13th Aug 2019 09:01
(Alliance News) - Aviation services firm John Menzies PLC on Tuesday blamed the grounding of Boeing Co's 737 MAX and weak cargo volumes for an interim loss.
John Menzies's pretax loss for the six months to June was GBP4.4 million, after a GBP8.3 million profit the year before. On an underlying basis, pretax profit was down 47% to GBP8.2 million.
The company did manage to increase revenue, by 3.6% to GBP649.9 million and has kept the interim payout flat at 6.0 pence a share.
John Menzies said the aviation sector has seen a decline in airline flight schedules and reduced cargo volumes, while the company has also been hurt by contract losses in the Dominican Republic and Panama.
The firm is now looking to deliver over GBP10 million of cost savings, most of which will be realised in 2020, with "decisive" action now taken to "right size" the business.
Chief Executive Giles Wilson said: "The first half result was impacted by the loss of exclusive licences in the second half of last year and generally weaker markets."
"To address this we have taken a number of decisive actions that we expect will improve second-half 2019 and underpin our growth ambitions in 2020."
"Looking forward, I continue to see clear opportunities to grow profitably. The structural dynamics of our markets remain strong in the medium and longer term," said CEO Wilson.
The first half was "stable" in the Americas segment, John Menzies said, but cargo volume fell in Europe, the Middle East, & Africa offset new contract wins in ground handling.
In the Rest of the World, John Menzies registered a growth in revenue, with a number of customer renewals signed. Performance in Sydney and Macau was particularly good, the company said.
Shares were 4.1% lower on Tuesday morning in London at a price of 397.94p each.
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