Final Results for the year ended 31 December 2014

RNS Number : 8719O

Fastjet PLC

02 June 2015

 

fastjet Plc

("fastjet" or the "Company")

(AIM: FJET)

2 June 2015

fastjet, the low-cost African airline, announces its results for the year to 31 December 2014

Summary highlights

·      Significant improvement in operational and financial KPIs

·      Material corporate structure changes and improvements

·      35% first time fliers on fastjet in 2014 - African growth potential evident

·      95% customer satisfaction level

Operational highlights

2014

·      fastjet Tanzania

o  85% increase in aircraft utilisation (from 5.5 to 10.2 block hours per aircraft per day)

o  62% increase in total seats flown

o  92% punctuality - SAA 84%  easyJet 85% (average arrival within 15 minutes)

o  Additional ancillary revenue streams introduced (including seat selection, 'Smartclass', and 'Freighty').

·      Fastjet Zambia

o  Zambia Air Service Permit granted - this is a significant step on the path to gaining an Air Operator Certificate and launching flights within and from Zambia.  First aircraft expected to be deployed in Q3 2015.

·      Fly 540

o  Loss-making services of Fly 540 businesses in Ghana and Angola remain suspended, now treated as discontinued - minimal cash cost in the year.

o  Disposal of investment in Fly540 Kenya - legal and financial indemnity received.

Subsequently

·      Zimbabwe Air Service Permit granted marking a significant step on the path to gaining an Air Operator Certificate and launching flights within and from Zimbabwe. First aircraft targeted to be deployed in Q3 2015. 

·      Fourth aircraft lease - a letter of intent (LOI) signed for the lease of an Airbus A319 as part of planned fleet expansion.

2014

·      fastjet Tanzania

o  106% increase in full year revenues to US$53.8 million ( 2013 US$26m) 

o  26% increase in average revenue per passenger to US$90 (2013 US$71)

o  64% increase in passengers carried

o  3% increase in Revenue per Available Seat Kilometer (RASK) to 7.95c (2013 7.72c)

o  20% fall in Cost per Available Seat Kilometer (CASK)to 11.27c (2013 14.13c)

o  Full year underlying operating loss before exceptional items of US$22.5 million

o  Full year underlying operating loss after exceptional items of US$24.4 million - US$1.9 impairment on intangible items

o  50% reduction in year on year EBITDA loss margin.

·      fastjet Group

o  Operating loss before exceptionals US$30.7 million

o  Operating loss after exceptionals US$43.9 million - impairments of US$10.7m intangibles and termination of  easygroup management contract of US$2.5m

o  Loss including discontinued businesses US$72 million - loss from Fly 540 Angola and Ghana US$27.7 with less than US$0.25 million of fastjet Plc cash used in these legacy operations.

Subsequently

·      £50 million equity fund raise, significantly broadening the institutional shareholder base.

·      Share capital reorganisation - consolidation of ordinary shares on the basis of one new share of £1 each for every 100 shares of 1p each.

Restatement

·      Restatement of 2013 financial statements in relation to the 2012 purchase of the Lonrho aviation business. The transaction was treated as an acquisition by Rubicon (now fastjet Plc) whereas it is more correctly treated as a reverse acquisition by Lonrho, as whilst the Lonrho board in practice did not, it could have sought control of the Company. The restatement has neither any cash effect on any of the years concerned nor any material impact on the 2014 trading results.

Outlook 

·      Significant growth in fastjet year-on-year passenger numbers expected to continue, with the level of passenger numbers achieved reinforcing fastjet's stronghold in the Tanzanian market, and the attractiveness of both the low-cost fare structure and operational reputation. 

·      Growth for 2015 expected to come both from the Tanzanian operation and from the addition of new fastjet airlines in Zambia and Zimbabwe.

·      Current fleet is now nearly fully utilised - extra capacity is required with a fourth aircraft due to join the fleet in Q3. The aircraft in question will be the first of a number of aircraft that fastjet is planning to add to the fleet this year, with each additional aircraft able to make up to 1,000 more seats per day available to customers. Based upon the 75% load factors currently projected, each aircraft in the fleet is expected to carry approximately 275,000 passengers per annum.

·      Negotiations on further aircraft underway with target to build a fleet of up to 34 aircraft operating to 40 destinations within and from Tanzania, Zambia, Zimbabwe, South Africa, Kenya and Uganda by the end of 2018.

Ed Winter, fastjet Chief Executive Officer, said: "2014 has seen a significant increase in the number of passengers travelling on our core Tanzanian routes, with revenue more than doubling. Aircraft utilisation grew sharply and average revenue per passenger also climbed with our services such as seat selection proving increasingly popular with customers.

"Strong underlying traffic growth during the year continues to demonstrate that fastjet's low-cost airline model works in the African market. This growth in traffic underpins our belief that people across Africa are increasingly embracing the travel opportunities offered by fastjet's safe, reliable, and great value product, with a high percentage of first time fliers.

"fastjet continues on its path of expansion, with new routes in Zimbabwe and Zambia planned in 2015. I look forward to this coming year with great confidence as fastjet leverages its first mover advantage to the benefit of our customers and shareholders."

fastjet's report and accounts for the year ended 31 December 2014 (2014 Report and Accounts), notice of the Annual General Meeting (AGM) and the form of proxy, are expected to be posted to shareholders shortly.

The AGM will be held at 10 am on 26 June 2015 at the Goodwood Suite, Hilton Hotel, Gatwick Airport, South Terminal, RH6 OLL.

A copy of the 2014 Report and Accounts will be available to view and download shortly from the Company's website: www.fastjet.com

For more information, contact:

UK media - Citigate Dewe Rogerson	Tel: [phone]
Angharad Couch
Toby Moore
Nick Hayns
South African media - Tribeca Public Relations	Tel:  [phone]
Cian Mac Eochaidh
Kelly Webster
For investor enquiries please contact:
W.H. Ireland Ltd.- Nominated Adviser and Joint Broker	Tel: [phone]
James Joyce
Mark Leonard
Liberum Capital Limited - Joint Broker	Tel:  [phone]
Clayton Bush
Christopher Britton

NOTES TO EDITORS

About fastjet Plc

fastjet Plc is the holding company of the low cost airline fastjet which commenced flights under the fastjet brand in Tanzania in November 2012.  The airline introduced Airbus A319s into its fleet.  By adhering to international standards of safety, quality, security and reliability; fastjet has brought a new flying experience to the African market at unprecedented low prices. fastjet is implementing the low-cost model across Africa and its long-term strategy is to become the continent's first low-cost, pan-African airline.  fastjet Plc is also the holding company of Fly540 Ghana and Angola where operations are currently suspended.

The results of a customer satisfaction survey showed that 100% of customers were likely to recommend fastjet to a friend. In developing its strong brand and identity, fastjet has won and been nominated for a number of awards, including winning three Transform awards for the rebrand and launch of fastjet and the award for "Brand Strategy of the Year" at 2014's Drum Marketing Awards in London.

fastjet Plc is quoted on the London Stock Exchange's AIM market.

For more information see www.fastjet.com

Chairman's statement

Dear Shareholders

On 20 April 2015, the future of our Company was transformed by the completion of a £50 million equity funding. We now enjoy the enviable position of being properly funded to progress our aim of becoming the most successful pan-African low cost airline.

The need for a pan-African low cost airline is unquestionable. Africa's size, challenging terrain and poor infrastructure make air travel the logical choice over the arduous road alternative.

It is our belief that the air service offered by the traditional carriers is severely restricting the development of economies across the continent. Cross border trade, tourism and social benefits are impacted by fares that are artificially high due to a lack of competition, out-dated practices or poor operational policies.

Economic growth and increasing political stability in many African countries is creating positive change. There is a rapidly developing middle class that has an appetite for consumerism and travel. There has never been a greater opportunity to establish a safe, reliable and affordable air travel option for both business and leisure, and in Tanzania we have proved the model works and are set to replicate this across the region.

Challenges do exist however. Certain governments are reluctant to open their markets to increased competition and whilst there are pan-African agreements relating to the de-regulation of African skies, a few authorities still protect their markets in a bid to insulate flag carriers from modern and nimble challengers. Happily other governments embrace the opportunities for the benefits of their population.  

From time to time there will be issues in some of the territories in which we seek to operate. This is the nature of operating in emerging markets. However, provided we deliver according to our plans over the next few years, the value of our Company should increase strongly to reflect that success.

We currently operate three aircraft from our Tanzania base. Our plan is to grow to a fleet of thirty-four aircraft by 2018 operating from bases across the region. In Ed Winter and the executive management team we have the people in place to turn the opportunity into reality. They in turn now have the funding to progress it.

I would like to take this opportunity to thank our staff without whose skill and dedication we would not be in our current strong position.

We look forward in the coming months and years to not only delivering a strong financial return to our investors but also to play our part in democratising air travel in Africa.

Yours sincerely

Clive Carver

Interim Chairman

2 June 2015

Strategic Report

 

fastjet's Vision

 

"To be the most successful pan-African low cost airline"

  To operate domestic and international routes in all economically viable African markets

Africa's low cost airline

fastjet is the holding company of fastjet Airlines Limited (Tanzania), a low-cost airline which operates flights under the fastjet brand in Tanzania using a fleet of three Airbus A319 aircraft. By adhering to the high international standards of safety, security, quality and reliability, fastjet has brought a new flying experience to the African market at low prices. fastjet's long-term strategy is to become the most successful pan-African low-cost airline.

The fastjet low-cost airline was launched in Tanzania on 29 November 2012. It carried more than 350,000 passengers in the first year of operations and sold one million seats by December 2014. Comparing 2014 with 2013, passengers flown increased by 63 per cent, capacity rose by 62 per cent and load factor increased by one percentage point to 73 per cent. During the same period, the average revenue per passenger including ancillary sales increased by 27 per cent. The Group currently operates nine routes to eight destinations in five countries in Africa. Domestically it operates routes connecting Dar es Salaam to Mwanza, Kilimanjaro and Mbeya and Kilimanjaro to Mwanza. It also operates five international routes from Dar es Salaam to Johannesburg (South Africa), Harare (Zimbabwe), Entebbe (Uganda) and Lusaka (Zambia). It also serves Entebbe from Kilimanjaro.

Using its low-cost model, to drive the lowest possible unit costs, and by avoiding costly frills with additional services, such as a baggage or refreshment available as pay-as-you travel optional extras, fastjet can offer its customers affordable fares.

Strategy

fastjet's Tanzanian operation, which was launched on 29^th November 2012, comprises an already well established brand name, a loyal customer base and both domestic and international routes. It is therefore well placed to further develop its existing operations in Tanzania and beyond. The current fleet of three aircraft is now almost fully utilised, a fourth aircraft is expected to join the fleet in Q3 2015 and additional growth opportunities will require more aircraft over the remainder of 2015. This will enable fixed overhead costs to be further spread over a larger operation.

fastjet's successful introduction of the low cost model has stimulated the Tanzanian market in the same way as other such markets elsewhere in the world have been stimulated. The Tanzanian consumer has embraced the brand and model with speed and enthusiasm. High utilisation and reliability, with punctuality of over 90 per cent, have been achieved within the infrastructural constraints of Africa. Experience gained whilst establishing the current operations will be deployed during the expansion into other countries and territories.

fastjet has identified five countries - Kenya, Uganda, Zambia, Zimbabwe and South Africa - as key markets for the initial expansion of its business plan over the next three years. Expansion through this three year plan should create significant shareholder value.

fastjet's business model

fastjet operates a well-proven low cost airline model, operating a single type fleet of modern, fuel efficient, jet aircraft on a short haul, point to point network. Aircraft are maintained to world class standards to ensure both safety and reliability. Complexity is minimised, and resources are highly utilised. A flat management structure empowers staff and allows quick decision making.

fastjet fares are kept to a minimum by excluding extras such as baggage and meals on board. A profitable ancillary revenue stream is therefore produced as fastjet offers services and functionality to customers who require extras.

fastjet's revenue management model uses low fares to stimulate the market. The system develops demand expectations, records sales performance and highlights over and under performance at a granular level. This enables the Company to manage the balance between the revenue per passenger and the number of passengers flown on each flight.

Company structures

African aviation is not liberalised, with each country retaining regulatory control of its own route rights through a series of Bilateral Air Service Agreements. To comply with airline ownership regulations, fastjet already has or will establish a fastjet operating company in each of its target countries. These will all have shareholding structures designed to fully comply with legislation whilst maximising fastjet's economic interest.

Each fastjet operating company will benefit significantly from centralised functions which will provide economies of scale and knowledge sharing. A Group approach to contracts and service providers will enable further efficiencies and reduced fixed costs. A centralised fleet management structure will optimise provision of aircraft across the fastjet Group. A centre of expertise will develop and support fastjet airlines across the region. Centralised services will be geographically located to optimise cost and performance. Areas such as safety management systems, maintenance, pilot selection and training and flight data monitoring will be maintained to international standards, with centralised facilities provided to each company allowing control of operational standards and security across all subsidiaries.

fastjet will charge the operating companies for centrally provided or procured services at costs more favourable than each operating company could obtain in an open market - in particular aircraft, insurance and maintenance services.

Whilst each operating company will be managed by local staff, satisfying local regulatory requirements, fastjet will be presented as one airline to the customer with consistent delivery of brand, safety, reliability, customer service and quality. An optimised integrated network and revenue management system will maximise value across the total network.

Fleet ownership

fastjet expects its fleet to grow using a mix of aircraft ownership models resulting in a fleet of aircraft either leased or financed by equity or debt by 2018. The aircraft fleet will be leased by the fastjet Group to the operating companies as required. fastjet believes that a range of benefits will accrue from bringing purchased aircraft into the fleet, specifically balance sheet enhancement, cash flow reduction and the deferral of maintenance deposits.

