Airline deals raise profit at Menzies
Shares at the company - which traces its roots back to 1833, when John Menzies opened a bookshop on Edinburgh's Princes Street - closed up 7.9 per cent or 40p at 545p.
Securing deals with the likes of China Airlines, Jetstream and Wizz Air has helped the outlook for the year to "improve" at the aviation business, which handles passengers and freight at airports around the world.
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Hide AdIn a short pre-close update ahead of next month's interim results, Menzies said that its distribution arm "continues to operate in challenging markets" but added that "management's proven track record of delivering cost savings continues to keep the division on track".
Following the upbeat trading statement, Mike Murphy - an analyst at house broker Numis - upgraded his full-year pre-tax profit forecasts by 3 per cent to 52.6 million for 2011, up from 45m in 2010.
Murphy added: "We believe the aviation business is worth a considerably-higher rating due to its growth prospects and lack of capital intensity and we retain our price target of 644p."
Brewin Dolphin analyst Jon Lienard added Menzies to the stockbroker's "conviction buy" list and upgraded its target price from 685p to 700p. Lienard added: "We expect aviation's profits in 2011 to exceed distribution's for the first time, which we consider a significant milestone in the group's development."