The Edinburgh-headquartered firm saw revenue slide slightly to £415.8 million on a reported basis in the period ending June 30 from £431.5m 12 months previously, on the back of a gradual recovery in ground and fuel services volumes following a rapid fall at the start of pandemic in the second quarter of last year.
Pre-tax profit came in at £4.7m, in contrast with a loss before tax of £80.1m in the first half of 2020 – with basic earnings per share 2.8p, from a basic loss per share of 104.7p.
Underlying operating profit amounted to £21.6m from a loss of £39m, with Menzies saying the operating profitability turnaround (excluding governmental support) was £30m stronger on similar revenue.
The business – one of the oldest in Scotland – added that the improvement “demonstrates the benefit of management actions” such as restructuring, cost actions, and new business wins plus governmental support.
It also highlighted its £22m equity raise to fund business-development and its deal pipeline. The group in mid-June announced that it had pushed into the vast Chinese cargo market following a multi-million-pound investment. Earlier this month, it said it had agreed to acquire a majority 51 per cent stake in Interexpresso Costa Rica.
Looking ahead, the Scottish firm’s board remains optimistic regarding the long-term outlook, adding that air cargo services and cargo forwarding across all regions continue to be more resilient, with strong volumes and record high yields, although ground services and fuelling business will take some time to regain altitude.
All in all, positive momentum is currently expected to continue in the second half and into 2022, and Menzies’ current pipeline of investment opportunities includes ventures in “all product categories and regions”, with more announcements expected by the end of 2021.
Chairman and chief executive Philipp Joeinig said: “I am pleased that we have delivered a strong first half despite the continuing impact of Covid-19 on travel. We are committed to delivering against our strategic priorities and are making good progress.
"We continue to win contracts, enter new markets and optimise the mix of our business portfolio. Furthermore, we are confident that our resilient business model leaves us well placed to prosper as flight volumes continue to recover.”
Analyst Robin Speakman of Shore Capital, which works with Menzies, said the firm “continues to demonstrate resilience in the face of continuing pandemic challenges, aligning its operations to areas seeing recovery and growth – such as in cargo”.
He added: “The group has restructured its cost base and continued its development strategy, seeking profitable new business with airline partners and judiciously acquiring to expand its service and geographic footprint.
“Menzies appears to us to be firmly ‘on the front foot’, in our view, positioned for an accelerating recovery and a return to secular growth trends in this most strategic of industries – a view confirmed by outlook statement, which allows us to further upgrade our forecasts for [its 2022 and 2023 full-year results]. We see further potential ahead.”
John Menzies dates back to 1833, when its eponymous founder opened a bookshop at 61 Princes Street, Edinburgh, also selling The Scotsman newspaper.