Regulatory environment

Although there have been many declarations of an intent to liberalise the aviation market in various parts of Africa, there has been very little regulatory freedom put in place. As a consequence aviation regulation in Africa is very similar to Europe pre 1990s. Each country has individual regulatory requirements regarding control and ownership for an airline company wishing to operate within or from that country. Additionally flights between countries are controlled through Bilateral Air Service Agreements which are unique to each pair of countries. Airlines operating between countries also often need to obtain a Foreign Operator Permit.

The Company continues to lobby at the highest level of governments and within the industry to promote relaxation of the regulatory environment regarding route rights. The regulatory environment regarding operating standards and safety within the industry is variable and in some cases well below international standards. As a consequence, fastjet imposes constraints on its own operations to comply wherever possible as though the airline was regulated in Europe. The Company takes every opportunity to lobby for improved safety and operational regulation and oversight by the various civil aviation authorities.

Laying the foundations

In December 2014, fastjet Tanzania achieved its first profitable month of operations, a major milestone for the Company. The key contributors to this were the maximisation of fleet capacity and improved revenue per passenger. Further contributors were the increase in load factor (the number of passengers as a percentage of the number of available seats flown) and a reduction in the cost of aviation fuel.

In December 2014, fastjet Tanzania operated its aircraft for 10.2 block hours per day, compared to 5.5 block hours per day in December 2013. This increased flying delivered 71 per cent more seats for sale with no growth in its fleet size, resulting in an additional US$2.5 million revenue with no increase in fixed aircraft costs. A maturing brand and high season demand contributed to average revenue per passenger growth of 20 per cent, adding just under US$1.2 million of revenue and a passenger load factor increase of 3 per cent delivering a further US$0.2 million of revenue, with a year-on-year fuel price reduction of 16 per cent saving US$0.4 million.

Tanzanian expansion

fastjet expects to further increase the frequency of flights on its current routes, to link more domestic destinations, to add new domestic destinations as airfields are upgraded to take its A319 aircraft and to add international destinations such as Nairobi, Lilongwe, Mombasa, Kigali and Lubumbashi to the Tanzanian network in line with consumer demand. Flights to destinations in Kenya are dependent on fastjet gaining approval from the Kenyan government. This approval has been outstanding for some time due to disagreements on the application of the Bilateral Air Service Agreements that exist between the two countries. However recent discussions between the Tanzanian and Kenyan governments lead the Company to believe that approval will be granted.

A further opportunity includes the right to operate flights through Entebbe, where Air Uganda has ceased operations and has left a void in air services. Permission has been granted by the Ugandan government for flights from Entebbe to Juba, Kigali, Johannesburg, and Nairobi. Agreement has been given by the South Sudan and the Rwandan governments but is awaited from the Kenyan and South African governments.

The fleet plan has at least 8 aircraft maximising growth potential in Tanzania by 2018 with the potential for further expansion in the future.

Expansion beyond Tanzania

Building on the success of the Tanzanian operation, fastjet plans to roll out its model across the continent. fastjet has identified five countries - Kenya, Uganda, Zambia, Zimbabwe and South Africa - as key markets for the initial expansion of its business plan over the next three years.

The total population of these countries, including Tanzania, is 210 million people, representing approximately 20 per cent of the total African population. These countries are also English speaking with strong historical links to one another, are trading partners, and have experienced significant migration between each other over the years. The geographical proximity of these countries facilitates significant synergistic opportunities including, significantly, aircraft maintenance. The business plan includes growth to a total fleet of up to 34 aircraft by the end of 2018 providing approximately ten million sold seats per year on a domestic and regional network of potentially up to 40 destinations, including all key domestic and regional routes within and originating from the six target countries. This would represent an approximate 13 per cent market share of fastjet's assessment of the 2018 regional and domestic air travel market in these six countries. Assuming that an average customer makes two return trips per year, the business plan is targeting just 1 per cent of the population as customers, or approximately 10 per cent of the target market within that population.

Creating bases in each of these countries is dependent on gaining a number of government approvals. These approvals are granted firstly in the form of an Air Service Permit (ASP) which is normally granted by the Ministry of Transport following a detailed review of the Company's business plan and financial status. Secondly, once an ASP has been granted, the Civil Aviation Authority will issue an Air Operator Certificate (AOC) once it is satisfied that the airline can operate safely and that it complies with all local regulatory requirements. This process is governed by a framework laid down by the International Civil Aviation Organisation. Finally before the airline can operate into other countries those destination countries often need to grant a Foreign Operator Permit (FOP) which is granted for each individual aircraft following a review of the airline's maintenance programme, operations and records of each aircraft to be operated on the route. Currently fastjet has been given ASPs in both Zambia and Zimbabwe and is well advanced in the AOC process in both countries.

Although fastjet's growth is dependent on the granting of these government approvals, there is the possibility of delays for administrative, competitive or other such reasons. To mitigate the risks of delays, the business plan provides considerable optionality in the introduction of new bases and routes and also the rate of aircraft fleet growth.

Pan-African growth

The aviation market in Africa is immature but growing. With 15 per cent of the world's population, 20 per cent of its land mass, and only 3 per cent of world aviation, the African continent offers fastjet the opportunity to grow the aviation market. The 1.1 billion African population is predicted to have a consumer spend of US$1.4 trillion by 2020 (McKinsey) with oil, gas and mineral exports fuelling the economy, and supporting an emerging middle class. There is relative political stability within much of Africa, significant infrastructure development and visible signs of growing consumer consumption.

There are currently less than 0.1 aviation seats per capita per annum within Africa and fastjet estimates that at least 160m more intra-African aviation seats will be required by 2030. There are only nine international intra-African flights currently flown by low-cost carriers, five of which are operated by fastjet.

fastjet presents itself and acts as one airline to its customers, ensuring consistent delivery of safety, reliability, service, brand and quality. While each fastjet airline will have its own local management team, each will benefit from being part of one network with integrated revenue management to maximise value. Internal services will be developed to deliver synergistic benefits across the countries in which we operate, with the fleet structure designed to optimise Group aircraft utilisation.

Historically, safety has been an issue in African aviation with 11.5 serious accidents per million flight hours in Africa versus 2 accidents in the rest of the world (source: IATA 2012). However, fastjet has quickly gained a reputation for being safe and reliable. fastjet achieved this by choosing high quality suppliers, by setting the highest standards for its employees and establishing procedures and training programmes to ensure it meets the highest European standards. fastjet operates wherever possible as though it were regulated by the European Aviation Safety Agency (EASA).

Operational highlights

Reliability

With its vision to be the most successful pan-African low-cost airline, fastjet has introduced international standards of safety, quality, security and reliability with 92 per cent of all fastjet flights in 2014 arriving on time ("on time" being defined as arrival earlier than or within 15 minutes of schedule, excluding cancelled flights).

Passenger growth

Since its launch in 2012, fastjet has flown over 1.2 million passengers. Before flying with fastjet, many passengers had previously used road transport on long, arduous and dangerous journeys. fastjet's established reputation for reliability and punctuality has persuaded passengers to book seats early with the average booking window (days between booking and flight) increasing by 26 per cent in 2014. The average load factor during 2014 was 73 per cent.

Marketing and digital success

fastjet has established one of the strongest brands in Tanzania. Awareness of the logo and parrot mascot is very high and the brand promise is well understood. fastjet has mastered, and will continue to use, a multi-channel marketing strategy to ensure the highest market penetration in its countries of operation.

In order to offset Africa's lower rates of commercial activity on the internet and low credit and debit card usage, fastjet continues to develop award-winning customer communication platforms including the extensive use of social media such as Facebook and Twitter. fastjet's website (www.fastjet.com) continues to stimulate traffic and in 2014 it had over 2.7 million visits with a sales conversion level of more than 12 per cent. Geographically targeted pricing ensures lower fares are available to local users and, to aid engagement, a Swahili language site was added in October 2014.

fastjet has further developed innovative booking channels to maximise opportunities for customers to book fastjet tickets. For example, mobile phone penetration throughout Africa is very high and the fastjet website is optimised for use on smart phones. The mobile phone site is growing in importance as customers increasingly use the 'mobile wallet' functionality to pay for their seats with up to 30 per cent of fastjet revenues in 2014 being transacted through mobile money channels.

Customer Survey

38 per cent of fastjet's passengers surveyed six months after the commencement of fastjet operations were first-time fliers. A similar survey conducted in December 2014 showed 35 per cent of passengers surveyed as first-time fliers. This demonstrates that fastjet's low-cost airline model works in sub-Saharan Africa and is effective in stimulating and growing the market with customer acceptance of the model developing rapidly. The booking window has increased significantly with customers quickly understanding and adopting the 'book early for lowest fare' model, demonstrating confidence in fastjet's high level of reliability. Feedback on customer satisfaction during 2014 has been positive, with 95 per cent of fastjet customers surveyed confirming that they would fly with fastjet again and 9 out of 10 customers stating that they would recommend fastjet to friends, and 17 per cent flying more than ten times with fastjet in 2014.

Awards

fastjet won the gold award at the prestigious Stevie Awards, the world's premier e-commerce business awards, in February 2015. The award recognised the airline's excellence in utilising social media channels in its customer service delivery. fastjet topped the category for Ecommerce & Online Customer Services for pioneering an online customer service revolution across Africa, building a strong and consistent presence across social media, email marketing and the web. The runners up were Delta Airlines and DHL.

In 2014 fastjet achieved the largest online following of any East African airline, with over 400,000 followers across all social channels, which plays a significant part in driving online bookings through the fastjet website.

Underlying financial performance*

fastjet Tanzania

fastjet Tanzania recorded an operating loss before exceptional items of US$22.5 million in 2014 (2013 US$21.6 million), with revenues growing by 106 per cent to US$53.8 million (2013 US$26.1 million).

fastjet Tanzania's revenue growth was driven by a 63 per cent increase in passengers over 2013, and an increase in revenue per passenger of 26 per cent. This passenger growth was achieved utilising the same three aircraft as operated in 2013, but at an increasing level of utilisation (hours flown per aircraft per day) throughout the year. By December 2014, aircraft utilisation had grown to 10.2 block hours per day, against 5.5 block hours per day in December 2013, delivering 62 per cent more seats to the market from the same asset base across 2014.

In December 2014, fastjet Tanzania achieved its first profitable month of operations, a major milestone for the Company, with the key contributors being the improved aircraft utilisation, growth in revenue per passenger, higher load factors, and a small reduction in fuel cost.

Continuing business

Three aircraft operating from fastjet's Tanzania base does not provide the levels of income required to cover the costs of building a pan-African low-cost airline. Despite the business developing through 2014, as demonstrated by the significant revenue growth achieved, operating losses were expected from continuing operations.

The Company's continuing business, consisting of both fastjet Tanzania and its central support organisation, recorded an operating loss before exceptional items of US$30.7 million in 2014 (2013 US$33.7 million). After exceptional items, the Company's continuing business recorded an operating loss of US$43.9 million in 2014 (2013 US$32.0 million). Exceptional items for 2014 are highlighted below.

fastjet Group

The Company recorded a loss for the year of US$72.1m in 2014 (2013 US$55.2 million), of which US$27.7 million (2013 US$22.7 million) is related to discontinued activities as highlighted below.

* Note - 2013 figures above relate to restated figures where appropriate as outlined below and in note 23.

Non-trading financial performance

Exceptional items

The Company experienced several significant exceptional costs in the year. In April 2014, the agreement between the Company and easyGroup for management assistance for aviation advisory services was terminated by the issue of 94,287,227 shares at 1.6p per share at a total non-cash cost of approximately US$2.5 million at the date of issue. Additionally, further to a review of the carrying value of intangible assets (see note 10), the Company made the decision to fully impair the capitalised value of both the brand agreement and the fastjet Tanzania Air Operators Certificate (AOC), with non-cash adverse impacts on the income statement of US$8.9 million and US$1.9 million respectively.

Discontinued activities

During 2014 fastjet ceased operating its loss making Fly 540 businesses in Ghana and Angola, and they remain inactive, awaiting sale or closure. It is the Directors' opinion that these operations qualify as Held for Sale at the 2014 year end, as they were and are being actively marketed and resolution is expected within one year.

Losses from these discontinued activities (see note 3) were US$27.7 million in 2014, compared to US$22.7 million in 2013. In 2014, less than US$0.25 million of fastjet Plc cash was utilised in these discontinued activities.

Restatement of 2012 and 2013

Following discussions with the Conduct Committee of the Financial Reporting Council, the Directors decided a restatement of the Company's results for the years ended 31 December 2012 and 2013 was appropriate.

The reason for the restatement is that the 2012 purchase of Lonrho Plc's loss-making Fly 540 airline division by Rubicon Diversified Investments Plc, (now fastjet Plc) is more correctly treated as a reverse acquisition by Lonrho rather than an acquisition by Rubicon, as the Lonrho board could have sought control of the fastjet Board, although in practice they did not.

The restatement has no cash impact nor any material impact on the 2014 trading results.

The original and restated income statement and balance sheet for the year ending 31 December 2013, along with the original and restated consolidated balance sheets for 31 December 2012 and 31 December 2013, are presented in note 23, also showing the movements caused by restatement. Whilst Lonrho Plc at no point controlled the fastjet Board, Lonrho Plc did have a right to do so at that time, and in retrospect the revised treatment would have been more suitable.

Fuel cost

fastjet Tanzania buys its fuel based on current market prices, exposing the business to fuel price volatility, and any change in market pricing has an impact upon the cost of operations. Whilst fastjet does not currently have any fuel hedging in place, as the business grows and absolute fuel cost exposure increases, fastjet will consider appropriate risk management strategies.

