With a profit warning in July sending shares plummeting by almost a fifth, investors were probably already prepared for disappointment ahead of John Menzies’ (MNZS) half-year results. Hindered by the previously flagged lower cargo volumes and the grounding of Boeing’s 737 Max aircraft further depressing expected airline flight schedules, operating profit plunged by 62 per cent to £5.4m in the six months to 30 June.
The earnings decline also reflects the loss of exclusive licences in the Dominican Republic and Panama in the second half of 2018. Although flight seasonality means trading is normally weighted towards the latter half of the year, these combined factors dampened first-half earnings more than expected – management was anticipating a flat year-on-year performance. The group is hoping that previously announced measures can “right size the business”, pointing again to the efficiency programme that aims to deliver at least £10m of annualised savings by 2020.
Peel Hunt expects adjusted pre-tax profit of £41.4m and EPS of 34.9p for the full year, rising to £54.4m and 45.8p in 2020.
| JOHN MENZIES (MNZS) | ||||
| ORD PRICE: | 400p | MARKET VALUE: | £ 337m | |
| TOUCH: | 400-402p | 12-MONTH HIGH: | 650p | LOW: 354p |
| DIVIDEND YIELD: | 5.1% | PE RATIO: | 190 | |
| NET ASSET VALUE: | 106p* | NET DEBT: | £422m** | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 627 | 8.3 | 6.7 | 6.0 |
| 2019 | 650 | -4.4 | -5.8 | 6.0 |
| % change | +4 | - | - | - |
| Ex-div: | 17 Oct | |||
| Payment: | 15 Nov | |||
| *Includes intangible assets of £175m or 208p a share, **Includes £216m of lease liabilities | ||||
