18th May 2012 07:00
JOHN MENZIES PLC
INTERIM MANAGEMENT STATEMENT
In advance of its Annual General Meeting today, John Menzies plc, is issuing an Interim Management Statement in accordance with its obligations under Section 4.3 of the Disclosure and Transparency Rules for the period from 1 January 2012 and is based on trading results for the four months ended 30 April 2012.
John Menzies plc has made a positive start to the year, trading in line with the Board's expectations.
Trading at Menzies Aviation is ahead of last year, excluding start up costs associated with contract gains.
In March this year, the division was awarded a five year contract by British Airways to handle some 19,500 flights per annum out of Manchester, Edinburgh and Glasgow. This new contract, together with gains from FlyBe announced previously, represent significant wins and reinforce our belief that our superior safety record and customer service is winning and retaining customers. Across the rest of our network, while some contracts were lost due to airline failure, net contract gain momentum has continued to be positive.
Our cargo forwarding business, AMI, which tends to do well during market downturns, is performing above expectations as it benefits from its strong buying power with airlines and its investment in new routes to market.
Overall, year to date like for like ground handling volumes are up 2% (absolute 5%) as the underlying business continued to perform well. Like for like cargo volumes declined by 7% but absolute volume was up 4% reflecting the annualisation of contracts won in the prior year.
Against a backdrop of global uncertainty, some of our markets remain challenging and currency impacts, particularly in Europe, are difficult to predict. However, our strategy of focussing on attractive airlines in attractive markets where we can grow our business together with financially stable, expanding airlines remains constant.
Menzies Distribution is trading ahead of last year after a positive first four months.
Monday to Friday newspaper revenues have continued to be positive driven by cover price growth, with weekend titles performing largely as expected. Overall magazine sales are broadly in line with our expectations although sales in the weekly magazine category continue to be disappointing. Year on year sales of Sticker collections are ahead following the release of stickers relating to Euro 2012.
The evolution of the branch network is on track with rationalisation plans in the Scottish central belt continuing and further changes proposed in Yorkshire and the East of England. Projected efficiencies following the implementation of SAP are being delivered and this, together with other cost saving initiatives leave the division well on track to deliver its targeted savings for the year.
Plans are in place for the logistical challenges that will be encountered during the London Olympics, but we expect that sales will receive a short term boost leading up to and for the duration of the Games.
John Menzies plc remains financially sound. There has been no material change to the Group's financial circumstances since the announcement of the Preliminary Results in March and we remain well placed to deliver sustainable earnings growth.
For further information:
Paul Dollman, Group Finance Director, John Menzies plc +44 131 459 8018
John Geddes, Group Company Secretary, John Menzies plc +44 131 459 8180
Jonathan Brill/Caroline Stewart, FTI Consulting +44 207 831 3113
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