One to Watch: John Menzies

JOHN Menzies, to which Brewin Dolphin is broker, has two principal divisions: Menzies Aviation is a global ground and cargo handling company, while Menzies Distribution provides distribution and marketing services to the UK's newspaper and magazine supply chain.

John Menzies

384p -4p

Scotsman says BUY

John Menzies is burdened by a lot of historical baggage, which is perhaps appropriate for a company involved in cargo handling. Its eponymous stores division was sold years ago and the aviation side now represents nearly 40 per cent of operating profit. It is certainly true the company had a grizzly 2008, which exposed, perhaps, an over-ambitious previous business model. Management has, however, actively addressed the challenge and has taken out a significant level of cost without any apparent impact on the group's operational efficiency.

Although the shares have recovered from the 48p they hit in the spring of 2009, they are still well off the 600p on which they stood in 2005. They look an interesting prospect – an investment in a well-managed company with a positive operational gearing through a developing economic recovery and offering a prospective yield of a short 4 per cent on a restoring dividend.

• The value of your investment could fall and you may get back less than you invested. You should take professional advice if you have any doubt about the suitability of this company for your portfolio.