Key performance indicators

The Directors of the Company consider the following to be the key performance indicators when measuring the underlying performance. These measures relate to the operating performance of fastjet Tanzania only:

Measure	2014	2013	Movement
Load Factor	73.3%	72.5%	+0.8pp
Revenue per ASK (Available Seat Kilometre)	7.95c	7.72c	+2.9%
Cost per ASK	11.27c	14.13c	-20.2%
Cost per ASK excl. Fuel	7.93c	10.47c	-24.2%
Aircraft utilisation (average year)	7.9hrs	5.9hrs	+33.9%
Aircraft utilisation (period end)	10.2hrs	5.5hrs	+85.5%

Funding

In April and May 2014 fastjet raised £14.9 million before expenses through a placing and an open offer. A further placing on 1 April 2015 successfully raised an additional £50.0 million before expenses from a mix of new and existing institutional and other investors and fastjet management. The proceeds from the April 2015 placing will be deployed in providing expansion working capital to existing and new operations in Tanzania and in Zimbabwe, Zambia, Kenya, South Africa and Uganda, and to acquire aircraft.

Going Concern

The Directors are confident, on the basis of current financial projections and funds available (see 'Funding' above), and after considering possible changes in trading performance, that the Group has sufficient resources for its operational needs over the relevant period, being until 31 December 2016. Accordingly, the Directors continue to adopt the going concern basis.

Current trading and Outlook

fastjet continues to record significant growth in its year-on-year passenger numbers, with the level of passenger numbers achieved reinforcing fastjet's stronghold in the Tanzanian market, and the attractiveness of both the low-cost fare structure and operational reputation. Growth for 2015 is expected to come both from the Tanzanian operation and from the addition of new fastjet airlines in Zambia and Zimbabwe.

With the current fleet now nearly fully utilised, extra capacity is required with negotiations to lease one additional Airbus A319-131 aircraft already at an advanced stage, with a letter of intent having been signed on 18 May 2015. The aircraft in question will be the first of a number of aircraft that fastjet is planning to add to the fleet this year, with each additional aircraft able to make up to 1,000 more seats per day available to customers. Based upon the 75 per cent load factors currently projected, each aircraft in the fleet is expected to carry approximately 275,000 passengers per annum. Negotiations on further aircraft are underway, with the Company's target being to build a fleet of up to 34 aircraft operating to 40 destinations within and from Tanzania, Zambia, Zimbabwe, South Africa, Kenya and Uganda by the end of 2018.

Ed Winter

Chief Executive Officer

2 June 2015

Company registration number: 5701801

Directors' Report

The Board is committed to maintaining the highest standards of corporate governance. The Listing Rules of the Financial Services Authority incorporate the UK Corporate Governance Code, which sets out the principles of Good Governance, and the Code of Best Practice for listed companies. Whilst the Company is not required to comply with the UK Corporate Governance Code, the Company's corporate governance procedures take due regard of the principles of Good Governance set out in the UK Corporate Governance Code as appropriate to the size and the stage of development of the Company.

Report of the Directors

The Directors present their report together with the audited accounts for the year ended 31 December 2014 and the comparative 12 month period to 31 December 2013.

Results and dividends

The income statement is set out on page 24 and has been prepared in US Dollars, the reporting currency of the Company and the consolidated Group. The Group's net loss after taxation attributable to equity holders of the Company for the year was US$65.9 million (2013 US$48.6 million). No dividends have been paid or proposed.

Post balance sheet events

Zimbabwean Air Service Permit issued

On 25 March 2015, the Group announced it received an Air Service Permit (ASP) from the Ministry of Transport and Infrastructural Development of the Government of Zimbabwe responsible for administering the Civil Aviation Authority of Zimbabwe (CAAZ). This represents a significant step towards the Company obtaining the Air Operating Certificate (AOC) required to launch fastjet Zimbabwe.

Share consolidation

On 21 April 2015, the Company's existing ordinary shares of 1 pence each were consolidated into new ordinary shares of £1 each on the basis of one new ordinary share for every 100 existing ordinary shares held at 5pm on that date.

Fundraising

On 22 April 2015, 50,000,000 new ordinary shares of £1 each were issued at £1 per share via a placing to new and existing institutional, other investors and fastjet management, raising gross proceeds of £50 million.

Appointment of new Non-Executive Director

On 12 May 2015, the Company announced the appointment of Bryan Alexander Coppin Collings as a Non-Executive Director.

Fleet expansion

On 18 May 2015 the Company signed a letter of intent with ICBC International Leasing Company Limited in respect of the leasing of one Airbus A319-131 aircraft, expected to be put into service in the third quarter of 2015, subject to entering into a lease agreement with certain conditions being met.

By order of the Board

Clive Carver

Interim Chairman

2 June 2015

Company registration number: 5701801

Consolidated Income Statement

		2014	2013 (As restated)
	Note	US$'000	US$'000
Revenue		53,759	26,117
Administrative costs (after exceptionals)		(19,540)	(10,448)
Operating costs (after exceptionals)		(78,150)	(47,655)
Group operating loss	4	(43,931)	(31,986)
Operating loss before exceptionals		(30,690)	(33,707)
Termination of easyGroup arrangement	25	(2,504)	-
Impairment of investments	12	-	(6,152)
Impairment of other intangible assets	10	(10,737)	-
Reversal of impairment of receivables due from related parties	25	-	7,873
Operating loss after exceptionals		(43,931)	(31,986)
Finance charges	6	(310)	(445)
Loss from continuing activities before tax		(44,241)	(32,431)
Taxation	7	(156)	-
Loss from continuing activities after tax		(44,397)	(32,431)
Loss from discontinued activities, net of tax	4	(27,685)	(22,721)
Loss for the year		(72,082)	(55,152)
Attributable to:
Shareholders of the parent company		(65,874)	(48,641)
Non-controlling interests		(6,208)	(6,511)
		(72,082)	(55,152)
Loss per share (basic and diluted) (US Dollars)	8
From continuing activities From discontinued activities		(3.37) (1.63)	(10.71) (5.36)
Total		(5.01)	(16.07)

Consolidated statement of comprehensive income
		2014	2013 (As restated)
	Note	US$'000	US$'000
Loss for the year		(72,082)	(55,152)
Foreign exchange translation differences	1	8,859	2,160
Other investment impairment	12	-	(6,152)
Other investment reclassified to profit or loss		-	6,152
Total other comprehensive income for the year		8,859	2,160
Total comprehensive expense		(63,223)	(52,992)
Attributable to:
Shareholders of the parent company		(57,015)	(46,481)
Non-controlling interests		(6,208)	(6,511)
Total comprehensive expense		(63,223)	(52,992)

All items in other comprehensive income will be re-classified to the profit or loss.

Consolidated balance sheet

	Note	31 December 2014 US$'000	31 December 2013 (As restated) US$'000	31 December 2012 (As restated) US$'000
Non-current assets
Other intangible assets	10	335	12,408	16,529
Property, plant and equipment	11	540	30,246	37,903
Investments	12	-	-	6,152
Other non-current trade and other receivables	13	1,186	10,983	7,177
		2,061	53,637	67,761
Current assets
Inventories	14	-	910	763
Cash and cash equivalents	16	6,655	7,580	7,488
Trade and other receivables	13	5,649	5,768	8,439
Assets held in disposal groups classified as held for sale	3	19,853	-	-
		32,157	14,258	16,690
Total assets		34,218	67,895	84,451
Equity
Called up equity share capital	18	69,850	51,097	29,284
Share premium account		108,366	97,392	80,986
Reverse acquisition reserve	23	11,906	11,906	11,906
Retained earnings		(218,227)	(147,239)	(99,148)
Translation reserve		11,533	2,674	516
Equity attributable to shareholders of the Parent Company		(16,572)	15,830	23,544
Non-controlling interests		(23,031)	(22,502)	(15,991)
Total equity		(39,603)	(6,672)	7,553
Liabilities
Non-current liabilities
Obligations under finance leases	17	-	21,291	23,633
Trade and other payables	15	2,118	10,152	10,558
		2,118	31,443	34,191
Current liabilities
Bank overdrafts	16	-	3,870	2,018
Loans and borrowings		-	-	1,998
Obligations under finance leases	17	183	3,529	3,226
Trade and other payables	15	21,714	35,725	35,397
Other financial liabilities		-	-	68
Liabilities directly associated with assets in disposal groups classified as held for sale	3	49,806	-	-
		71,703	43,124	42,707
Total liabilities		73,821	74,567	76,898
Total liabilities and equity		34,218	67,895	84,451

These financial statements were approved and authorised for issue by the Directors on 2 June 2015 and are signed on their behalf by:

Edward Winter

Chief Executive Officer

Company registration number: 5701801

Consolidated cash flow statement
			2014	2013 (As restated)
			US$'000	US$'000
Operating activities
Result for the year			(72,082)	(55,152)
Tax charge/(credit)			156	-
Loss/(Profit) on disposal of fixed assets			-	(2)
Impairment of intangible assets			10,744	2,532
Impairment of aircraft			4,865	4,259
Impairment of other fixed assets			828	-
Impairment of investments			-	6,152
Depreciation and amortisation			2,394	5,067
Finance charges			2,966	3,271
Decrease/(increase) in inventories			910	(147)
Decrease/(increase) in receivables			2,292	(1,560)
Increase in trade and other payables			19,124	3,929
Share option charges			565	548
Net cash flow from operating activities			(27,238)	(31,103)
Investing activities
Sale of property, plant and equipment			-	48
Purchase of intangibles			(119)	(120)
Purchase of property, plant and equipment			(213)	(325)
Net cash flow from investing activities			(332)	(397)
Financing activities
Proceeds from the issue of shares			27,223	36,550
Loan repayments			-	(1,995)
Interest paid			(1,706)	(2,915)
Finance lease payments			(1,591)	(2,040)
Net cash flow from financing activities			23,926	29,600
Net movement in cash and cash equivalents			(3,644)	(1,899)
Foreign currency difference			1,311	139
Opening net cash			3,710	5,470
Closing net cash			1,377	3,710

Classified on the balance sheet as: Cash and cash equivalents*		6,714	7,580
Bank overdrafts*		(5,337)	(3,870)
Closing net cash		1,377	3,710

                   *Closing cash balances held at 31 December 2014 include bank balances of US$58,645 and overdrafts of US$5.3m disclosed within held for sale disposal groups on the consolidated balance sheet.

                   Cash balances at 31 December 2014 include US$180,024 of cash not available for use by the group, being US$54,236 held in Angola where the government restricts movement of currency, and US$106,918 being other amounts held in trust.

Consolidated statement of changes in equity
	Share Capital	Share premium	Merger reserve (As restated)	Translation reserve	Retained earnings (As restated)	Non-controlling Interests	Total equity (As restated)
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Balance at 31 December 2012 (As previously disclosed)	29,284	80,986	-	516	(50,140)	(15,991)	44,655
Restatements (see note 1 and 233)	-	-	11,906	-	(49,008)		(37,102)
Balance at 31 December 2012 (As restated)	29,284	80,986	11,906	516	(99,148)	(15,991)	7,553
Shares issued	21,813	16,406	-	-	-	-	38,219
Share based payments	-	-	-	-	548	-	548
Transactions with owners	21,813	16,406	-	-	548	-	38,767
Foreign exchange difference	-	-	-	2,158	2	-	2,160
Loss for the year	-	-	-	-	(48,641)	(6,511)	(55,152)
Balance at 31 December 2013 (As restated)	51,097	97,392	11,906	2,674	(147,239)	(22,502)	(6,672)

Shares issued	18,753	10,974	-	-	-	-	29,727
Share based payments	-	-	-	-	565	-	565
Transactions with owners	18,753	10,974	-	-	565	-	30,292
Change in non-controlling interests (see note 19)	-	-	-	-	(5,679)	5,679	-
Foreign exchange difference	-	-	-	8,859	-	-	8,859
Loss for the year	-	-	-	-	(65,874)	(6,208)	(72,082)
Balance at 31 December 2014	69,850	108,366	11,906	11,533	(218,227)	(23,031)	(39,603)

Notes to the Group Financial Statements

1.    Significant accounting policies

fastjet plc is the Group's ultimate parent company. It is incorporated in England and Wales. The Company's shares are quoted on the AIM market of the London Stock Exchange.

Basis of preparation

These financial statements are prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value: financial instruments classified as fair value through the profit or loss or as available-for-sale and liabilities for cash-settled share-based payments. Non-current assets and disposal groups held for sale are stated at the lower of previous carrying amount and fair value less costs to sell.

They are prepared in accordance with applicable International Financial Reporting Standards (IFRS) as adopted by the EU.

The significant accounting policies are set out below and have, unless otherwise stated, been applied consistently, in all material respects, throughout all periods presented in these financial statements.

In accordance with IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations', the comparative income statement has been re-presented so that the disclosures in relation to discontinued operations relate to all operations that have been discontinued by the balance sheet date (see note 3). 

Going concern

These financial statements have been prepared on the going concern basis.

The Company has prepared detailed models of the Group's financial results under various scenarios, including under the planned expansion and on the basis of the continuation of the Group's current three aircraft operation. Sensitivity analysis has been performed on the various scenarios, the key assumptions used include estimating forecast yields and load factors and significant costs such as those for fuel. These have been estimated based on the industry experience.

Due to the fundraising that took place in April 2015 which saw capital of £50m raised from a mix of private and institutional investors, Directors and members of staff, the Group now has sufficient funds to continue in business for the foreseeable future.

