Menzies flies into headwinds
Scottish distribution firm John Menzies saw revenues fall in the first half as the firm was hit by tough economic conditions and a weak euro.
Scottish distribution firm John Menzies saw revenues fall in the first half as the firm was hit by tough economic conditions and a weak euro.
Turnover fell to £988.4m from a just over a billion pounds the year before, but pre-tax profits rose slightly to £25.4m.
The company's cargo handling arm, Menzies Aviation, saw turnover increase by 2.3% to £340.2m with underlying operating profit up £0.7m to £14.5m.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The firm said this result reflected the effects of unfavourable foreign exchange movements.
It added that airline failures resulted in five airline customers ceasing to trade and would result in the loss of £7.7m of annualised revenue.
However, the company stressed net contract gains had offset some of this and the division was making steady progress.
Menzies Distribution, its traditional newspaper distribution service, produced an operating profit of £14.0m, up from £13.7m last year, but on turnover of £648.2m which fell by 3.7%.
The firm put this down to strong cover price growth with 12 titles increasing cover price during the period.
However, it was hit by the launch of the Sun on Sunday, which it said had a detrimental effect on the Sunday newspaper market as a whole as it had a lower cover price than The News of the World and had gained volume from other higher margin titles.
"The group has made a positive start to the second half and is trading in line with the board's expectations," its statement said.
"Global economic conditions and exchange rate movements, particularly the Euro, continue to provide challenges."
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
Christmas at Chatsworth: review of The Cavendish Hotel at Baslow
MoneyWeek Travel Matthew Partridge gets into the festive spirit at The Cavendish Hotel at Baslow and the Christmas market at Chatsworth
By Dr Matthew Partridge Published
-
Tycoon Truong My Lan on death row over world’s biggest bank fraud
Property tycoon Truong My Lan has been found guilty of a corruption scandal that dwarfs Malaysia’s 1MDB fraud and Sam Bankman-Fried’s crypto scam
By Jane Lewis Published