Menzies profit falls in turbulent year

Edinburgh-based aviation logistics and news distribution company John Menzies said on Tuesday its reported pre-tax profit fell to £18.2 million in 2015 from £25.7 million the year before amid a turbulent period for the firm.

However, turnover in 2015 was £1.99 billion, roughly the same as 2014, and the company will pay a dividend of 16.8p per share compared to 16.2p in 2014. Earnings per share fell to 16.5p from 22.7p.

Menzies’ chief executive resigned in January 2016 and the company has been under pressure to split in two from some shareholders who believe its aviation services and distribution divisions would be worth more as separate businesses.

“We continue to evaluate the optimum structure for the group to potentially further enhance shareholder value,” said Iain Napier, chairman of John Menzies.

The company also said it will continue to look for acquisitions.

“2015 was a challenging year for the group with operational issues at London Gatwick suppressing profits,” said Napier.

“Outside of the UK, the aviation business continued to make progress, particularly in cargo handling and North American ground handling.

“Menzies Distribution performed strongly, whereby print media decline was fully mitigated and our expansion into the e-commerce fulfilment market gained real traction with the acquisitions of AJG Parcels and Oban Express, and a number of new contract wins.

“The board is confident that we have strategies available to us in both of our operating divisions capable of delivering growth. 

“We continue to evaluate the optimum structure for the group to potentially further enhance shareholder value.”

On January 13, 2016, Menzies said its chief executive Jeremy Stafford had resigned for personal reasons after 15 months in the job.

Menzies said on January 13 that Forsyth Black, previously managing director of Menzies Distribution, had been appointed managing director of Menzies Aviation and would join the board of the company.

Mark Cassie was appointed interim managing director of Menzies Distribution.

In its outlook for 2016, Menzies said: “Since the year end we have completed the acquisition of Renaissance Aviation, the sole provider of ground and cargo handling services to a number of international airlines in Bermuda and Thistle Couriers, an Aberdeen based same day parcel fulfilment business.

“The profile of recent new business wins and our improving pipeline in aviation indicates a greater second half weighting than usual.

“We continue to anticipate opportunities arising from the aviation services market in North America.

“In line with our strategy, we will pursue opportunities that drive additional revenue streams from complementary services.

“Across the business we will continue to seek both organic and acquisition opportunities as we look to build scale in our growth markets.

“We are well placed to benefit from future cost efficiencies as the rationalisation of our distribution network delivers to plan although the implementation of the UK national living wage will represent a challenge for the business.

“We will continue to pursue e-commerce opportunities to increase our footprint as a neutral consolidator in the growing parcel and fulfilment markets.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.