Restatement

Following discussions with the Conduct Committee of the Financial Reporting Council, the Company has agreed to restate its prior year financial results and position in relation to the purchase of Lonrho Plc's ('Lonrho') loss making Fly 540 airline division ('the Fly 540 group') by the Company, then called "Rubicon Diversified Investments Plc", completed in June 2012 ('the Transaction').

The Board maintains that neither the Company's shareholders nor Lonrho ever intended the arrangements to give Lonrho control of the combined business after completion of the Transaction, and Lonrho never did. Lonrho's intention was to exit, and this was evidenced by the rapid sell-down of their position and the fact that they never appointed the majority of the Board. However, the Board accepts that taking together the terms of the relevant shareholder agreements and Lonrho's initial position as holder of over 70 per cent of the shares in the combined business, under the requirements of IFRS as adopted in the EU, Lonrho should have been deemed to have had the ability to control.

Therefore the Transaction constituted a reverse acquisition under IFRS 3, rather than an acquisition on the part of Rubicon. These financial statements have accordingly restated the current year and comparative information on that basis.

It should be noted that these changes have no impact on the cash position of the group, or on its ability to make distributions to shareholders in the future.

Discussions with the Conduct Committee of the Financial Reporting Council are now closed.

The effects of the restatement are presented in note 23.

 Functional and presentational currencies

All amounts are presented in US Dollars being the Group's presentational currency. This currency has been chosen, as the Group's principal expenses and product prices are denominated in dollars, due to the nature of operating in the aviation sector. All amounts are shown in round thousands (US$'000) except where indicated.

In preparing the financial statements of the individual companies, transactions denominated in foreign currencies are translated into the respective functional currency of the Group entities using the exchange rates prevailing at the dates of transactions.

Non-monetary assets and liabilities are translated at the historic rate. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the rates of exchange ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that fair value was determined.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the income statement for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value in respect of which gains and losses are recognised directly in equity are also recognised directly in equity.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing at the reporting date. Income and expense are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case weighted average rates are used. Exchange differences arising, if any, are classified in equity and are transferred to the Group's foreign currency translation reserve within equity. Such translation is recognised as income or as expense in the period in which the operation is disposed of.

Subsidiaries within the Group hold monetary intercompany balances for which settlement is neither planned nor likely to occur in the foreseeable future and thus are considered to be part of the Group's net investment in the relevant subsidiary. The Group has, in this 2014 financial year, changed its treatment of exchange differences arising on translation of these balances. In previous periods these had been treated in the same way in the consolidated results as they had in the individual company, being a debit or credit to the income statement. In 2014 this has been changed in acknowledgement of the equity-like nature of these balances, and they are now recognised on consolidation directly into equity through the Consolidated Statement of Other Comprehensive Income, only being recognised in the Consolidated Income Statement on the disposal of the net investment.

Non-GAAP performance measures

The Board believe that these measures provide useful information for the shareholders on the underlying performance of the business. These measures are consistent with how the business performance is measured internally. The adjusted operating loss is not a recognised profit and loss measure under adopted IFRS and may not be directly comparable with "adjusted" profit and loss measures used by other companies. The adjustments made to operating loss exclude exceptional charges, which are predominately one-off in nature and therefore create volatility in reported earnings.   

New accounting standards, interpretations and amendments

The following standards, amendments and interpretations have been adopted for the first time in these financial statements, none of which had an impact on the consolidated financial statements:

·    IFRS 10, IFRS 11, IFRS 12, and IAS 27 Investment entities (amendments).

·    IAS32 Offsetting financial Assets and Financial Liabilities (amendments).

·    IAS 36 Recoverable Amount Disclosures for Non-Financial Assets (amendments).

·    IAS39 Novation of Derivatives and Continuation of Hedge Accounting (amendments).

·    IFRIC21 Levies.

Recent accounting developments

The following Adopted IFRSs have been issued but have not been applied by the Group in these financial statements. Their adoption is not expected to have a material effect on the financial statements unless otherwise indicated:

·    IFRS 9 Financial Instruments

·    IFRS 14 Regulatory Deferral Accounts

·    IFRS 15 Revenue from Contract with Customers

·    Defined Benefit Plans: Employee Contributions - Amendments to IAS 19

·    Accounting for Acquisitions of Interests in Joint Operations - Amendments to IFRS 11

·    Clarification of Acceptable Methods of Depreciation and Amortisation - Amendments to IAS 16 & IAS 38

·    Agriculture: Bearer Plants - Amendments to IAS 16 and IAS 41

·    Equity Method in Separate Financial Statements - Amendments to IAS 27

·    Sale or Contribution of Assets between and Investor and its Associate or Joint Venture - Amendments to IFRS 10 and IAS 28

Basis of consolidation

The Group financial statements consolidate those of the Company and its subsidiary companies drawn up to 31 December 2014. Subsidiaries are entities over which the Group has the power to control the financial and operating policies so as to obtain benefits from its activities. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. The results of subsidiaries acquired or disposed of during the accounting period are including in the Group financial statements from/to the date of acquisition or disposal, respectively. The date of acquisition or disposal is the date from/to which the Company has control over the subsidiary.

Unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.

The portion of a non-controlling interest is stated at the non-controlling interest's proportion of the fair values of the assets and liabilities recognised. Subsequently, losses applicable to the non-controlling interest in excess of the non-controlling interest in the subsidiary's equity are allocated against the interests of the Group where the non-controlling interest has a specific exemption from making an additional investment to cover the losses. Future profits attributable to the non-controlling interest are not recognised until the unrecognised losses have been extinguished.

Business combinations

The group accounts for the acquisition of subsidiaries and businesses using the purchase method. The cost of acquisition is measured at the aggregate of the fair values of assets given and equity instruments issued, plus any liabilities assumed. The acquired entities' assets, liabilities and contingent liabilities that meet the recognition criteria set out in IFRS 3 (Revised) are recognised at fair value.

Goodwill, being the excess of the cost of acquisition, as defined above, over the Group's interest in the net fair value of the assets, liabilities and contingent liabilities recognised.

The interest of non-controlling interests in the acquired entities is initially measured at the non-controlling party's proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

These financial statements include restatements related to the business combination in 2012 between Rubicon Diversified Investments Plc and Lonrho Plc's aviation arm. Details of these restatements are provided in note 23.

Discontinued and held for sale operations

A discontinued operation is a component of the Group's business that represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale.

Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier.

When an operation is classified as a discontinued operation, the statement of comprehensive income is re-presented as if the operation had been discontinued from the start of the comparative period. Discontinued operations are presented in the consolidated statement of comprehensive income as a single line which comprises the post-tax profit or loss of the discontinued operation along with the post-tax gain or loss recognised on the re-measurement to fair value less costs to sell or on disposal of the assets or disposal Groups constituting discontinued operations.

Held for sale operations are presented on the balance sheet on two lines, representing total assets and total associated liabilities.

Property, plant and equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation and any provision for impairment. Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows:

Aircraft                                                                  - 5% to 7% of cost

Leasehold property                                             - term of the lease

Leasehold improvements                                   - term of the lease

Motor vehicles                                                     - 25% of cost

Fixtures, fittings and office equipment           - 15% to 25% of cost
Plant and machinery                                          - 10% of cost

Other intangible assets

Intangible assets (other than goodwill) are recognised at cost less accumulated amortisation charges and any provision for impairment. Amortisation is charged on a straight-line basis, as follows:

Air Operator Certificates (AOCs)                                                      - 10 years

Brand licence agreement                                                                   - 10 years

Computer Software                                                                             - 4 years

Impairment of assets

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level.

All individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset's or cash-generating unit's carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each cash-generating unit and determines a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked to the Group's latest approved budget, adjusted as necessary to exclude the effects of future reorganisations and asset enhancements. Discount factors are determined individually for each cash-generating unit and reflect their respective risk profiles as assessed by management.

Impairment losses for cash-generating units reduce the recognised value of assets in the cash-generating unit. All assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. An impairment charge is reversed if the cash-generating unit's recoverable amount exceeds its carrying amount. An impairment charge on the value of goodwill cannot be reversed in a subsequent period.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost includes the purchase cost of the item itself, plus any direct costs incurred in bringing the item to its present location and condition.

Leases

Operating leases

Rental charges on operating leases are charged to the income statement on a straight-line basis over the life of the lease. In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis over the life of the respective asset.

Finance leases

Where the Group enters into a lease, which entails taking substantially all the risk and rewards or ownership of an asset, the lease is treated as a 'finance lease'. The asset is recorded in the balance sheet as property, plant and equipment, and is depreciated over the estimated useful life to the Group. The asset is recorded at the lower of its fair value, less accumulated depreciation, and the present value of the minimum lease payments at the inception of the finance lease. Future instalments under such leases, net of finance charges, are included as obligations under finance leases. Rental payments are apportioned between the finance element, which is charged to the income statement, and the capital element, which reduces the outstanding obligation for future instalments. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable that the Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Leased aircraft maintenance provisions

The Group incurs liabilities for maintenance costs in respect of aircraft leased under operating leases during the term of the lease. These arise from the contractual obligations relating to the condition of the aircraft when it is returned to the lessor. To discharge these obligations, the Group will either need to compensate the lessor for the element of the life of the component or maintenance intervals used, or carry out the maintenance check before return of the aircraft to the lessor.

The provisions recorded and charged to the income statement are dependent on the life of the component or maintenance interval used and the individual terms of the lease.

No provision is recorded during the initial period of lease agreements where no compensation or maintenance is required prior to hand-back.

Leased aircraft maintenance provisions (continued)

After a component or maintenance interval passes its half-life (or another more appropriate measure depending on the individual lease) and compensation would be due to the lessor in accordance with the terms of the lease, a provision and matching income statement charge is recorded equal to the amount of compensation that would be required based on the hours or cycles flown at the balance sheet date.

Where maintenance is provided under 'power by the hour' contracts and maintenance paid to maintenance providers to cover the cost of the work is deemed to be irrecoverable, these payments are expensed as incurred and maintenance provisions are reduced to reflect the fact that the Group has already paid for the related maintenance work. Maintenance deposits that are refundable are recorded as other receivables.

Estimates are required to establish the likely utilisation of the aircraft, the expected cost of a maintenance check at the time it is expected to occur, the condition of an aircraft and the lifespan of life-limited parts. The bases of all estimates are reviewed once each year and also when information becomes available that is capable of causing a material change to an estimate, such as renegotiation of end of lease return conditions, increased or decreased utilisation, or unanticipated changes in the cost of heavy maintenance services.

Revenue

Revenue is measured by reference to the fair value of consideration received or receivable by the Group for goods supplied and services provided, excluding VAT (or overseas equivalent).

Revenue for the provision of air travel is recognised on the date of departure. Flights paid for in advance of the date of travel are recorded as deferred income and then recognised as revenue on the date of departure.

Ancillary fees such as baggage fees are also recognised on the date of departure. Ancillary fees such as flight alteration fees are recognised on the date incurred. Credit card payment fees are recognised on the date payment is made.

Pension costs

The Group has no pension scheme for Directors or employees. The Company is preparing to meet its obligations under the Workplace pensions legislation in the UK.

Taxation

Current tax is the tax currently payable or receivable based on the result for the period.

Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future. In addition, tax losses available to be carried forward as well as other income tax credits to the Group are assessed for recognition as deferred tax assets.

Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the balance sheet date.

Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income statement, except where they relate to items that are charged or credited directly to equity in which case the related deferred tax is also charged or credited directly to equity.

Share-based payments

The Company operates equity-settled share-based remuneration plans for certain employees (including Directors) and has also issued share options to easyGroup Holdings Limited as part of the consideration for a brand licence agreement. The Company has also issued warrants in connection with share placings.

Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, together with a corresponding increase in equity, based upon the Company's estimate of the number of shares that will vest.

Fair value is measured using the Black-Scholes pricing model. The expected life used in the model is adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. Where employees are rewarded using share-based payments, the fair values of employees' services are determined indirectly by reference to the fair value of the instrument granted to the employee.  Upon exercise of share options, the proceeds received net of attributable transaction costs are credited to share capital, and where appropriate to share premium.

Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker. The Chief Operating Decision Maker, in the context of IFRS 8 "Operating segments", is considered to be the Board of Directors. The Board of Directors monitors the performance of business segments and makes decisions about the allocation of resources between those segments.

Financial instruments

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits.

Equity

Equity comprises the following:

·    "Share capital" represents the nominal value of equity shares that have been issued.

·    "Share premium" represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issue.

·    "Retained earnings" include all current and prior period results as disclosed in the income statement.

·    "Translation reserve" represents the cumulative amount of foreign exchange gains and losses recognised outside of retained earnings.

·    "Reverse acquisition reserve" represents the balancing figure on combination of Rubicon and Lonrho's reserves in 2012.

Financial assets

All financial assets are recognised when the Group becomes a party to the contractual provisions of the instrument. The Group has loans and receivables and other investments in these financial statements.

Loans and receivables are initially measured at fair value and subsequently at amortised cost using the effective interest method, less provision for impairment. Any change in their value through impairment or reversal of impairment is recognised in the income statement. Other investments are measured at fair value through other operating income.

Financial liabilities

Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party to the contractual provisions of the instrument. Financial liabilities are classified according to the substance of the contractual agreements entered into.

Other financial liabilities are initially recognised at fair value, net of transaction costs, and are subsequently recorded at amortised cost using the effective interest method.

The Group's financial liabilities include finance leases, borrowings, and trade and other payables.

