John Menzies, the Edinburgh-headquartered aviation services group that operates in almost 40 countries, has told investors that it is making “good progress” against a turbulent trading environment.
In a stock market update, the firm – one of Scotland’s oldest companies, dating back to 1833 – said trading was “broadly in line” with its full-year expectations, while the board was looking forward to 2020 with “renewed confidence and optimism”.
It pointed to a year of “decisive actions” to combat the challenging trading environment, including a cost cutting programme that has provided at least £10 million of savings “with benefits delivered during the current year and into 2020”.
The firm told investors: “We have put the business back on the front foot with excellent customer engagement and this is now being evidenced with the majority of the substantial contracts due during the year renewed, significant new contract wins and a full pipeline of opportunities.”
Menzies also said its executive team had been strengthened and new structures put in place, adding: “We are now confident that we have a strong team, with significant industry experience, focused on driving the business forward.” Chief executive Giles Wilson said: “I am very pleased to see the tough management actions taken during the year are delivering benefits.
“This year has been about building for the future and I am confident that we have the team in place to drive the business forward. The improvements in our operational delivery, commercial activities and customer engagement have been key and I look forward to seeing the benefits of this come through as we progress.”
Half-year results for the six months to the end of June, released in August, showed that Menzies suffered a pre-tax loss of £4.4m, from a profit of £8.3m a year earlier. That was despite reported revenues rising to £649.9m.
The losses were blamed in part on cuts in flight schedules because of the global grounding of Boeing’s 737 MAX jets.
However, the group has announced a string of business wins and renewals over recent months including “significant” new contracts in Scandinavia.
The Menzies Aviation business operates at 219 airports in 37 countries, supported by a team of 36,000 people.
Shore Capital analyst Robin Speakman noted: “ has seen tough trading conditions for the aviation industry with all service providers facing stiff headwinds.
“We look forward to improved conditions, leveraging easier like-for-likes but also seeing a return to the positive impact of the secular growth drivers within the wider industry and in particular within aviation services.”