John Menzies (MNZS) is in the middle of a strategic overhaul of its businesses, following a difficult 2014. The group has already started refocusing its aviation division on key customer accounts, particularly in the Americas. However, the group lost out on renewing its ground handling contracts at Spanish airports, resulting in a £4.7m impairment. There was better news for the group's management magazine and newspaper distribution business, as cost savings offset a decline in print sales. Management intends to build on this performance by focusing this arm on delivery services with national parcel carriers. After exceptional items, the group's underlying operating profit fell by 16 per cent to £20.2m during the first half.
Menzies' aviation business secured 49 new contracts, including passenger and ground handling services for United Airlines in Tucson, Cincinnati and Lubbock airports. Over 40 per cent of the division's activities is now in the Americas on behalf of its key clients, which include Delta Air Lines, WestJet and United Express. Volumes for its cargo handling operations grew by 8 per cent, driven by contract wins in Australia and New Zealand and new facilities in Canada. In distribution, the group continued with its branch rationalisation programme and opened its Wakefield superhub in June, serving 9,000 retailers. The same month the group acquired AJG Parcels, which handles more than 3m parcels in harder-to-reach parts of Scotland.
Broker Numis expects adjusted EPS of 41.9p this year, down from 49p in 2014.
JOHN MENZIES (MNZS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 475p | MARKET VALUE: | £293m | |
| TOUCH: | 474-475p | 12-MONTH HIGH: | 641p | LOW: 309p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 42 | |
| NET ASSET VALUE: | 123p* | NET DEBT: | 155% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 944 | 14.2 | 16.2 | 8.1 |
| 2015 | 954 | 5.8 | 4.7 | 5.0 |
| % change | +1 | -59 | -71 | -38 |
Ex-div: 22 Oct Payment: 20 Nov *Includes intangible assets of £110m, or 178p a share | ||||