Use of estimates and judgements

The preparation of financial statements in conformity with Adopted IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Estimates made by management in the application of Adopted IFRS that have significant effect on the financial statements with a significant risk of material adjustment in the next year are discussed in the following notes:

·    valuation of Investment (note 12)

·    valuation of Held for Sale assets (above, and note 3)

·    maintenance provisions (above)

·    share based payments (note 20)

·    impairment of other intangibles (note 10)

·    impairment of aircraft (note 11)

Judgements made by management in the application of Adopted IFRS that have significant effect on the financial statements are:

·    the determination of the functional currencies of subsidiaries

·    the determination of the accounting treatment in respect of the acquisition of investments as either associates, joint ventures, joint operations or subsidiaries (note 19)

·    the determination whether the Company remains in a 'start-up' phase for the purposes of impairment reviews (note 10)

·    the determination of when an operation or asset becomes held for sale or discontinued (see note 3)

2.    Segmental reporting

The Group's continuing business comprises that of airline services. That business operates across a number of different geographical territories, all within Africa. Accordingly, these geographical territories are the basis for the Company's segmental reporting disclosure.

The results of fastjet Plc head office and the Group's several holding companies are disclosed under the heading 'Central'.

The accounting policies of these segments are in line with those set out in note 1.

The 'Adjust for discont.' adjustment column removes the Ghanaian and Angolan discontinued and Held for Sale operations and their associated assets from the total, to agree the balances to the primary statements.

Year ended 31 December 2014	Continuing		Discontinued		Adjust for discont.
	Tanzania	Central	Angola	Ghana		Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Revenue
External	53,759	-	1,683	2,583	(4,266)	53,759
Inter-segment	-	-	-	-	-	-
	-----------------	-----------------	-----------------	-----------------	-----------------	-----------------
Total Revenue	53,759	-	1,683	2,583	(4,266)	53,759
	-----------------	-----------------	-----------------	-----------------	-----------------	-----------------
EBITDA	(22,021)	(9,539)	(8,857)	(9,411)	18,268	(31,560)
Interest payable	-	(310)	(915)	(1,741)	2,656	(310)
Depreciation and amortisation	(483)	(1,151)	(355)	(333)	688	(1,634)
Impairments	(1,887)	(8,850)	(3,453)	(2,620)	6,073	(10,737)
Tax	(156)	-	-	-	-	(156)
	-----------------	-----------------	-----------------	-----------------	-----------------	-----------------
Net loss	(24,547)	(19,850)	(13,580)	(14,105)	27,685	(44,397)
	===========	===========	===========	===========	===========	===========
Non-current assets	441	1,620	10,573	9,210	(19,783)	2,061

Year ended 31 December 2013 (As restated)	Continuing		Discontinued		Adjust for discont.
	Tanzania	Central	Angola	Ghana		Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Revenue
External	26,055	62	18,771	8,534	(27,305)	26,117
Inter-segment	-	-	-	-	-	-
	-----------------	-----------------	-----------------	-----------------	-----------------	-----------------
Total Revenue	26,055	62	18,771	8,534	(27,305)	26,117
	-----------------	-----------------	-----------------	-----------------	-----------------	-----------------
EBITDA	(21,459)	(10,355)	(6,903)	(2,270)	9,173	(31,814)
Interest payable	-	(445)	(1,348)	(1,478)	2,826	(445)
Depreciation and amortisation	(141)	(1,752)	(1,738)	(1,632)	3,370	(1,893)
(Impairments)/reversal of impairments	-	1,721	(3,959)	(3,393)	7,352	1,721
	-----------------	-----------------	-----------------	-----------------	-----------------	-----------------
Net loss	(21,600)	(10,831)	(13,948)	(8,773)	22,721	(32,431)
	===========	===========	===========	===========	===========	===========
Non-current assets	2,558	21,391	15,062	14,626	-	53,637

The Board monitors the performance of the business units and the overall group. It monitors loss after tax and its individual components and therefore these are disclosed above. Assets and liabilities are not reported by business unit.

3.    Discontinued Activities

During 2014 fastjet progressed its program of rationalising the loss making Fly 540 portfolio acquired from Lonrho in 2012.

In April 2014 the Company announced its intention to restructure its Ghanaian and Angolan operations in order to concentrate on its core East African business. The Ghanaian and Angolan businesses are currently inactive awaiting sale.

It is the Directors' opinion that these operations qualify as Held for Sale at the 2014 year end, as they were and are being actively marketed and resolution is expected within one year.

Accordingly the assets and liabilities of these businesses have been aggregated and are shown on the Consolidated Balance Sheet under 'Assets in disposal groups classified as held for sale' and 'Liabilities directly associated with assets in disposal groups classified as held for sale'. Assets held for sale at the year-end include two aircraft owned by another group company that were previously used by the Ghanaian and Angolan operations.

The following are the totals for the major classes of assets and liabilities relating to these operations:

	31 December 2014
				Angola	Ghana	Total
	Assets			US$'000	US$'000	US$'000
	Non-current assets
	Other intangible assets			-	-	-
	Aircraft			9,209	9,210	18,419
	Property, plant and equipment			-	-	-
	Other investments			-	-	-
	Other non-current trade and receivables			1,364	-	1,364
				---------------	---------------	---------------
				10,573	9,210	19,783
				============	============	============
Current assets Inventories - - - Cash and cash equivalents 54 5 59 Trade and other receivables - 11 11 --------------- --------------- --------------- 54 16 70 ============ ============ ============
		Total assets in disposal groups classified as held for sale		10,627	9,226	19,853
				============	============	============
		Liabilities
		Current liabilities
		Payables under finance leases		12,125	12,125	24,250
		Bank overdrafts		976	4,361	5,337
		Trade and other payables		17,789	2,430	20,219
				---------------	---------------	---------------
				30,890	18,916	49,806
				============	============	============

The loss on discontinued operations on the Statement of Comprehensive Income can be analysed as follows:

Year ending 31 December 2014		Angola	Ghana	Total
		US$'000	US$'000	US$'000
Revenue		1,683	2,583	4,266
Operating costs		(10,895)	(12,327)	(23,222)
		---------------	---------------	---------------
Operating loss		(9,212)	(9,744)	(18,956)
		---------------	---------------	---------------
Exceptional items		(3,453)	(2,620)	(6,073)
		---------------	---------------	---------------
Operating loss after exceptional items		(12,665)	(12,364)	(25,029)
		---------------	---------------	---------------
Finance charge		(915)	(1,741)	(2,656)
		---------------	---------------	---------------
Loss before tax		(13,580)	(14,105)	(27,685)
		---------------	---------------	---------------
Tax charge		-	-	-
		---------------	---------------	---------------
Loss for the year		(13,580)	(14,105)	(27,685)
		---------------	---------------	---------------

Year ending 31 December 2013		Angola	Ghana	Total
		US$'000	US$'000	US$'000
Revenue		18,771	8,534	27,305
Operating costs		(27,412)	(12,436)	(39,848)
		---------------	---------------	---------------
Operating loss		(8,641)	(3,902)	(12,543)
		---------------	---------------	---------------
Exceptional items		(3,959)	(3,393)	(7,352)
		---------------	---------------	---------------
Operating loss after exceptional items		(12,600)	(7,295)	(19,895)
		---------------	---------------	---------------
Finance charge		(1,348)	(1,478)	(2,826)
		---------------	---------------	---------------
Loss before tax		(13,948)	(8,773)	(22,721)
		---------------	---------------	---------------
Tax charge		-	-	-
		---------------	---------------	---------------
Loss for the year		(13,948)	(8,773)	(22,721)
		============	============	============

Exceptional items in both years presented relate to the impairment of aircraft and other fixed assets.

The 2014 Group Statement of Cash Flows contains the following elements related to Discontinued operations:

		Angola	Ghana	Total
		US$'000	US$'000	US$'000
Net cash flows attributable to operating activities		(2,448)	(1,380)	(3,828)
Net cash flows attributable to investing activities		(3,418)	(4,297)	(7,715)
Net cash flows attributable to financing activities		(1,494)	(646)	(2,140)

The average number of staff employed by the discontinued businesses during the year amounted to:	Year ended 31 December 2014	Year ended 31 December 2013
	Number	Number
Flight crew	27	69
Aircraft maintenance	11	26
Administration and management	14	33
Ground and flight operations	30	82
Sales and marketing	15	34
	----------------	----------------
	97	244
	===========	===========

The aggregate payroll costs of the above were:

	Year ended 31 December  2014 US$'000	Year ended 31 December  2013 US$'000
Wages and salaries	4,585	7,995
Social security costs	252	557
	----------------	----------------
	4,837	8,552
	===========	===========

Valuation of assets and liabilities in disposal groups held for sale

The Directors assessed the assets and liabilities of the discontinued businesses and these are presented as impaired to their likely value on sale.

The sale of one aircraft has completed since the year end, and the sale proceeds have been used to calculate its impairment. Under IFRS 13 the fair value hierarchy is level two.

The sale of the second aircraft has not completed, although sale documents have been drawn up. The impairment is based on these and the Directors' estimation of the likely outcome. This is classed as a level two estimate.

Assets in the disposal group other than the two aircraft have been impaired in full, and liabilities held at book value. These estimates are classed as level three.

4.    Operating loss

Operating loss is stated after charging:	2014   US$'000	2013 (As restated) US$'000
Operating lease costs
-       Property	775	745
-       Aircraft	5,268	4,427
Depreciation of property, plant and equipment
-       Owned	193	183
Amortisation of intangible assets
-       Other intangibles	1,441	1,710
Impairment of intangibles	10,737	-
Impairment of investments	-	6,152
Reversal of impairment of receivables from related parties	-	(7,873)
Payment on termination of easyGroup agreement	2,504	-
(Profit)/Loss on disposal of fixed assets	-	(2)
Foreign exchange losses	939	230
Fees payable to the Company's auditor (and its network affiliates) for
-       The audit of the Group's annual accounts	147	130
-       The audit of subsidiary companies' accounts	50	149
-       Other services	16	47
Share based payments	565	548
	============	============

5.    Employees

The average number of staff (including Directors) employed by the Group during the year amounted to:	2014	2013 (As restated)
	Number	Number
Flight crew	68	61
Aircraft maintenance	4	6
Administration and management	23	21
Ground and flight operations	20	23
Sales and marketing	59	81
	----------------	----------------
	174	192
	===========	===========

Average staff employed in the discontinued operations (see note 3)	97	244
	----------------	----------------
Total	271	436
	===========	===========

5.    Employees (continued)

The aggregate payroll costs of the above were:	Year ended 31 December  2014 US$'000	Year ended 31 December  2013 (As restated) US$'000
Wages and salaries	6,650	6,590
Social security costs	735	835
Share based payments (note 20)	565	548
	----------------	----------------
	7,950	7,973
	===========	===========
Staff costs in discontinued operations (see note 3)	4,837	8,552
	===========	===========
Total staff costs	12,787	16,525

The aggregate remuneration of the Directors in the year was:	Year ended 31 December  2014 US$'000	Year ended 31 December  2013 US$'000
Wages and salaries	1,628	1,049
Fees	146	77
Bonuses	772	189
Benefits	25	11
	----------------	----------------
	2,571	1,326
	===========	===========

The remuneration of the highest paid Director was US$955,000 (2013 : US$794,000)

6.    Finance income and expense

	Year ended 31 December         2014	Year ended 31 December 2013 (As restated)
Finance expenses	US$'000	US$'000
Other	310	445
	-----------------------------------------------	------------------------------------------------
	310	445
	============	============

7.    Tax

	Year ended 31 December  2014	Year ended 31 December  2013 (As restated)
	US$'000	US$'000
Current tax expense:
Current tax for the year	156	-
Adjustment to current tax in respect of previous years	-	-
	-----------------------------------------------	------------------------------------------------
	156	-
	============	============
Deferred tax (credit) / expense:
Origination and reversal of temporary differences	-	-
Reduction in tax rate	-	-
	-----------------------------------------------	------------------------------------------------
Tax expense in income statement (excluding discontinued operations)	156	-
Tax from discontinued operations	-	-
	-----------------------------------------------	------------------------------------------------
Total tax expense	156	-
	============	============

Reductions in the UK corporation tax rate from to 23 per cent to 21 per cent (effective from 1 April 2014) and 20 per cent (effective 1 April 2015) were substantively enacted on 2 July 2013. This will reduce the Company's future current tax charge accordingly.

A reconciliation of the tax expense to the reported losses is given below:

	Year ended 31 December 2014	Year ended 31 December  2013 (As restated)
	US$'000	US$'000
Loss before tax	(71,926)	(55,152)
	============	============

Loss before tax multiplied by the standard rate of corporation tax in the UK of 21.5% (2013: 23.25%)	(15,464)	(12,823)
Current year losses for which no deferred tax has been recognised	9,279	8,792
Tax losses not available for carry forward	7,041	2,926
Expenses not deductible for tax purposes	718	2,520
Overseas tax rates	(1,574)	(1,415)
Overseas turnover tax	156	-
	----------------------------------------------	----------------
Total current tax (credit) / charge (including tax on discontinued operations)	156	-
	===========	============

At 31 December 2014 the Group had accumulated tax losses of approximately US$96m (2013: US$67m) available for offset against future taxable trading profits. The ability to utilise these tax losses is uncertain in some jurisdictions and therefore the Directors consider it inappropriate to recognise this potential deferred tax asset until such time as the Group begins to generate taxable profits against which the losses will be utilised.

8.    Loss per share

Loss per share is calculated by dividing the loss for the period attributable to equity shareholders in the Parent Company (as stated in the income statement) by the weighted average number of shares in issue during the period.  

On 21 April 2015 the Company performed a share consolidation, issuing 1 new ordinary share of £1 for each 100 existing ordinary share held at that date.

