Belfast Telegraph

Company Report: Short Brothers plc

 

By John Simpson

Short Brothers plc trades as Bombardier Aerospace in Northern Ireland. To match the reporting conventions of its parent company, the registered accounts are reported in US dollars. The financial figures, have been converted to sterling using £1=$1.648 in 2014 and £1=$1.24 in 2015 and 2016.

The trading results for 2016 suggest a sterling equivalent decrease in turnover of 5% compared to 2015.

Interpreting the accounts of Short Brothers plc is more complicated than taking the headline figures as if Shorts was a free standing local company. First, the translation from $ to £ gives an approximation since the exchange rate changes can distort comparisons. Second, as a subsidiary of a much larger group, Bombardier, the accounting details are influenced by various inter-subsidiary accounting transactions.

In particular, the large impairment write down in 2015 dramatically affected the definition of operating and pre-tax profits. It is also reflected in the balance sheet value of shareholders equity. More recently, in 2016, the accounting for pension funds, outside the profit and loss account but affecting overall comprehensive income, shows recognition of a large potential actuarial loss of about £194m.

Excluding exceptional expenditure items and impairment write downs, reveals that a positive operating profit for Short Brothers continues and, in 2016, showed continuing progress. The company explains the improvement as consistent with being two years into a turnaround plan. The management objective is to secure further significant cost savings.

Bombardier, in 2014, announced an organisational restructuring in its global aerospace business. The Belfast operations are now located in a new Aerostructures and Engineering Services business segment.

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