Regulatory Announcements
27 June 2006
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Trading Statement
John Menzies plc
Trading Statement
27 June 2006
John Menzies plc, the time-critical logistics company, today issues a trading update ahead of its interim results for the half year ending 1 July 2006, which will be announced on Tuesday 5 September 2006.
Trading performance across the Group remains in line with our expectations.
Menzies Distribution continues to experience weakness in the magazine and partworks markets, as anticipated. We are addressing these market challenges by investing in a lower-cost operational model incorporating further automation. Our recent acquisitions extending our network into North Wales and Preston have been well-received by our customers.
The Office of Fair Trading published its draft opinion on the newspaper and magazine distribution contracts on 31 May 2006. The consultation phase extends to September and the OFT's final opinion is expected in early 2007. Whatever the outcome, we aim to remain the service provider of choice for our publisher and retailer customers.
Menzies Aviation has continued its positive momentum with a healthy contracts pipeline, particularly in Spain, the UK and Australasia. The acquisition of Aeroground in the USA was completed successfully in May and the integration is going well. As previously announced, we expect this acquisition to be earnings enhancing this year. We have also signed two Indian joint venture agreements for cargo operations which are expected to come on stream in 2008.
Outlook
The Board believes that further progress will be achieved in the second half of the year and that trading for 2006 will be consistent with our expectations.
Commenting on trading, Patrick Macdonald, Chief Executive, said:
"The outlook for the Group remains encouraging. At Menzies Distribution, we are thoroughly overhauling our cost base, improving productivity and enhancing our service offering in order to address the ongoing changes in the market.
Menzies Aviation is achieving organic growth across its global network. We continue to seek out acquisition opportunities, both large and small, to complement and enhance this increasingly attractive growth business."
Contact:
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Investor Relations, John Menzies plc |
0131 459 8018 |
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Ginny Pulbrook/Kevin Smith/Ged Brumby, Citigate Dewe Rogerson |
020 7638 9571 |
NOTES TO EDITORS
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John Menzies plc, the time-critical logistics company, is one of Scotland's largest companies. The company has two operating divisions, Menzies Distribution and Menzies Aviation. Both divisions operate in distinct B2B sectors where success depends on providing an efficient, high quality, time-critical service to their customers and partners.
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In the year ended 31 December 2005, John Menzies reported turnover of £1,390.0m (2004 - £1,369.2m) and headline profit before tax of £39.4m (2004 - £33.6m). Turnover at the Distribution division was £1,104.3m (2004 - £1,109.4m) whilst operating profit was £30.7m (2004 - £30.5m). In the Aviation division turnover was £285.7m (2004 - £259.8m) and operating profit was £13.3m against £10.3m in 2004.
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The company was established in 1833 and its head office is in Edinburgh, Scotland. Today the company is an international operation with businesses in Europe, North and South America, South East Asia, Australasia and Africa.
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Menzies Distribution is a leading provider of added value distribution and marketing services to the newspaper and magazine supply chain in the UK. The division handles 4.5 million newspapers (6 million on Sundays) and 2.5 million magazines (covering 3,000 magazine titles) each day, with deliveries to more than 21,300 customers.
Its success in 2005 in achieving high standards is evidenced by winning the 'Wholesaler of the Year' award from the National Federation of Retail Newsagents and the Gold award at the Association of Circulation Executives awards. It also won the Orange Award for Bright Business at the National Business Awards for Scotland for its Launch Factory marketing initiative to maximise sales of new titles.
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Menzies Aviation is one of the world's major independent suppliers of ground handling services to the aviation market providing passenger, ramp and cargo services for many of the world's leading airlines and some of the busiest international airports. The division employs some 12,000 people across the world, at 98 airports in 23 countries servicing more than 500 aviation customers.
The Division won various awards in 2005, including the 'BA Way' award for the handler which most closely matches the way BA wants its outsourced handling performed and the 'Most Responsive Handler' award also from BA for the way in which it helped restart their operations at Houston after Hurricane Wilma.
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Further information on John Menzies plc can be found at: www.johnmenziesplc.com, www.menziesdistribution.com and www.menziesaviation.com.
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