Shares of Edinburgh-based aviation logistics and news distribution company John Menzies rose more than 3% on Tuesday morning after it said turnover increased 21% to £1.2 billion for the six months to June 30 and it increased its dividend amid “confidence” for the rest of the year.
Menzies said on Monday it terminated merger talks between its distribution business and courier firm DX Group after being unable to agree revised terms for the deal.
On Tuesday, it said underlying profit before tax rose 36% to £24.7 million for the half year — but exceptional items relating to corporate transaction costs and “defined benefit pension de-risking” resulted in profit before tax falling to £500,000 from £3 million for the same period last year.
Nonetheless, interim dividend will be increased 11% to 6p per share.
Menzies chairman Dermot Smurfit said: “I am pleased to report that the group is trading well.
“Menzies Aviation continues to go from strength to strength.
“The recently acquired ASIG business is integrating well and generating many opportunities for growth.
“Within the rest of the business contract win momentum continued and we are benefiting from our investments into infrastructure and innovation.
“Menzies Distribution remains a strong business, performing well despite cost and volume pressures.
“Overall, I am very pleased with the group’s performance in the first half and we look to the future with confidence as demonstrated by the increased dividend payment.”
In his outlook, Smurfit said: “The group has continued to trade well since the period end and we look forward to the remainder of the year with confidence.
“We continue to look at our group structure with a view to delivering shareholder value by creating two strong pure play companies.
“Menzies Aviation has started the second half positively with continuing contract gains, expansion of our service offering, continued investment into infrastructure and a focus on delivering the exciting growth opportunities that exist.
“Menzies Distribution continues to seek new pathways to growth by investing into our diversified businesses, utilising our assets during daylight hours and within the core Newstrade business the division is well positioned ahead of the impending publisher contract renewals.
“Overall the board is confident with the group’s outlook for 2017 and we are firmly on track to meet the board’s expectations for the full year.”