John Menzies plc Half Year Results for the Six Months Ended 30 June 2020

posted on 29th September 2020 by Eddie Saunders
John Menzies plc Half Year Results for the Six Months Ended 30 June 2020

Covid-19

Results reflect the severe impact of the Covid-19 pandemic, particularly on the ground handling and into-plane fuelling services, with the European business most significantly affected

Menzies has acted decisively in facing the challenges caused to the aviation industry by the Covid-19 pandemic through:

  • Reducing costs and preservation of cash – disciplined approach to capital expenditure and discretionary spend stopped
  • Moving to right size operations to match volume – including a significant reduction in headcount
  • Working with our customers – focusing on cash management and tight credit control
  • Focusing on the recovery and emerging stronger – becoming a leaner, more agile and more profitable business
  • Post period end, agreeing a revised banking covenant structure with our lenders

Financial

  • Revenue down 33% as a result of a 43% year on year decrease in passenger flight volumes
  • Revenue reduction partly offset by very significant cost management, together with the benefit from governmental support schemes to limit the underlying operating loss to £39.0m
  • Resilient cargo handling services and cargo forwarding business performance with stronger yields
  • Commercial progress and significant new business wins resulting in a net £27m annualised revenue added
  • Exceptional costs of £27.6m incurred to resize the cost base and deal with redundant assets
  • Underlying operating cash flow ahead of expectations with good debtor collections and upfront support from governmental agencies
  • Available cash resources of over £175m at 31 August 2020

Philipp Joeinig, Executive Chairman of John Menzies plc said:

The first six months of the year have seen us operate in unprecedented times due to the Covid-19 pandemic. The impact on our global operations has been material, but I am very pleased with how we have reacted. We acted decisively to reduce costs and moved to right-size our operations. As a result, our liquidity position is good, and we are well placed to navigate through the winter season and beyond. Due to the actions taken in 2019 to re-shape the business commercially, we are making real progress, winning new contracts, particularly in cargo, and I expect this to continue in the second half.