24th Nov 2015 09:15
LONDON (Alliance News) - John Menzies PLC on Tuesday said its full-year earnings are set to miss its previous expectations by around GBP2.0 million after the actions it had to take to mitigate issues in its aviation arm.
John Menzies has an aviation division which provides passenger, ramp and cargo services and a distribution arm which provides overnight logistics services. It said service levels at its Gatwick operations have been restored, but the actions taken to mitigate operational issues in the business resulted in a GBP6.0 million further investment, which will hit its earnings for this year.
Outside the UK, the rest of John Menzies's aviation business performed well, with good growth from its US hubs.
The company add its distribution business has traded ahead of its expectations, albeit with sales volumes down 3.5%, as cost savings actions took around GBP5.0 million in a year of expenses out of the business.
John Menzies expects the National Living Wage in the UK to result in a GBP2.5 million additional wage cost for 2016, though it expects to mitigate this through cost savings.
"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, said Chief Executive Jeremy Stafford.
John Menzies shares were down 4.4% to 366.76 pence on Tuesday morning.
By Sam Unsted; [email protected]; @SamUAtAlliance
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