John Menzies figures taking off, led by aviation division contract wins

Trading at its fast-growing aviation division, headed by Craig Smyth, was boosted by a five-year contract with British Airways to handle luggage for flights out of Edinburgh, Glasgow and Manchester.

The Edinburgh-based company said the new contract, along with previously announced deals with FlyBe, represent “significant wins” although it added that it has also lost some contracts due to “airline failure”.

But overall, net contract gain in the four months to the end of April continued to be positive. Overall, year-to-date like-for-like ground handling volumes were up 2 per cent, the company confirmed, and up 5 per cent overall. While its associated cargo handling business was performing “above expectation”, like-for-like cargo volumes fell 7 per cent but overall volumes rose 4 per cent.

Its distribution business, which delivers newspapers and other printed material, was also in positive territory, although sales of weekly magazines proved “disappointing”. The firm said newspaper revenues continued to be positive, driven by cover price growth, while sales of sticker books were healthy ahead of the 2012 European Football Championship.

Menzies shares fell 5.3 per cent to 584.5p after Numis Securities downgraded the firm to “add” from “buy”. But Karl Burns of Shore Capital retained a “buy” recommendation on the firm’s stock, highlighting “strong organic growth opportunities in the aviation market”.