The weighted average number of shares in issue during the period, adjusted for the 2015 share consolidation, was 13,155,362 (2013: 3,027,660). The loss for the purposes of basic earnings per share being the net loss attributable to the equity holders of the parent was US$44,396,509 for continuing operations and USD$21,477,255 for discontinued operations (2013 as restated: US$32,431,202 continuing, USD$16,210,157 discontinued).

The options and warrants in issue have no dilutive effect in either period because the Group incurred a loss on continuing and discontinued activities in both years.

9.    Goodwill

The restatement of the Group's results on the basis that the transaction between Rubicon and Lonrho in 2012 constituted a reverse acquisition means that no goodwill is carried on the group balance sheet either at 31 December 2013 or 31 December 2014.

10.  Other intangible assets

	AOCs (As restated) US$'000	Brands (As restated) US$'000	Computer software US$'000	Total    (As restated) US$'000
Cost
At 31 December 2012	5,462	11,764	171	17,397
Additions	-	-	124	124
Reclassification	-	-	12	12
At 31 December 2013	5,462	11,764	307	17,533
Additions	-	-	126	126
Foreign exchange differences	-	-	(23)	(23)
Transfer to disposal group	-	-	(20)	(20)
At 31 December 2014	5,462	11,764	390	17,616
Amortisation and Impairment
At 31 December 2012	273	588	7	868
Charge for the year	546	1,158	21	1,725
Impairment for the year	2,532	-	-	2,532
At 31 December 2013	3,351	1,746	28	5,125
Charge for the year	225	1,168	48	1,441
Impairment for the year	1,886	8,850	8	10,744
Foreign exchange differences	-	-	(9)	(9)
Transfer to disposal group	-	-	(20)	(20)
At 31 December 2014	5,462	11,764	55	17,281

10.  Other intangible assets (continued)

Net carrying amount
At 31 December 2014	-	-	335	335
At 31 December 2013	2,111	10,018	279	12,408
At 31 December 2012	5,189	11,176	164	16,529

Impairment testing

In previous years the Company's forecasts have been prepared on a 'start-up' basis. fastjet launched operations in Tanzania on 29 November 2012 and, as explained in the strategic report, new routes are expected to be secured for the CGU to be fully operational.  In previous years the Directors considered the CGU to be in a start-up phase therefore the cash flow projections included the outflows required to launch the new international routes. The period over which a CGU is considered to be in its start-up phase is a key area of judgement, and the Directors have concluded that it is no longer appropriate for the CGU to be considered a start-up.

The Directors have prepared a model to support the going concern assumption as detailed in note 1. This model includes the new routes and aircraft that the group expects to acquire. Under IAS36 the impairment review at 31 December 2014 has been performed based on the assets held by the CGU at that date.

The current business as it existed at the year end, consisting of three aircraft operating out of Tanzania along with various offices and staff in Africa and the UK, is by itself unable to generate the profitability required to justify holding the intangible assets (being the fastjet brand and Tanzanian Air Operating Certificate) at their previous values. They have therefore been impaired accordingly.

Tanzania

Key assumptions used in the calculation of recoverable amounts are discount rates, terminal values and EBITDA growth rates. The values assigned to the key assumptions represented management's assessment of future growth trends in aviation both in Africa and the country of operation.

Forecasts have been prepared on a value in use basis. The cash flow projections include specific estimates for 4 years and terminal growth rate of 0 per cent thereafter.

The key assumptions included estimating forecast yields and load factors and significant costs such as those for fuel. These have been estimated based on industry experience. Frequency increases are assumed as routes develop.

Sensitivity analysis has been performed by developing different scenarios. There are uncertainties built into the scenarios relating to load factors and revenue yield achieved.

The Tanzanian Cash Generating Unit (CGU) forecast under a three aircraft model is cash negative over a four year period, hence the decision to impair the carrying value of the associated intangibles in full. 

10. 

11.  Property, plant and equipment       

	Aircraft	Property	Plant and machinery	Fixtures and equipment	Motor vehicles	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Cost
At 31 December 2012	37,112	2	751	1,434	206	39,505
Additions	111	-	-	149	65	325
Disposals	-	-	-	(86)	(138)	(224)
Reclassification to intangible assets	-	-	-	(12)	-	(12)
Foreign currency difference	-	-	(3)	(43)	(9)	(55)
At 31 December 2013	37,223	2	748	1,442	124	39,539
Additions	-	5	40	142	25	212
Disposals	-	-	-	-	(1)	(1)
Reclassification to depreciation	-	-	-	(7)	(1)	(8)
Foreign currency difference	(7)	-	(7)	(260)	(37)	(311)
Transfer to disposal group	(37,093)	(2)	(616)	(739)	(63)	(38,513)
At 31 December 2014	123	5	165	578	47	918
	==================	===================	===================	===================	==================	===============

Depreciation and Impairment
At 31 December 2012	1,373	-	62	124	43	1,602
Charge for the year	3,060	-	124	283	71	3,538
Impairment for the year	4,259	-	-	-	-	4,259
Disposal	-	-	-	(4)	(102)	(106)
At 31 December 2013	8,692	-	186	403	12	9,293
Charge for the year	538	1	120	167	54	880
Impairment for the year	4,865	-	391	397	9	5,662
Reclassification from cost	-	-	-	(7)	(1)	(8)
Foreign exchange differences	(8)	-	(4)	(44)	(31)	(87)
Transfer to disposal group	(13,975)	-	(616)	(738)	(33)	(15,362)
At 31 December 2014	112	1	77	178	10	378
Net carrying amount
At 31 December 2014	11	4	88	400	37	540
	==================	====================	===================	===================	==================	===============
At 31 December 2013	28,531	2	562	1,039	112	30,246
At 31 December 2012	35,739	2	689	1,310	163	37,903

11.  Property, plant and equipment (continued)

The net book value of property, plant and equipment held on finance leases was US$23,117,992 (2013: US$29,864,000).

During the year aircraft held under finance leases were offered for sale and impaired accordingly, forming part of the loss on discontinued activities and the asset disclosed under held for sale assets. The impairment had been calculated and included in the 2013 results, and has been amended for subsequent movements as follows:

Aircraft impairment loss	2014	2013
	US$'000	US$'000
Book value	27,983	32,724
Maintenance reserves	(5,159)	(4,865)
Adjusted book value	22,824	27,859
Anticipated proceeds net of selling costs	(17,959)	(23,600)
Impairment	4,865	4,259

12.  Other investments

Cost	As Restated US$'000
At 31 December 2012 and 31 December 2013	6,152
Disposal	(6,152)
As at 31 December 2014	-
Amortisation and Impairment
At 1 January 2013	-
Impairment for the year	6,152
At 31 December 2013	6,152
Disposal	(6,152)
At 31 December 2014	-
Net carrying amount
At 31 December 2014	-
At 31 December 2013	-
At 31 December 2012	6,152

The investment represented the Group's interest in Five Forty Aviation Limited, and was held at cost.         

12.  Other investments (continued)

Lonrho Aviation (B.V.I.) Limited held 49 per cent of Five Forty Aviation Limited prior to the reverse acquisition of Rubicon in 2012.

Subsequent to this, the acquisition of a further 49.98 per cent economic interest in Five Forty Aviation Limited was approved at a General Meeting on 29 June 2012 and completed on 2 July 2012. However, the vendor of the 49.98 per cent share disputed that the acquisition had been completed. This led to legal claims by both parties over ownership and other matters. Following discussions, a Memorandum of Understanding was signed on 23 April 2013 in which both parties agreed to halt legal proceedings so that a mutually beneficial resolution could be negotiated and implemented.                                  

As a result of the dispute, the Directors are of the view that under IFRS 10 they had neither control (which is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities) or significant influence (which is the power to participate in the financial and operating policy decisions of the investee but is not in control or joint control over those policies.) over Five Forty Aviation Limited with effect from 29 June 2012. Consequently the Group accounted for its holding in Five Forty Aviation Limited as an Investment. 

Given the disputes and lack of financial information and operational involvement, the Directors impaired the investment by US$6,152,000 to US$Nil in 2013.    

In 2014 a settlement was reached for the disposal of the investment, for further information see note 25.

13.  Trade and other receivables

	31 December 2014 US$'000	31 December  2013 US$'000
Trade and other receivables due after more than one year:
Receivables due from related parties	-	7,893
Other receivables	1,186	3,090
	------------------	-------------------
	1,186	10,983
	============	============
Trade and other receivable due within one year:
Trade receivables	2,433	1,410
Prepayments and accrued income	1,075	2,069
Other receivables	2,141	2,289
	-----------------	-----------------
	5,649	5,768
	===========	===========

Movement in allowance for doubtful debts

	Trade Receivables US$'000
At 31 December 2013	100
Remove discontinued	(31)
Provision made during the year	473
Released during the year	-
	---------------
At 31 December 2014	542
	=========

13.  Trade and other receivables (continued)

The ageing of trade receivables at the balance sheet date was:

	31 December 2014 US$'000		31 December 2013 US$'000
	Gross	Impairment	Gross	Impairment
Not past due	-	-	164	-
Past due (0-60 days)	2,975	(542)	1,111	(72)
More than 60 days	-	-	235	(28)
	------------------	------------------	------------------	------------------
	2,975	(542)	1,510	(100)
	============	============	============	============

The maximum exposure to credit risk for trade receivables by geographic region was:

	31 December 2014 US$'000	31 December  2013 US$'000
Tanzania	2,433	238
Angola	-	497
Ghana	-	211
South Africa	-	407
UK	-	57
	------------------	------------------
	2,433	1,410
	============	============

All amounts are short term.

The average period taken on trade receivables is 8 days (2013: 10 days). No interest is charged on receivables.

Other receivables mainly comprise deposits for crew, fuel, engineering and other suppliers.

14.  Inventories

	31 December 2014 US$'000	31 December  2013 US$'000
Aircraft spares and consumables	-	910
	============	============

15.  Trade and other payables

	31 December 2014 US$'000	31 December  2013 US$'000
Trade and other payables - non-current
Payables due to related parties	-	7,893
Other payables	2,118	2,259
	-------------------	-------------------
	2,118	10,152
	============	============

15.  Trade and other payables (continued)

Trade and other payables - current	31 December 2014 US$'000	31 December  2013 US$'000
Trade payables	4,445	13,396
Other taxation and social security	8,594	8,464
Other payables	83	1,586
Deferred income	2,302	1,730
Accruals	6,290	5,684
Maintenance reserves	-	4,865
	-------------------	-------------------
	21,714	35,725
	============	============

Non-current payables due to related parties at 31 December 2013 referred to loan balances with Five Forty Aviation Limited, the shares of which were held as an investment, written down to nil value at 31 December 2013 and disposed of in 2014. Other non-current payables refer to the net present value of liabilities under brand agreements.

16.  Cash and cash equivalents

	31 December 2014 US$'000	31 December 2013 US$'000
Bank balances	6,655	7,580
	---------------------	---------------------
Cash and cash equivalents in the consolidated balance sheet	6,655	7,580
Bank overdrafts used for cash management purposes	-	(3,870)
Cash and cash equivalents in disposal groups	59	-
	---------------------	---------------------
Cash and cash equivalents in the statement of cash flows	6,714	3,710
	=================	=================

17.  Finance lease obligations

31 December 2014	Future minimum lease payments US$'000	Interest US$'000	Present value of future  lease payments  US$'000
Less than one year	183	-	183
Two to five years	-	-	-
More than five years	-	-	-
	-----------------	-----------------	-----------------
Total	183	-	183
	=============	=============	=============

17.  Finance lease obligations (continued)

31 December 2013	Future minimum lease payments US$'000	Interest US$'000	Present value of future lease payments US$'000
Less than one year	5,218	1,689	3,529
Two to five years	25,591	4,300	21,291
More than five years	-	-	-
	-----------------	-----------------	-----------------
Total	30,809	5,989	24,820
	===========	===========	===========

Interest is payable on the leases at 7.1% to 7.5% per annum.             

18.  Share capital

	Number of  ordinary shares	Number of deferred shares	Number of  deferred shares	Share Capital	Share capital
	£0.01 each	£0.01 each	£0.09 each	GBP'000	US$'000
	'000	'000	'000
At 1 January 2013	1,848,944	9,313	-	18,582	29,284
Issued for cash	1,012,194	-	-	10,122	15,610
Issued in settlement of easyGroup liability	110,334	-	-	1,103	1,669
Exercise of share warrants	81,000	-	-	810	1,228
	-----------------	-----------------	------------------	-----------------	-----------------
	3,052,472	9,313	-	30,617	47,791
Consolidation and subdivision	(2,747,225)	-	305,247	-	-
After consolidation and subdivision	----------------- 305,247	----------------- 9,313	------------------ 305,247	----------------- 30,617	----------------- 47,791
Issued for cash	206,803	-	-	2,068	3,306
	---------------------	--------------------	---------------------	---------------------	--------------------
At 31 December 2013	512,050	9,313	305,247	32,685	51,097
	---------------------	--------------------	---------------------	---------------------	--------------------
Issued for cash	1,035,873	-	-	10,359	17,188
Issued in settlement of easyGroup liability	94,287	-	-	943	1,565
	---------------------	---------------------	---------------------	---------------------	---------------------
At 31 December 2014	1,642,210	9,313	305,247	43,987	69,850
	=================	=================	=================	=================	================

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

The deferred shares have no significant rights attached.

All issued shares are fully paid.

On 13 November 2012, the Company had entered into an equity financing facility ("EFF") with Darwin Strategic Limited ("Darwin"). The facility was replaced on 14 June 2013 and extended on 12 March 2014 from £15m to £25m. The facility was terminated on 10 April 2014.

