18th Aug 2015 06:41
LONDON (Alliance News) - John Menzies PLC on Tuesday posted a sharp fall in its first-half pretax profit, hit by restructuring costs in its aviation division, which offset a rise in volumes in the division and higher revenue for the group overall.
While the company said its distribution arm performed ahead of its expectations, it slashed its interim dividend as a result of the fall in overall profit.
John Menzies, which has an aviation division which provides passenger, ramp and cargo services and a distribution arm which provides overnight logistics services, said its pretax profit for the half was down to GBP5.8 million from GBP14.2 million a year earlier, driven by the group booking GBP11.2 million in restructuring costs in the aviation arm and contract losses it suffered in 2014. However, even stripping out the one-offs, pretax profit fell to GBP17.0 million from GBP20.7 million.
Revenue for the group was up to GBP1.00 billion from GBP992.6 million, pushed higher by an 8% rise in revenue in the aviation business and an above-expectations outcome in the distribution arm, along with progress made on the network rationalisation programme for the distribution business.
As a result of the decline in profit, the group said its interim dividend payout for the half will be cut to 5.0 pence from 8.1p a year earlier.
The group also reiterated that its profit will be heavily weighted to the second half due to the ongoing restructuring activities in its two operating divisions.
"Our transition plans are on track and progressing well although the first half of the year has been challenging as we continue to address the operational issues that arose during 2014," said Jeremy Stafford, the company's chief executive.
"In terms of group full year performance, as we previously highlighted, profits will have a greater second half weighting this year as we continue to transition the business. There is a great deal of potential across the business and we remain on track," Stafford added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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