Cargo Handling

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.

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