On 27 January 2014 37,735,850 new ordinary shares of 1p each were issued, fully paid, via a draw down on its EFF agreement with Darwin at an issue price of 2.65p per share.

18.  Share capital (continued)

On 26 February 2014 47,500,000 new ordinary shares were issued, fully paid, via a draw down on its EFF agreement with Darwin at an issue price of 2p per share.

On 25 March 2014 17,301,038 new ordinary shares were issued, fully paid, via a draw down on its EFF agreement with Darwin at an issue price of 1.734p per share.

On 14 April 2014 687,500,000 new ordinary shares were issued, fully paid, by way of a placement at 1.6p per share ("Placing Shares") with certain institutional and other investors.

On 15 April 2014, 94,287,227 new ordinary shares were issued, fully paid, at an equivalent of 1.6p per share in termination of an agreement with easyGroup Holdings Ltd for management consultancy services, see note 25.

On 13 May 2014 145,683,383 new ordinary shares were issued, fully paid, by way of an open offer at 1.6p per share ("Placing Shares") to existing shareholders.

On 13 May 2014 100,151,608 new ordinary shares were issued, fully paid, by way of a placement at 1.6p per share ("Placing Shares") with institutional investors.

19.  Subsidiaries

The Company holds ordinary shares in the following subsidiary companies. All subsidiaries are included in the consolidated financial statements.

Name	Country of Incorporation	Activity	% of Voting rights held
Fastjet Aviation Limited   (formerly Lonrho Aviation (B.V.I.) Limited)	British Virgin Islands	Aviation Holding	100%
Fastjet Air Limited   (formerly Lonrho Air (B.V.I.) Limited)	British Virgin Islands	Airline Services	100%
Fastjet Air Africa Limited   (formerly Lonrho Air Africa (B.V.I.) Limited)	British Virgin Islands	Airline Services	100%
Fly 540 Sociedade de Aviacao Civil S.A.	Angola	Airline Services	60%
540 Ghana Limited	Ghana	Airline Services	92.50%
Fastjet Airlines Limited   (formerly Fly 540 (T) Limited)	Tanzania	Airline Services	49%
Fastjet Air Two Limited   (formerly Lonrho Air (2) (B.V.I.) Limited)	British Virgin Islands	Airline Services	100%
Fastjet Air Three Limited   (formerly Lonrho Air (Three) (B.V.I.) Limited)	British Virgin Islands	Airline Services	100%
Fastjet Air Four Limited   (formerly Lonrho Air (4) Limited)	Mauritius	Leasing	100%
Fastjet Leasing PCC Limited	Guernsey	Leasing	100%
Fastjet Holdings (Guernsey) Limited	Guernsey	Holding Company	100%

Inclusion of all the subsidiaries of the Group would be excessive therefore only significant trading entities are shown above.

During the year the Group announced it has signed an agreement to enable Tanzanian participation in the ownership of fastjet Airlines Limited (fastjet Tanzania).

19.  Subsidiaries (continued)

On 15 May 2014, the unpaid share capital in the fastjet Tanzania business was forfeited which effectively increased the Group's holding to 100 per cent of the issued share capital. This led to a transfer of loss from non-controlling interests to the reserves attributable to equity holders of fastjet Plc.

fastjet Plc and fastjet Tanzania then entered into an agreement with Enterprise Growth Market Advisors Limited (EGMA) for the purpose of selling an interest in fastjet Tanzania to Tanzanian investors. As part of that agreement, fastjet Tanzania issued 835 shares in its share capital (the Tanzania Shares) to fastjet International Limited, a company incorporated in Tanzania (fastjet Holdco), which is in turn is owned by four Tanzanian nationals (the Tanzania Shareholders). fastjet Tanzania also issued a further 17 shares in fastjet Tanzania to each of Ami Mpungwe and Lawrence Masha, the two Tanzanian Non-Executive Directors of fastjet Tanzania, being 34 shares in total and representing 2 per cent of its enlarged share capital. The issue of these shares, which were issued nil paid, brings the total Tanzanian legal ownership of fastjet Tanzania to 51 per cent.

Under the terms of the arrangement, the Tanzania Shareholders have agreed to sell their interest in fastjet Holdco and/or fastjet Tanzania to such Tanzanian investors at such price and on such terms as may be specified by fastjet Plc. Each of the Tanzania Shares (and the shares held by them in fastjet Holdco) which has not been transferred by the Tanzanian Shareholder to a Subsequent Tanzanian Investor is at all times subject to a call option in favour of fastjet Plc for the sum of USD 0.01 for each of the Tanzania Shares.

As a consequence of these changes fastjet Tanzania is expected to benefit from entry into new markets and have greater access to more international African destinations through the various Bilateral Air Service Agreements to which Tanzania is a party.

Fastjet Airlines Limited is consolidated as a subsidiary in these financial statements. Although the group holds only 49 per cent of the voting rights in the entity, it controls its management, operations and distributions through the aforementioned call options and contractual agreements as well as its shareholding.

The shares in Fastjet Air Four Limited are held by an orphan trust registered in Mauritius. Whilst Fastjet Air Four Limited is not a subsidiary of Fastjet Aviation Limited it is managed under an agreement to which Fastjet Aviation Limited is a party. Under the management agreement, Fastjet Air Four Limited must meet its obligations under the financing arrangements and Fastjet Aviation Limited agrees to ensure that Fastjet Air Four Limited is in funds to meet its obligations. In addition, Fastjet Aviation Limited can terminate the agreement on 60 days' notice giving it an element of control of Fastjet Air Four Limited and its operation. For this reason the Group has consolidated its interest in that Company.                        

Exchange control procedures exist in Angola, which place restrictions on repatriation of cash to the Group.                                            

20.  Share based payments

The Company has issued various options and warrants. Share options have been issued to Directors as part of their remuneration and incentive packages, and also to easyGroup Holdings as part of the consideration for the brand licence agreement in 2012. Warrants have been issued to WH Ireland as part consideration of their fees in respect of share placings.

The terms and conditions related to the grants of the share options are as follows; all options are to be settled by physical delivery of shares.

20.  Share based payments (continued)

Grant date	Number of options granted	Vesting conditions	Contractual life of options
Options granted to Directors
On 13 June 2012	600,000	Completing reverse take over	13.06.12 to 13.06.22
On 13 June 2012	8,000,000	20 million passengers in proceeding 12 months	13.06.12 to 13.06.17
On 27 July 2012	2,000,000	20 million passengers in proceeding 12 months	27.07.12 to 27.07.17
On 27 July 2012	500,000	6 million passengers in proceeding 12 months	27.07.12 to 27.07.17
On 27 July 2012	500,000	12 countries under fastjet brand	27.07.12 to 27.07.17
On 27 July 2012	500,000	US$10m EBITDA in proceeding 12 months	27.07.12 to 27.07.17
On 27 July 2012	500,000	Volume weighted average ordinary share price is greater than 60p for 60 day period	27.07.12 to 27.07.17
Options granted for the Brand License on 2 August 2012	20,739,545	None	02.08.12 to 02.08.16

                   In accordance with IFRS 2 "Share based payments" share options granted or re-priced during the period have been measured at fair value. The fair value of the options granted has been estimated at the date of grant using the Black-Scholes option pricing model.

The number of options has been adjusted following the share consolidation on 22 August 2013.

	Date of grant
	13 June 2012	27 July 2012	2 August 2012
Share price (Adjusted)	30.5p	39.8p	39.8p
Exercise price (Adjusted)	50p	50p	50.2p
Expected volatility	50%	50%	50%
Expected life	2.5 years	5 years	2 years
Expected dividends	0	0	0
Risk-free interest rate	2%	2%	2%

                   The options granted on 13 June 2012 in respect of the completion of the reverse takeover have vested.

Expense recognised in the profit or loss

	Year ended 31 December 2014 US$'000	Year ended 31 December 2013 US$'000
Total expense recognised for equity-settled share based payments	565	548
	============	============

20.  Share based payments (continued)

                   Reconciliation of outstanding share options

The number and weighted average prices of shares/options are as follows:

	Year ended 31 December 2014
	Number of warrants	Weighted average exercise price	Number of options	Weighted average exercise price
Outstanding at beginning and end of the year	16,682,710	45.0p	33,377,045	50.5p

	Year ended 31 December 2013
	Number of warrants	Weighted average exercise price	Number of options	Weighted average exercise price
Outstanding at beginning of the year	2,204,932	44.2p	33,377,045	50.5p
Granted during the year	22,577,778	33.4p	-	-
Exercised during the year	(8,100,000)	12.5p	-	-
Lapsed during the year	-	-	-	-
Outstanding at end of the year	16,682,710	45.0p	33,377,045	50.5p

Options and average prices have been adjusted following the share consolidation on 22 August 2013.

The share options outstanding at 31 December 2014 have an exercise price in the range of 10p - 60p (2013: 10p to 60p) and a weighted averaged contractual life of 3.2 years (2013: 4.2 years).

21.  Financial instruments

The Group's principal financial instruments comprise equity shares, cash and cash equivalents, finance leases and borrowings. The purpose of these financial instruments is to finance the Group's operations. The Group has other financial assets and liabilities that arise directly from its operations, such as trade and other receivables and payables.

The Group does not enter into derivative transactions such as forward foreign currency contracts.

The main risks arising from the Group's financial instruments are currency risk, liquidity risk and credit risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below.

Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Group's and Company's short, medium and long term funding and liquidity management requirements. The Group and Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

Market risk management

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments.

The objective of market risk management is to manage and control market risk exposures within acceptable parameters, whilst optimising the return.

21.  Financial instruments (continued)

Foreign currency exchange risk management

The Group operates in several African currencies and so is exposed to some exchange rate risk. There is a fair degree of natural hedging in that the operating subsidiaries largely generate revenues and costs in the same currencies. Further exchange exposure arises from the Group's financing (in particular share issues) being largely denominated in Sterling.

Fuel price risk management

Aviation fuel is purchased on the open market from recognised global suppliers. However aviation fuel prices are highly volatile. At this time the Group has not entered into forward fuel price contracts but will do so when appropriate.

Interest rate risk management

All group debt is at fixed rates of interest. Operating lease rentals are at fixed rates of interest.

Credit risk management

The Group's credit risk is limited because it is not exposed to a high level of trade or other receivables, in large part because customers typically pay for flights prior to departure. Credit risk in relation to cash and cash equivalents is managed by the use of various banks, all of which are considered to be of high credit worthiness. The doubtful debt provision disclosed in note 13 is in relation to travel agents in Tanzania.

Capital management

The Board's policy for the Group and Company is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future developments of the business.

The Group's objectives when managing capital are:

·    to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and

·    to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

The Group sets the level of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.

During the year and subsequently the Group has utilised equity financing facilities and share placements.

22. 

21.  Financial instruments (continued)

Carrying value and fair value of financial assets and liabilities

The fair value of financial assets and liabilities, together with their carrying value at each reporting date are as follows: 

At 31 December 2014

	Amortised cost loans and receivables US$'000	Amortised cost financial liabilities US$'000	Other (see note) US$'000	Carrying value US$'000	Fair value US$'000
Trade and other receivables	5,779	-	1,056	6,835	6,835
Cash and cash equivalents	6,655	-	-	6,655	6,655
Obligations under finance leases	-	(183)	-	(183)	(183)
Trade and other payables	-	(21,530)	(2,302)	(23,832)	(23,832)

Assets and liabilities held for sale

Assets and liabilities in disposal groups classified as held for sale at 31 December 2014 are disclosed in note 3.

They are all carried at their fair values, being the Directors' estimates of their value in sale. The hierarchy of estimation used in arriving at their fair values is also disclosed.

At 31 December 2013

	Amortised cost loans and receivables US$'000	Amortised cost financial liabilities US$'000	Other (see note) US$'000	Carrying value US$'000	Fair value US$'000
Other investments	-	-	-	-	-
Trade and other receivables	15,676	-	1,075	16,751	16,751
Cash and cash equivalents	7,580	-	-	7,580	7,580
Obligations under finance leases	-	(24,820)	-	(24,820)	(24,820)
Trade and other payables	-	(44,147)	(1,730)	(45,877)	(45,877)
Borrowings	-	-	-	-	-
Bank overdraft	-	(3,870)	-	(3,870)	(3,870)

                   Note: Amounts included in the "other" column are not "financial instruments" but are included to facilitate reconciliation of the carrying value of financial instruments with the statement of financial position

21.  Financial instruments (continued)

Liquidity risk

                   The following are the contractual maturities of financial liabilities including estimated interest payments and including the effects of netting agreements:

At 31 December 2014

	Carrying amount US$'000	Contractual cash flows US$'000	One year or less US$'000	One to two years US$'000	Two to five years US$'000	Five years and over US$'000
Obligations under finance leases	183	183	183	-	-	-
Trade payables	4,445	4,445	4,445	-	-	-
Other payables	13,097	14,273	11,065	500	1,500	1,208
	-----------------	-----------------	-----------------	-----------------	-----------------	-----------------
Total	17,725	18,901	15,693	500	1,500	1,208

At 31 December 2013

	Carrying amount US$'000	Contractual cash flows US$'000	One year or less US$'000	One to two years US$'000	Two to five years US$'000	Five years and over US$'000
Obligations under finance leases	24,820	30,809	5,218	4,027	21,564	-
Trade payables	13,396	13,396	13,396	-	-	-
Other payables	14,039	15,534	11,826	500	1,500	1,708
Payables due to related parties	7,893	7,893	-	-	-	7,893
Bank overdrafts	3,870	3,870	3,870	-	-	-
	-----------------	-----------------	-----------------	-----------------	-----------------	-----------------
Total	64,018	71,502	34,310	4,527	23,064	9,601
	===========	===========	===========	===========	===========	============

                   Interest rate risk

                   The interest profile of financial liabilities was as follows:

At 31 December 2014

	Loans and borrowings	Finance Leases	Overdraft	Other financial liabilities	Total
	US$'000	US$'000	US$'000	US$'000	US$'000
Fixed interest	-	183	-	-	183
Variable interest	-	-	-	-	-
	----------------	----------------	----------------	----------------	----------------
	-	183	-	-	183
	===========	===========	===========	===========	===========

21.  Financial instruments (continued)

At 31 December 2013

	Loans and borrowings	Finance Leases	Overdraft	Other financial liabilities	Total
	US$'000	US$'000	US$'000	US$'000	US$'000
Fixed interest	-	24,820	-	-	24,820
Variable interest	-	-	3,870	-	3,870
	----------------	----------------	----------------	----------------	----------------
	-	24,820	3,870	-	28,690
	===========	===========	===========	===========	===========

The majority of the Group's financial liabilities are fixed interest, therefore the Group has little exposure to interest rate risk. If the interest rate charged on the variable rate overdrafts held by companies disclosed as part of discontinued operations holds were to increase by 1 per cent, the Group's loss before tax would increase by US$53,368. Conversely, if the rate were to drop by 1 per cent the loss before tax would decrease by US$53,368.

