New financial troubles are emerging in the business empire of the billionaire who owns Britain’s fourth largest energy company, Ovo
New Financial Problems: Stephen Fitzpatrick
New financial problems have sprung up in the business empire of the billionaire who owns Britain’s fourth largest energy company, Ovo, The Mail on Sunday can reveal.
Auditors have warned that there is a “material uncertainty” that Stephen Fitzpatrick’s flying taxi company Vertical Aerospace can continue as a going concern unless it receives new capital.
Fitzpatrick supplies energy to 4.5 million households via Ovo. Vertical Aerospace, registered in the Cayman Islands and listed in New York, has incurred nearly £200 million in losses in just two years.
Ovo’s parent company, Imagination Industries, posted a profit of £377m in its final accounts for 2021, but posted £300m in losses for the previous three years.
Imagination’s finances have generated growing controversy in recent years. This newspaper revealed in 2022 that parent company Ovo has made £27 million in loans to its directors, while it has handed Vertical Aerospace nearly £10 million.
There is no suggestion that the loans were illegal or in violation of financial regulations, but the amounts were unusual.
Belfast-born Fitzpatrick, a former City trader, founded Ovo in 2009. The Sunday Times Rich List 2023 claimed him to be worth £2.2 billion.
His reported net worth has increased significantly over the past year as customers battled to pay skyrocketing gas and electric bills. Last winter, some Ovo customers were without heating, hot water and lighting in freezing temperatures.
Fitzpatrick, who once owned a Formula 1 team, recently bought the party venue Kensington Roof Gardens – formerly owned by Sir Richard Branson – and is spending millions of pounds on a luxury makeover.
He wants to turn it into an exclusive private members’ club. Vertical Aerospace has been likened to Elon Musk’s Tesla by chief technology officer Michael Cervenka, but the latest warnings cast doubt on the company’s future.
The company’s UK accounts, signed earlier this month, cover the 12 months ending December 2022. The auditors PwC said Vertical Aerospace “needs to raise additional capital” to secure its long-term future as it existence of a material uncertainty “may cast significant doubt on the company’s ability to continue its business operations.”
Vertical Aerospace’s accounts show that one of its four directors, Harry Holt, resigned after just one month last year. Holt was transferred from Rolls-Royce as chief operating officer.
The MoS may also reveal that CFO John Martin recently left the company, despite joining just four months ago.
Earlier this month, Vertical Aerospace reported escalating losses of £23 million for the first three months of 2023, compared to £18 million in the same period last year. The company has not yet developed a production facility and planning is still in the concept stage.
Vertical Aerospace received a grant of £14 million this year from the UK government-funded Aerospace Technology Institute.
Since floating in the US in 2021, it has seen its value drop from nearly £2bn to just over £300m.
A spokesperson for the company said: “Vertical is developing a five-seater all-electric aircraft and like any pioneering technology company, we expect to be loss-making at this stage.”