Menzies(John) PLC Trading Update (7240G)
November 24 2015 - 2:02AM
UK Regulatory
TIDMMNZS
RNS Number : 7240G
Menzies(John) PLC
24 November 2015
24 November 2015
John Menzies plc
Trading Update
John Menzies plc today provides a trading update for the 10
months from 1 January 2015 to 30 October 2015.
The outlook for Group full year earnings is now expected to be
some GBP2m below the Board's previous expectations.
Within the Aviation division, service levels at London Gatwick
have been restored. However, the actions we have put in place to
mitigate the operational issues and deliver the customer's
operational requirements will cost GBP6m of additional investment,
mainly in manpower, in the second half of the year, and will impact
this year's earnings. Contract negotiations with this customer
continue, and we are working towards a resolution before the year
end.
During the period we have seen strong earnings growth from our
US hubs. Outside the UK, all regions continue to perform well.
Ground handling turns and cargo tonnes were up 9% and 4%
respectively, with revenue in the period up 6% on last year.
Contract renewals remain strong, and we will continue to target new
business that will deliver sustainable earnings.
Our Distribution business is delivering ahead of forecast, with
the impact of print media declines expected to be fully mitigated
in this financial year. Cost management actions, including the
rationalisation of our network, will deliver over GBP5m of cost
savings in the full year, and sales volume reduction of 3.5% has
been slightly better than expected.
We have seen continued progress against our strategic goals with
new contract wins, including cross border e-commerce parcel
deliveries, as we build on the recent AJG Parcels acquisition which
has been successfully integrated.
The new National Living Wage legislation commences from April
2016, and mostly affects our Distribution business. The cost in
2016 is GBP2.5m, and we expect to mitigate this increase with a
number of improvement initiatives.
Looking more broadly at the Group's geographical investment and
service offerings, the Board will seek to accelerate a review of
the strategic options available, as we continue to build
operational excellence throughout the network and re-shape into
areas where higher shareholder returns can be sustained.
Overall, our balance sheet remains strong, supported by a
relentless focus on cash management actions.
Jeremy Stafford, Chief Executive of John Menzies plc,
commented:
"During a busy period of transition, we continue to progress
with the Group's strategic objectives. Our Distribution business is
quickly gaining traction in the UK e-logistics market, whilst
continuing to deliver cost and cash improvement initiatives.
Aviation continues to benefit from growth in the Americas, whilst
we continue to work through UK operational matters. I am
disappointed that contractual issues at London Gatwick have led us
to revise our aviation outlook for this year, albeit largely offset
with strong progress in our Distribution business. The Group
remains well placed to drive earnings."
For further information, please contact:
John Menzies plc
Jeremy Stafford, Chief Executive Officer
Paula Bell, Chief Financial Officer
John Geddes, Company Secretary +44 131 459 8018
FTI Consulting
Jonathon Brill
Alex Beagley
George Parker +44 203 727 1000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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