Currency risk

Details of the Group's exposure to currency risk is detailed below. The financial assets and liabilities by currency (converted into US$) are as follows:

At 31 December 2014	Monetary assets US$'000		Monetary liabilities US$'000
Sterling	4,249		1,685
US Dollars	5,364		7,252
Tanzanian Shilling	1,456		14,813
Zambian Kwacha	400		-
South African Rand	902		217
Euro	-		58
Other	14		64
	12,385		24,089

At 31 December 2013	Monetary assets US$'000		Monetary liabilities US$'000
Sterling	4,726		1,051
US Dollars	15,287		52,136
Tanzanian Shilling	1,431		9,009
Ghanaian Cedi	789		2,249
Angolan Kwanza	1,677		9,000
South African Rand	406		112
Euro	13		1,010
	24,329		74,567

No formal policies have been put in place in order to hedge the Group's activities from exposure to currency risk, but it is the Group's policy to ensure that individual Group entities enter into local transactions in their functional currency wherever possible. The Group considers this minimises any foreign exchange exposure. The Group and the Company's cash balances are maintained in a number of currencies, matched to the expected currency of outflows and this further reduces exposure to exchange risk.

21.  Financial instruments (continued)

The management regularly monitor the currency profile of the Group's cash balances, and obtains informal advice to ensure that the cash balances are held in currencies minimising the impact on the results and position of the Group from foreign exchange movements. Consequently the management do not consider that a Foreign Exchange sensitivity analysis is material to the results of the Group.

22.  Operating lease commitments

At the reporting date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due or follows:   

	Aircraft US$'000	Property US$'000	Total US$'000
At 31 December 2014
Less than one year	5,280	450	5,730
One to five years	11,785	433	12,218
More than five years	1,350	-	1,350
	18,415	883	19,298

	Aircraft US$'000	Property US$'000	Total US$'000
At 31 December 2013
Less than one year	9,680	737	10,417
One to five years	16,343	-	16,343
More than five years	-	-	-
	26,023	737	26,760

Fastjet Aviation Limited has given a guarantee in connection with two aircraft under operating leases operated by Fly 540 Sociedade de Aviacao Civil S.A.

23.  Prior year restatement

Further to note 1, and following discussions with the Conduct Committee of the Financial Reporting Council, the Group has this year restated its prior years financial results and position on the basis that the transaction between Rubicon Diversified Investments Plc (Rubicon) and Lonrho Plc (Lonrho) in 2012 constituted a reverse acquisition of Rubicon on the part of Lonrho, rather than a conventional acquisition of Lonrho's Fly 540 aviation arm on the part of Rubicon.

The fundamental difference in methodology used in accounting for a reverse acquisition rather than an acquisition is that the combined financial statements are deemed to be a continuation of the books of the legal acquiree (in this case the Fly 540 group) rather than a continuation of those of the legal acquirer (Rubicon).  The assets and liabilities of the Fly 540 group are carried forward at book value, rather than being adjusted to their fair values, and no goodwill arises in relation to them.  The opposite is true in relation to the assets of Rubicon, which are consolidated at their fair values, with goodwill being calculated as the excess of deemed consideration over the fair value of Rubicon's net assets.

Under acquisition accounting the net assets of the Group were previously reported as US$44.7m at 31 December 2012, whereas under reverse acquisition accounting they become US$7.6m.  At 31 December 2013 the net assets of the Group under acquisition accounting were previously reported as US$4.7m, whereas under reverse acquisition accounting they become net liabilities of US$(6.7m).  The loss attributable to owners of fastjet in 2013 was originally disclosed under acquisition accounting as US$(74.4)m, whereas as restated under reverse acquisition accounting it has become a loss of  US$(48.6)m.

The original and restated balance sheets for 31 December 2012 and 31 December 2013, and the differences between them, are shown below.

23.  Prior year restatement (continued)

Consolidated balance sheet at 31 December 2012
	As restated US$'000	As published US$'000	Differences US$'000
Non-current assets
Goodwill	-	18,754	(18,754)
Other intangible assets	16,529	23,308	(6,779)
Property, plant and equipment	37,903	37,903	-
Investments	6,152	19,248	(13,096)
Other non-current trade and other receivables	7,177	7,177	-
	67,761	106,390	(38,629)
Current assets
Inventories	763	783	(20)
Cash and cash equivalents	7,488	7,488	-
Trade and other receivables	8,439	8,439	-
	16,690	16,710	(20)
Total assets	84,451	123,100	(38,649)
Equity
Called up equity share capital	29,284	29,284	-
Share premium account	80,986	80,986	-
Reverse acquisition reserve	11,906	-	11,906
Exchange translation reserve	516	516	-
Retained earnings	(99,148)	(50,140)	(49,008)
Equity attributable to shareholders of the Parent Company	23,544	60,646	(37,102)
Non-controlling interests	(15,991)	(15,991)	-
Total equity	7,553	44,655	(37,102)
Liabilities
Non-current liabilities
Obligations under finance leases	23,633	23,633	-
Deferred tax	-	1,547	(1,547)
Trade and other payables	10,558	10,558	-
	34,191	35,738	(1,547)
Current liabilities
Bank overdrafts	2,018	2,018	-
Loans and borrowings	1,998	1,998	-
Obligations under finance leases	3,226	3,226	-
Trade and other payables	35,397	35,397	-
Other financial liabilities	68	68	-
	42,707	42,707	-
Total liabilities	76,898	78,445	(1,547)
Total liabilities and equity	84,451	123,100	(38,649)

23.  Prior year restatement (continued)

Consolidated balance sheet at 31 December 2013
	As restated US$'000	As published US$'000	Differences US$'000
Non-current assets
Goodwill	-	11,324	(11,324)
Other intangible assets	12,408	12,515	(107)
Property, plant and equipment	30,246	30,246	-
Other non-current trade and other receivables	10,983	10,981	2
	53,637	65,066	(11,429)
Current assets
Inventories	910	931	(21)
Cash and cash equivalents	7,580	7,580	-
Trade and other receivables	5,768	5,768	-
	14,258	14,279	(21)
Total assets	67,895	79,345	(11,450)
Equity
Called up equity share capital	51,097	51,097	-
Share premium account	97,392	97,392	-
Reverse acquisition reserve	11,906	-	11,906
Retained earnings	(147,239)	(123,962)	(23,277)
Exchange translation reserve	2,674	2,674	-
Equity attributable to shareholders of the Parent Company	15,830	27,201	(11,371)
Non-controlling interests	(22,502)	(22,503)	1
Total equity	(6,672)	4,698	(11,370)
Liabilities
Non-current liabilities
Deferred tax	-	80	(80)
Obligations under finance leases	21,291	21,291	-
Trade and other payables	10,152	10,152	-
	31,443	31,523	(80)
Current liabilities
Bank overdrafts	3,870	3,870	-
Obligations under finance leases	3,529	3,529	-
Trade and other payables	35,725	35,725	-
	43,124	43,124	-
Total liabilities	74,567	74,647	(80)
Total liabilities and equity	67,895	79,345	(11,450)

The consolidated income statement for 2013 is presented below in original and restated form showing differences. The Income Statement shown for 2013 below is as originally published, and does not reflect the changes in presentation caused by the transfer of the Angolan and Ghanaian operations and their associated assets to discontinued operations.

23.  Prior year restatement (continued)

Consolidated income statement for the year ended 31 December 2013
	As Restated	As Published	Differences
	US$'000	US$'000	US$'000
Revenue	53,422	53,422	-
Operating costs	(105,302)	(132,501)	27,199
Group operating loss	(51,880)	(79,079)	27,199
Operating loss before exceptionals	(45,702)	(47,567)	1,865
Impairment of goodwill	-	(7,235)	7,235
Impairment of intangibles	(3,078)	(8,081)	5,003
Impairment of aircraft	(4,259)	(4,259)	-
Impairment of investments	(6,152)	(19,248)	13,096
Reversal of impairment of receivables due from related parties	7,311	7,311	-
Operating loss after exceptionals	(51,880)	(79,079)	27,199
Finance charges	(3,272)	(3,272)	-
Loss before tax	(55,152)	(82,351)	27,199
Tax credit (charge)	-	1,467	(1,467)
Loss for the year	(55,152)	(80,884)	25,732
Attributable to:
Shareholders of the parent company	(48,641)	(74,372)	25,731
Non-controlling interests	(6,511)	(6,512)	1
	(55,152)	(80,884)	25,732
Loss per share (basic and diluted) (US cents)	(16.07)	(24.56)	8.49

24.  Contingent liabilities

No contingent liabilities existed at 31 December 2014. At 31 December 2013 a contingent liability existed in relation to a guarantee given to Chase Bank by Fastjet Air Limited to the value of US$5m in connection with overdraft facilities granted to Five Forty Aviation Limited. This guarantee was released on 24 June 2014 as a consequence of the sale of Fly 540 Aviation Limited on 24 June 2014, further details of which are disclosed in note 12.

25.  Related parties

The Group has related party relationships with its subsidiaries (see note 19).

The Company licences the fastjet brand from easyGroup Holdings Limited ("easyGroup"), an entity in which Sir Stelios Haji-Ioannou holds a beneficial interest, which held 9.89 per cent of the issued share capital of the Company at 24 April 2015.

The brand licence with easyGroup dated 3 May 2012 provides for an annual royalty of 0.5 per cent of total revenue to be paid for 10 years.

25.  Related parties (continued)

The brand licence requires a minimum royalty payment to be paid of $500,000 per annum indexed annually in accordance with US CPI. The present value of the minimum royalty payments was capitalised as a component of brand licence costs.

The brand license also provided for fees for management assistance for aviation advisory services of Euro 600,000 per annum, indexed annually in accordance with French CPI. This agreement was terminated on 15 April 2014 in exchange for the issue of 94,287,227 Ordinary Shares in the Company, with a value of approximately £1.51m (US$2.50m) at the date of issue.

The amounts payable to easyGroup for the period were US$0.72m (2013: US$1.68m).

At the year end the outstanding liability to easyGroup was US$nil (2013: US$43,000).

Transactions with subsidiaries

Transactions with Group companies have been eliminated on consolidation and are not disclosed in this note.

Trading with other related parties

On 24 June 2014 the Company disposed of its investment in Fly 540 Kenya for a nominal sum. All legal and financial ties between the two companies have been dissolved and each group has indemnified the other against any and all liabilities relating to the segregation of the businesses.

The agreement wholly removes Fly 540 Kenya from the fastjet group. There were no material transactions with Five Forty Aviation Limited in the period prior to divestment.

The Company's investment in Fly 540 Kenya had been written down to zero in the 2013 financial statements. The 2013 financial statements also included a credit of US$7.9m in relation to the write back of a provision against amounts owing from Fly 540 Kenya.

The disposal constituted a related party transaction under the AIM Rules as the counterparty is a director of Fly 540 Kenya. 

Transactions with key management personnel

Key management personnel are considered to be the Company's Directors.

At the year end, a Director of the Company had an outstanding salary advance, which was subsequently repaid on 23 March 2015.

Details of Directors' remuneration are given in the Directors' Report.

26.  Events after the balance sheet date

Zimbabwean Air Service Permit issued

On 25 March 2015, the Group announced it received an Air Service Permit (ASP) from the Ministry of Transport and Infrastructural Development of the Government of Zimbabwe responsible for administering the Civil Aviation Authority of Zimbabwe (CAAZ). This represents a significant step towards the Company obtaining the Air Operating Certificate (AOC) required to launch fastjet Zimbabwe.

Fundraising

On 22 April 2015, 50,000,000 new ordinary shares of £1 each were issued at £1 per share via a placing to new and existing institutional, other investors and fastjet management, raising gross proceeds of £50 million.

Share consolidation

On 21 April 2015, the Company's existing ordinary shares of 1 pence each were consolidated into new ordinary shares on the basis of one new ordinary share of £1 each for every 100 existing ordinary shares held at 5pm on that date.

Appointment of new Non-Executive Director

On 12 May 2015, the Company announced the appointment of Bryan Alexander Coppin Collings as a Non-Executive Director.

Fleet expansion

On 18 May 2015 the Company signed a letter of intent with ICBC International Leasing Company Limited in respect of the leasing of one Airbus A319-131 aircraft, expected to be put into service in the third quarter of 2015, subject to entering into a lease agreement with certain conditions being met.

 

END

 

 

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