it all.

Looks like the JUNK collectors will make HAY.

[redips2] 01/11/2009 12:51

lets just wait and see what if anything can be salvaged from this mess

[hvs] 01/11/2009 12:02

lol !!!!!

And the Board was on £ 500,000 per year PLUS EXPENSES off course.

Being an INTERNATIONAL BUSINESS. Must have been First CLASS all the way.

Its all About OTHER PEOPLES MONEY. And keep raising it. Six time The Times
says.

Anyone for JUNK ?????

[typo56] 01/11/2009 11:52

lol, "A warehouse in Winnipeg, Canada, was emptier than expected."

[hvs] 01/11/2009 10:47

Its THE BOARD that should be SIDE-LINED.

And AUDITORS SUED.

[qs9] 01/11/2009 10:33

Article says auditors have been sidelined, E&Y doing review. Heads will also roll if you believe the article...

[hvs] 01/11/2009 10:27

lol !!!!!

lol !!!!

TDay - 30 Oct'09 - 10:47 - 1737 of 1743


I am still staggered how supposedly intelligent guys (let's not forget earning in excess of £500,000 a year),

Intelligent ? Are you serious ? Lewin (does the surname mean anything ? ) Secondly he is an anal yst . How they got away with it for so many years says it all. Another CITY con. As for their MEGA salaries thats reward for raising
MONEY and paying THE CITY mega fees.

Raising MONEY fro buying JUNK. Who valued the STOCK ???

Now the the last two years accounts will have to be re-stated . Where were
the auditors ? They should be SUED.

[qs9] 01/11/2009 10:08

Interesting article in the Times today. Black hole headline, but if you read the detail, some of the shareholders do not seem that worried. Worth a read, but am holding out some hope having read the shareholders comments.

cheers