Thread by @JolyonMaugham

So how much did Government overpay? How much did Ayanda/Prospermill/Andrew Mills make? THREAD

The Ayanda contract was entered into on 29 April 2020 (source Govt letter to GLP of 29 July).

And Govt purchased 50m FFP2 masks and 150m IIR masks for a total price of £252m (source Govt letter to GLP of 29 July). /1

We have been shown parts of an internal Government document – I have seen it but you’ll have to take this on trust – which says that weekly average unit price (14 Apr – 28 May) for FFP2 masks was £2.38 (although on or about 29 April Govt paid as low as 50p for them). /2

The same internal Government document says that weekly average Unit Price 14 Apr – 28 May for IIR masks was £0.51.

(We have contemporaneous quotes for IIR masks on 29 April – in US$ - which suggest the internal Govt document pricing may have been a little on the high side.) /3

If you take those figures at face value 50m FFP2 x £2.38 (£119m) plus 150m IIR x 0.51 (£76.5m) = suggesting a profit of £56m for Prospermill Limited/Ayanda Capital Limited/Andrew Mills.

Nice work for a boxfresh £100 company. /4

But there are a number of reasons why, I believe, this figure understates - yes, understates - the profit Ayanda made. /5

First, the Government bought these masks in China and it had to pay the freight costs.

The fact that Ayanda was not paying to ship them to the UK means the ex Shanghai prices would have been lower than those in the Govt doc I mentioned (so higher profits for Ayanda). /6

FFP2 masks – a box of ten weighs 0.5kg. IIR masks – a box of 50 weighs 0.5kg.

So that’s a total weight of 50m/10x0.5kg (2.5m kg) plus 150m/50x0.5kg (1.5mkg) = 4m kg.

A 747 takes about 105,000 kgs so that’s 38 747s at roughly $0.85m each or another £25m saved for Ayanda. /7

Second, we were purchasing in huge volume. 50m represents our entire annual consumption of FFP2 masks at heightened pandemic levels. 150m is by any stretch a large order of IIR masks. You would expect Ayanda to have been able to secure a large volume discount. /8

Third, Ayanda delivered FFP2 masks that did not comply with the UK standard. They did not function safely as respirator masks because they had earloops.

Demand for non-compliant masks would have been considerably less (and so the price lower) than compliant FFP2 masks. /9

Impossible to know for sure what profit Ayanda - or Prospermill - or Mr and Mrs Mill made from a single deal to supply c. £160m worth of unusable masks to the NHS.

But on the basis of the above £50m (at public expense) is likely substantially to *understate* that profit. /ENDS