British Airways' decision to accelerate its move from Terminal One to Terminal Five at London Heathrow is giving John Menzies (MNZS) a headache. That and the opening of Terminal Two in June have unleashed "unprecedented operational upheaval", with 15 airlines switching suppliers. Management expects full-year earnings at the group's UK ground handling business to be much lower than last year.
News elsewhere was encouraging: John Menzies won a record 49 new aviation contracts in the first half, adding an extra £38.4m of revenue. But finance director Paula Bell says even more high-profile contract wins will be necessary to mitigate the "Heathrow effect" in the second half.
Meanwhile, the newspaper and magazine distribution business posted a solid first-half performance, helped in part by special World Cup editions and a lack of major title closures. Magazine sales, although down 5 per cent on a like-for-like basis, were better than expected. This also applied to newspaper sales, which fell just 1 per cent. Consolidation of the group's distribution branches continues: 6,000 retail customers in the South of England are now served out of a single unit in Maidstone.
Broker N+1 Singer reduced its pre-tax profit forecast by £2.5m to £48.1m for the current financial year, giving EPS of 57.2p (from £53.1m and 65.5p last year).
| JOHN MENZIES (MNZS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 621p | MARKET VALUE: | £381m | |
| TOUCH: | 621-628p | 12-MONTH HIGH: | 842p | LOW: 613p |
| DIVIDEND YIELD: | 4.3% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 136p* | NET DEBT: | 139% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 952 | 18.4 | 22.0 | 7.7 |
| 2014 | 944 | 14.2 | 16.2 | 8.1 |
| % change | -1 | -23 | -26 | +5 |
Ex-div: 22 Oct Payment: 21 Nov *Includes intangible assets of £122m, or 199p a share | ||||
