UK 06:54 Wednesday, 21 October 2026
Breaking news and expert analysis on fast-moving AIM and LSE listed shares
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
In its most recent profits warning Fastjet (FJET) used language deliberately designed to hide how close it is to trading while insolvent and how inevitable a bailout placing is. Its PR firm Citigate Dewe Rogerson then engaged in disgusting fascist bulling and smearing to distract attention from this pressing issue. But the truth will out and, indeed, here it is.
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Comments
Marvin
Prefer ‘geniuses’ even if it’s wrong. Nice going Tom.
You just need to let play out now.
phil
Trading high stack fixed costs against deflation is difficut enough in rich developed countries, in Africa it is impossible.
African infrastructure is failing, Africa is failing, 9million people each year are losing access to clean fresh drinking water, and circa 1% of Africa’s populations are losing access to a reliable eletrical supply each year.
Of all the things Africa needs it would not be a another two bit airline in a continent where every two bit country already has a two bit ailine, and almost all of them lose money.
Fastjet will go to 0p as will Avanti, you were warned
Duck and Dive
Maybe you should have asked him what he meant by “gross debt“… I do hope you have quoted his response in full.
In any event, much of your conclusion is again based on your supposition, not on facts. And your conclusion is inconsistent with the clear statement by the company in its RNS a week ago (7 March) that it had sufficient funds to meet its operational needs:
“The Board monitors the Company’s cash position very carefully and with over $20m of cash available at the end of February 2016, and based on current forecasts, it has sufficient funds to meet its operational requirements.”
I find it inconceivable that the company would attempt to mislead the market and its sophisticated investors so blatantly and so close to an EGM. Therefore, you must be wrong.
Perhaps the answer lies in the nuancing of the company’s current liabilities and especially their aircraft leasing costs. In any event, all will become clear very soon.
Drunken Sailor
A few points:
It is unlikely the FJET accounts will be qualified – you need a really major screw up like QPP to get qualification. The matter of going concern will be emphasised – there is a significant difference between qualification and emphasis of matter.
“it is inconceivable that Fastjet will have been hurrying to pay its bills faster” Highly unlikely I agree, but not inconceivable. FJET spunked a lot of cash in the second half and some of that could have been closing the gap between receivables and payables. The real point is we are made to guess because the company refuses to release the real figures that matter and tried to mislead with the ambiguous term cash available. I think your guess is pretty close to reality, if it was not the company would have been much more inclined to say what the real figures are. They still could, they have not yet met their obligation under AIM rule 10:
“An AIM company must take reasonable care to ensure that any information it notifies is not
misleading, false or deceptive and does not OMIT anything likely to affect the import of such
information.”
The other way of sorting out net current assets is to put a non current tangible asset up for sale and thereby bring it down into current assets. Some people believe that $15m could be raised this way, ie by flogging the aircraft they bought and have not really used because there is no demand. I think $15m is highly optimistic, given the circumstances, and if you are right about the current state of net current assets would not be enough to solve the problem, even with the highly optimistic projection that in 10 months they will only burn about $14m when in 2 months they have burned $8m. There would still be far too much material uncertainty for the matter of going concern not to be emphasised.
Thus a placing ahead of results is what is needed and having the net current assets position in the public domain would be rather inconvenient so fuck AIM rules as we look to screw our shareholders yet again with even more dilution.
Liberum clearly do not give a shit and are looking forward to their cut of the commission on the placing.
Tom Winnifrith
D&D
You are now officially pathetic. Not misquoting Mr Edmond at all. And gross debt will be money owed to banks, clearly not trade payables. Just admit it you are WRONG
T
wildrides
The statement from Fastjet is quite clear :-
“The Board monitors the Company’s cash position very carefully and with over $20m of cash available at the end of February 2016, and based on current forecasts, it has sufficient funds to meet its operational requirements. The Board may consider raising further funds during the year to provide additional headroom and ensure the Company has the necessary resources to fund future growth as market conditions improve.”
It thus has said it will raise funds should it need to, so you are arguing about nothing . Whinning Froth is making headlines out of plain and clear statements for the sake of it again and grossly insulting his individual readers for the sake of “soap opera” drama to get more reader traffic . Duck is clearly invested and hopes Fast Jet will do well ( as I do for the sake of Africa ) . However , there is no way this is going to ZERO . Stelly will never let that happen . So its up to readers to pick their entry according to where they think the “bottom” is if planning to invest . No doubt Whinnys shorting mates will be short ………..at some point there will be a squeeze and I intend to be in there like a ferret up a drain pipe .
Gwandad
CDR believes ‘it is acknowledged as being at the forefront of innovative, strategic thinking.’
