John Menzies Plc – parent company of Menzies Aviation – warned today that its performance in the first half of the year was “disappointing” and “below expectations” and said results for the full-year are set to be down on last year.
Menzies said it reflected the challenges that the wider aviation market is currently facing driven in part by weak cargo volumes and flight schedule reductions.
The trading update was given ahead of the UK aviation service firm’s interim results announcement on 13 August 2019.
Menzies has been implementing several actions including a cost rationalisation programme that will deliver at least £10 million of cost savings, the majority of which will materialise in 2020, a revitalisation of its commercial offering and a greater focus on returns from the deployment of systems.
Overall, Menzies said its board believes the medium and long term fundamentals of, and prospects for, the business are “sound” and remain confident that the actions being taken in the current year underpin the board’s expectations for 2020.
John Menzies Plc chief executive officer, Giles Wilson, who took over earlier this year, said: “The overall aviation market is having a difficult year. This inevitably is having an impact on our full year outturn. However, I firmly believe in the structural growth dynamics within our industry and all historical data points to recovery.”
He added: “Accordingly, I believe we remain well placed to prosper. Since my appointment I have taken a number of actions to right size the business, we have also restructured our commercial teams to ensure we are ready to seize opportunities as they present themselves. We have a great, motivated team and I look forward with confidence.”
Menzies Aviation is considering strategic and structural options and has appointed Swiss private equity fund manager Christian Kappelhoff-Wulff to its board.
Menzies operates at 219 airports in 37 countries, and each year serves some 1,000 customers, handling 1.4 million flights, 1.6 million tonnes of cargo and fuelling four million turnarounds.