4th Mar 2014 11:26
LONDON (Alliance News) - John Menzies PLC Tuesday expressed confidence for its future by raising its dividend. Pretax profit rose in 2013, despite posting largely flat revenues, as exceptional costs in 2012 did not recur.
John Menzies posted a total dividend of 26.5 pence, up from 25.2 pence in the previous year.
The aviation services and print media distribution company posted a pretax profit of GBP42.1 million, up from GBP28.1 million, although revenue rose only slightly to GBP1.905 billion from GBP1.903 billion in the previous year.
In 2012, the company posted GBP18.4 million in exceptional costs, including GBP10.7 million in rationalising costs comprising of asset write-downs and staff redundancy costs and a GBP7.7 million onerous lease provision.
On an adjusted basis, removing exceptional costs, pretax profit fell to GBP53.1 million from GBP54.5 million.
The company is focusing on growing its Aviation division, as print media continues to decline. The company said it would continue to mitigate this drop by managing the cost structure supporting its print-media distribution network.
In its Aviation business, revenue rose to GBP722.8 million from GBP697.2 million in the previous year. In the division, Menzies won 92 new contracts, while losing 26 contracts. Headwinds from foreign exchange and competition in western European airports hampered the division's profit, Menzies said. The company acquired Skystar Airport Services, Desacol SA and Moose Aviation Services AB during the period.
In Distribution, the company saw revenue decline to GBP1.28 billion from GBP1.30 billion in the previous year, as print sales continued to slump. The company saw weak magazine sales as volumes fell and titles were closed. Due to the absence of a major football tournament, collectibles were behind the previous year. Menzies saw GBP5 million in cost savings in the segment during 2013.
Menzies has accelerated its branch rationalisation plans to address falling volumes in Distribution. They will now commence in the first half of 2014 and are expected to be completed in 2015.
It also will close a number of newspaper packing locations, and magazine packing will be centralised into a smaller number of locations. This will lead to rationalisation costs of around GBP5 million over the next two years, it said.
The company warned that conditions, particularly in its distribution business, were likely to remain challenging in 2014. It will continue to focus on cost management during the year.
"I am confident that the group is on a firm financial footing, and we are well placed to grow our business while delivering returns for our shareholders," said Chairman Ian Napier in a statement.
Shares in John Menzies were trading down 0.5% at 656.50 pence Tuesday morning. Numis raised John Menzies to Add from Hold on Tuesday, with a price target of 761 pence, down from 774 pence previously.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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