Menzies to raise £22m amid ‘encouraging’ trading

John Menzies plc, the Edinburgh-based global aviation services business, announced on Tuesday its intention to raise £22 million via a sale of shares.

The firm said the proceeds from the fundraise will allow the group to “take advantage of current market conditions to accelerate the delivery of our strategic objectives while also maintaining our commitment to reduce leverage.”

John Menzies also provided an update to say group trading has been “encouraging” in the year to date.

“John Menzies plc … announces its intention to raise approximately £22 million through a combination of a non-pre-emptive placing, a subscription by directors and senior managers of the group and/or persons closely associated with such directors for approximately £5.3 million and an offer made on the PrimaryBid platform of new ordinary shares of up to £1 million …

“It is intended that the placing, the subscription and the retail 0ffer will result in the company raising gross proceeds of approximately £22 million, representing c.8 per cent. of the company’s existing issued share capital.

“In aggregate, the total number of placing shares, subscription shares and retail shares to be issued will not exceed 10.0 per cent. of the current issued share capital of the company.”

In its trading update, Menzies said: “Overall, group trading has been encouraging in the year to date, with underlying profitability ahead of previous management expectations.

“With passenger flight volumes remaining below 2019 levels across the group, this strong performance is testament to the cost savings programme delivered by the management team in 2019 and 2020, the ongoing contribution from governmental support schemes and the continued new business success being generated by the company’s enhanced commercial focus.

“As a result of this and with encouraging signs of airlines rebuilding flight schedules, the board is confident that this momentum leaves the company well placed to meet or exceed management’s underlying profit expectations for 2021 …

“Alongside the solid trading performance, the group’s financial and liquidity position continues to be robust.

“As at 31 March 2021, net debt was £218m on a pre-IFRS 16, covenant basis, and total liquidity stood at £126m, with significant headroom against a covenanted level of £45m.

“Whilst there remains uncertainty associated with the pandemic, the board currently expects net debt to continue to track in line with management’s expectations over the remainder of the year with liquidity remaining well in excess of £100m, in each case before taking into account the effects of the of the proposed non-pre-emptive fundraising separately announced by the company today.

“Moreover, utilisation of the proceeds from the fundraise will further enhance the ability of the group to operate within its original interest cover covenant when this is reinstated at 30 June 2022.”

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