John Menzies closes air cargo bases

DISTRIBUTION firm John Menzies yesterday unveiled plans to close its cargo operations at four airports, including Glasgow, although it is expected that jobs losses will be kept to a minimum.

The Edinburgh-based company said that it will take a charge of £3 million to close the sites – which also cover operations at Birmingham, East Midlands and Manchester airports – and that it expects to complete the restructuring by 31 August.

Menzies said that the closures would allow it to focus on its remaining operations at Aberdeen, Belfast and London’s Heathrow and would make its UK cargo division profitable.

Between them, the four sites that will be closed employ 103 staff, with nine of those based in Glasgow.

It is understood that negotiations with rivals to take on contracts and staff from the four bases are at an advanced stage and that any job losses are expected to be “at most in single figures”.

Shore Capital analyst Karl Burns said: “Reducing the operational gearing of the group’s highly-cyclical cargo business should help ease pressure on cargo profitability, given the continued decline in cargo volumes. We retain our ‘buy’ recommendation, highlighting the growth opportunities from the highly fragmented global ground handling market, in addition to high cash generation of the group and undemanding rating.”

Shares ended the day up 6p at 612p, having fallen as low as 598p in early trading.