PAUL Dollman, the long-standing finance director of airport services and distribution firm Menzies, is to leave the business which today revealed it will shut down its loss-making Chicago cargo handling operation after failing to find a buyer.
Dollman, 56, who joined the Edinburgh company in 2002, said ten years in the job was a “defining moment” for him. He said he aims to develop a portfolio career while there was “still a bit of life in the old dog yet”. He is expected to step down at the company’s agm in May.
He has been a key player in the development of Menzies, particularly the growth of its aviation side, since the company dispensed with the services of a chief executive in 2007. When the incumbent chief Patrick Macdonald left, Dollman continued to run the business alongside the two managing directors of the company’s separate operating divisions, aviation and distribution.
Dollman, a chartered accountant, said the company would recruit someone to a similar position to his and that the company’s unusual management structure would remain intact.
He denied that his departure was related to a lack of vigour in the performance of the company’s shares based on the growth of the aviation division. In 2011, analysts predicted its shares could be worth between 650p to 700p. In the last year they only just touched the bottom of the range, hitting 652p in April. Yesterday they closed down 7p at 626p.
But Dollman said: “We have had a pretty good run – certainly since 2008 when the shares were 43p. That has been pretty spectacular. The profits in the last three years have all gone the right way.
“The time is right, I feel I have done my bit.”
The closure of the group’s cargo handling operation in Chicago is expected to cost the firm £7 million in an exceptional charge, largely related to exiting the lease.
Dollman said the decision was taken as part of the company’s “fix, close, sell” policy, used whenever there were areas of the business that were struggling, but that market conditions meant the group could not find a buyer.
He said the Chicago hub – based at O’Hare International Airport – had continued to be loss-making since 2008 when cargo volumes in particular were hit by the onset of global recession.
In July Menzies Aviation announced plans to restructure its UK cargo business and close operations at four airports including Glasgow, Birmingham, East Midlands and Manchester and focus on London Heathrow.
In its update to the market, Menzies said the one-off restructuring bill for the full year was expected to be in the region of £18m, but that the earnings enhancements as a result would “leave the group in a stronger position with a more stable platform for growth”.
Non-executive director Ian Harrison will also retire at the agm after serving on the board since 1987.
Chairman Iain Napier said: “Paul has done an outstanding job for John Menzies over the last ten years and we wish him well for the future.
“He has been an integral part of the executive team and has played a key role in the success of the group. A full search process is under way.”
The company said it anticipates full year results to be “in line with its expectations” and debt at the year end to be reduced below £100m, although interest charges would increase by £2.5m this year due to accounting changes.