Menzies seeks new routes after profits slide

Jeremy Stafford said trials would be run on van useJeremy Stafford said trials would be run on van use
Jeremy Stafford said trials would be run on van use
Logistics group John Menzies is considering offering its services to the booming e-commerce industry as it seeks new outlets for its newspaper distribution arm.

The Edinburgh-based firm, which has in recent years concentrated its growth strategy on its aviation baggage-handling division, said the distribution business remained “resilient and highly cash generative”.

Chief executive Jeremy Stafford told The Scotsman that the firm would run trials this year to see whether it could use its network of vans and buildings to service e-commerce.

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“We are recognising that we use our assets very heavily through the night but not so much during the day, which is the peak time for e-commerce deliveries,” he said. “Our footprint is skewered toward rural areas and they are growing quickly in terms of e-commerce.”

His comments came after Menzies revealed a drop in profits last year, due to adverse currency effects and the cost of investing in new bases and contracts for the aviation business.

Group turnover was almost unchanged at £2 billion, although it was up 3 per cent on a constant currency basis. Underlying profit before tax fell to £44.6 million, from £53.1m in 2013, with currency effects trimming £3.5m off the bottom line.

Stafford said increased costs at the aviation arm reflected a number of large contracts won in the US, where regional airports are outsourcing services. The dividend was slashed to 16.2p, from 26.5p, “to enable investment in growth opportunities”.


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