Twin engines of growth as John Menzies takes off

JOHN Menzies’ outgoing finance director Paul Dollman promised profit growth in both the company’s aviation and distribution divisions this year.

In its year-end results announced yesterday, the Edinburgh-firm said its aviation division continued growth at expected levels despite the loss of some contracts due to airline failures and “headwinds” of weak sterling.

Underlying profits in the company’s ground handling and cargo business grew 10 per cent to £35.6 million, although on a “constant currency basis” they were up 16 per cent to £37.5m.

The company’s distribution division, where underlying profits remained flat in the year to the end of December at £28.8m, is also set to improve in 2013 due to “interesting new areas of potential revenue generation”, analysts said..

Combined underlying profits for the firm rose 3.5 per cent to £58.4m last year, despite a 0.8 per cent dip in turnover to just under £2 billion. But pre-tax profits fell from £52.5m to £32m due to mainly to one-off costs related to rationalisations and onerous leases.

The board proposed a final dividend of 17.85p, a 5 per cent increase giving a total for the year of 25.2p.

Menzies shares rose 5 per cent to 785p. Dollman’s replacement Paula Bell is expected to join the firm in April.