Sutton Harbour completes airline sale

1st Dec 2010 23:17

Property developer and port operator Sutton Harbour Holdings has completed the sale of its airline Air Southwest for a total loss of £7.3m. Eastern International Airlines is paying £1.5m for the airline but there will be an adjustment for unflown ticket revenues and working capital of £2.8m. That means that there will be a cash outflow of £1.3m. The rest of the £7.3m loss will come from write-offs. This figure does not include trading losses in the six months to September 2010. Air Southwest was started in 2003 but in the past couple of years it has struggled. Sutton had net assets of £43.1m at the end of March 2010 and that figure is likely to fall to below £36m plus any retained earnings in the past six months. At 40p a share, up 3p on the day, Sutton Harbour is valued at £25.18m. That means that there is still a significant discount to net assets. Sutton will announce its interims on 15 December.