Well, possibly it should take on board a basic paraphrased message from Michael Corleone in The Godfather and:
….‘keep its friends close but its enemies closer.’
Basics of PR, failed. Should do better.
I’m sure TW didn’t start off as an enemy but then enter, still wet behind the ears CDR bully boy to enhance the relationship between client and public – not.
Duck and Dive
@DS – Fastjet bought their A319 in Q3 2015 when market values were at their lowest for the year (albeit higher than 2014). According to the references I have read, the market value has probably increased by 1-2% since then as airlines – and especially big A319 family users – have prospered and the A319 continues to be the favoured short/medium haul conveyance for LCCs. So if Fastjet do put it up for sale – and it won’t be a fire sale – they could easily get back what they paid for it. In fact, I think it is only 10 years old in which case they might get a fair bit more than they paid judging by some of the asking prices here: http://www.controller.com/listings/aircraft/for-sale/list/category/3/jet-aircraft?Manu=AIRBUS&MDLGrp=A320. And in any event, the Airbus 319 family always depreciates less than the Boeing equivalents.
As for burn rate, the next six months see the peak traffic periods of Easter and summer holidays so the rate will definitely reduce and could be close to zero for some months (and benefiting further from the cost-cutting moves afoot).
@Gwandad – shareholders in any company should be pleased when their investments come under scrutiny by third parties – even when facts are sacrificed for cheap headlines. Fastjet PIs – most of whom are obviously not day traders – will have welcomed Stelios’ activism and I have been encouraging Tom to dig deeper for months, in the full knowledge that he would take every superficial opportunity to scaremonger. Thanks to Stelios, the facts will soon be known and they will have to be consistent with the statements made in last week’s RNS.
Gwandad
@D&D – My comments are not about Fastjet, their financial position or the accuracy or not of their recent RNS’s but solely to do with the lack of professionalism apparently demonstrated by Citigate Dewe Rogerson.
The role of a PR company is as CDR’s own web-site states – to help any company, or organisation, communicate to best effect with all its different financial audiences. Journalists and analysts are a target audience and to act and respond as they apparently did was amateurish in the extreme. They would have acted far better for their client in this case had they ignored any unbelievable offence taken at the use of words like bimbo or the like, not been so ridiculous about matters of racism to do with Greeks and not, provoked or not, lowered themselves and allowed themselves to start swearing at a journalist. Do I believe that TW just might have been a little arrogant and abrasive on the call to CDR? Sure I do but having dealt with many journalist in the past I’d say that that’s par for the course and a professional PR organisation should have risen above issues of personal relationship and trivial irritations and service the needs of a member of a key audience for their client.
Had Fastjet had a different PR company the negative side would of course have been that we would not have had such interesting theatre over the past three days and this negative thread would have been dead and buried by now.
Duck and Dive
@Gwandad – There appeared to be nothing wrong with the way the PR agency responded to Tom’s questions – given that it was obviously the wrong time to answer them. But in throwing his dummy out of the pram, Tom definitely abused the PR lady and arguably libelled her so the agency was within its rights to take whatever steps it felt were appropriate to protect its employees. It was essentially a storm created by Tom for his own benefit (cheap headlines) – and how he has the nerve to complain about the resulting collateral damage is beyond me. There isn’t even any evidence that the lawyers were acting on Fastjet’s tab.
Tom – and you – may fondly imagine that a PR practitioner’s job is to answer every question. But that isn’t the case – and especially not in the world of City PR where regulators dictate when some questions can’t be answered.
I did offer Tom the direct email address of some Fastjet big shots but he didn’t ask for them – presumably because he was more than happy with his petulant story from the fringes and scaremongering headlines based on little more than his wishful assumptions.
But i can assure that had CDR been any other PR agency, Tom would have been given the same answers to his questions. Whether or not they would have elected to go the extra mile to protect their employees from abuse is neither here nor there. It was presumably a matter of principle for CDR – and that might make them a better outfit to work for than most.
PS. I imagine that burying this thread is very low down the priority list for Fastjet or its PR agency. And it’s obviously not high on mine.
Duck and Dive
So, Ed Winder and Ms Bates depart and the EGM is abandoned – presumably with Stelios appeased. No further detail on the cash position so Fastjet standing by their March 7 RNS wherein they said they didn’t need to raise any new cash. The, now, executive chairman is a fine, upstanding fellow so no chance of any monkey business.
But it looks like we’ll have to wait for the numbers.
Drunken Sailor
D & D they would be a forced seller anyone in the business can see that. Keep waiting for the figures, in the meantime a mega diluting placing will be done. Having done that then may be they would not be a forced seller for a while until they run out of cash again. They probably do need both a mega diluting placing and the aircraft sale to keep them going whilst some decent management, if any can be found to take on the job, radically restructure the business.