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John Menzies is slow to deliver as distribution arm fails to impress

Aviation sales climbed at the logistics group, but print media declines weighed on distribution
August 17, 2016

International trade, global travel and online shopping are good news for John Menzies (MNZS), but the Scottish logistics group has failed to take full advantage of the growth in these areas. Constant currency sales dipped in the first half of 2016, but aviation gains and strong sticker sales associated with the European football championships helped push underlying operating profits up 3 per cent to £21.1m.

IC TIP: Hold at 602p

The aviation segment has zeroed in on large customers, targeted growth markets and invested in complementary services to diversify its business. Constant currency sales climbed 5 per cent there as it benefited from higher ground handling volumes in continental Europe. It also struck a preliminary deal with Oman Air to provide ground handling services at nine Oman airports - its first meaningful foothold in the Middle East - and inked five-year contracts with British Airways and Iberia in Copenhagen and Virgin America in Los Angeles. But cargo volumes were down, partly due to a tough comparative against US seaport strikes.

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