Menzies profit soars after '˜transformational' year

Logistics group John Menzies today said its annual profits jumped by almost a third in a year that saw its aviation arm boost its presence in North America with a bumper takeover deal.

Menzies also announced a 10% rise in its total dividend for the year. Picture: Contributed

The Edinburgh-based baggage handler and newspaper distributor announced the $202 million (£165.6m) purchase of ASIG in September, describing it as a “transformational” deal that would add plane fuelling to its aviation division’s range of services and double the size of its operations in North America.

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Menzies completes $202m ‘transformational’ takeover

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Today the group announced an underlying pre-tax profit of £49.7m for the year to the end of December, up from £38.2m in 2015, on turnover 4 per cent higher at £2 billion.

Chairman Dermot Smurfit said: “At Menzies Aviation, underlying profits were significantly ahead of last year at constant currency and have been strengthened through favourable foreign exchange translation.

“At Menzies Distribution, keeping profits broadly flat was a commendable performance in light of increasing cost pressures.”

Smurfit said the ASIG deal, which has seen Menzies agree to sell the Aberdeen operations of the newly-acquired business to allay competition concerns, would provide “great opportunities” to strengthen its business and expand its product offering.

Menzies has come under pressure from investors to break itself up into separate aviation and distribution companies, and Smurfit said an update on a review of the group’s structure would be given “at the latest” alongside its interim results in August.

The board has proposed final dividend of 13.1p a share, to be paid on 3 July, lifting the full-year payout by 10 per cent to 18.5p.