Accounts reveal £550m impact of pandemic on Luton council's airport company
Most of that debt has very little to do with Covid, as LRT stopped paying a dividend to the council and still doesn’t, and has everything to do with its £360m out of control loans to build the Dart and the £261m write off of unrecoverable Dart debts and a further £71m loan to fund the DCO.
Regarding the DCO, despite spending £71m, LRT has very little faith in its own application, so is not convinced by its own arguments, and has now resorted to a petition as a sign of desperation.
We expect to secure a revised concessionaire agreement or alternative value added financial arrangement by 2032/33 to extend the resilience and expertise developed during the current concession tenure,” explained the report by Mark Turner, the company secretary and director, and LBC monitoring officer.
This is just double talk to mean there will be no competitive tendering process and that LRT will be taken to the cleaners with a lower concession fee per passenger than now, as the operator has them over a barrel. This is an indication of historic weak and feeble management and a board of directors made up of housewives and shopkeepers who know little about nothing when it comes to airports.
I note that one of the councillor “housewives” has now been replaced as the Chair of LRT with someone brought in who should know what he is doing but is it too little too late?
A qualified auditor’s opinion was issued for a third successive year around the £1.16bn airport valuation, despite this being £320m lower than a £1.5bn valuation in March 2021. Auditor Azets Audit Services would support a further write down of £150m reducing this to about £1bn.
This is a big deal. Companies don’t like qualified accounts, as it looks bad and this is another one under new auditors. It shows that LRT has put a fake value on its own airport to reduce the debt to value ratio. In other words
the auditor has expressed reservations about whether they represent a true and fair view of the company’s financial condition.