John Menzies was established in 1833, when its 25-year-old eponymous founder left his London publishing job and opened a bookshop at 61 Princes Street in Edinburgh. The entrepreneur spied an opportunity to become the only wholesale bookseller in Scotland – and also began selling The Scotsman newspaper over the counter.
Four years later, Charles Dickens’ first novel, The Pickwick Papers, was released in monthly instalments, and when publisher Chapman & Hall appointed Menzies as its Scottish agent, the book’s popularity enabled further expansion.
The importance of Menzies’ heritage is not lost on its chief executive Forsyth Black, who took the reins in September after 18 years with the business.
“Running John Menzies, especially as a Scot, you realise there is a weight of history and a little bit of expectation on you,” he says, pointing out that the company’s boardroom displays a framed cheque from Dickens, made out to Menzies himself.
Additionally, the company’s now-closed flagship retail branch at 107 Princes Street featured at the start of the film Trainspotting (though it sold its retail arm to WH Smith for £68 million in 1998).
“We’re a little bit of a Scottish and an Edinburgh piece of heritage,” says Black. “Whilst business is business, we’ve also got to pay attention to that.”
Menzies is one of Scotland’s largest firms, with a global workforce of about 34,500, and it is listed on the main market of the London Stock Exchange. In the first half of 2018, turnover jumped 4.5 per cent year-on-year to £1.25 billion, while underlying pre-tax profit rose to £28.5m from £24.7m. September last year marked the beginning of a new chapter in its history with the disposal of Menzies Distribution to private equity fund manager Endless LLP for £74.5m.
The “landmark day” meant that Menzies, now based in Edinburgh Park, brought down the shutters on 185 years in print media distribution and moved forward wholly focused on global aviation services, a market estimated to be worth £60 billion.
Amid such a strategy, Menzies last week hailed the approval from the Competition and Markets Authority of its acquisition of Manchester-based Airline Services, which specialises in aircraft-handling and cabin interior support. The green light for the deal, which takes the Scottish business into four new airports, came after an in-depth Phase 2 probe by the watchdog.
Pre-dating that transaction was the acquisition of US aviation services business Asig from BBA Aviation, which completed in February 2017, adding plane-fuelling to Menzies’ range of services and doubling the size of its US operations. Spending $202m (£156m) of Menzies investors’ money was a major undertaking “and we had to get it right”, says Black. With Asig now largely integrated in terms of back-office systems, people and organisational structures, he hails the acquisition as a “game-changer”.
Menzies was founded before aviation pioneers the Wright Brothers were born, but now spans 220 airports including Glasgow, Edinburgh and Aberdeen, and 34 countries. Black’s job inevitably entails plenty of air travel, which provides an invaluable chance to run the rule over operations. “Waiting for an aircraft, looking out the airport window, is sometimes the best piece of research you can do,” he says.
Black studied accounting at Edinburgh’s Napier University and qualified as a management accountant, working for firms including building specialist Marley. But things “started to get more interesting” when he joined Sky TV in Dunfermline. This period transformed his career from being an accountant into being far more commercially minded, managing projects and accounts. It also saw him do an MBA at the University of Edinburgh.
He spotted an advert in The Scotsman for management trainees at John Menzies, joining the business in 2000, initially in its distribution arm and then moving to what was then a fairly compact Menzies Aviation division.
In 2007, everything “really started to motor for” Black, as he moved to Cape Town for the next eight years where he built up the company’s South African operations.
He arrived in the country with just a laptop, but five months later the business unit had 1,400 staff and $38m of equipment. In its first year it completed 45,000 aircraft turns for about 40 customers and 40,000 tonnes of air cargo went through its sheds. “It had all been started from zero. It was just an enormous achievement that sopped up every minute of every day in between [October 2007 and March 2008].”
Black then got the call to come back to Britain to lead Menzies Distribution, which he did for about 18 months. Under a company reshuffle, he was then appointed head of its aviation arm before stepping up to be CEO.
“That time developing the African business and then launching it in particular, was without a doubt the making of me in so many different ways, in terms of career, in terms of character, in terms of expertise.
“I’d built an operation within Menzies character but in my own mould… I think that sort of experience of going in right at the deep end and coming out with a successful operation and a successful business was absolutely key to the next steps.”
His CEO appointment came as the company sought to revert to a more standard executive structure. But while there had been a run-up to his new position, some adjustments were required. “On the one hand, I came to work the next day and many things hadn’t changed – but on the other hand, everything had changed, because the job is an entirely different job to that of running a division” – not least requiring dealing with the demands of shareholders, investors and the City in general. “I’ve had to learn, and I’m still learning and I’ll probably continue to learn forever, that stepping up requires just standing back a little bit and deciding how you’re going to do things differently again.”
However, he stresses that the company’s aviation-focused rebirth was less of an adjustment than it might have appeared from the outside. “From the inside looking out, it was more evolution than revolution.”
The business is operating in a sector suffering no shortage of turbulence, with fuel prices among factors squeezing margins and question marks over the impact of Brexit as well as disruptive weather events such as Hurricane Irma in 2017.
Operators to have folded include Monarch, while Barclays said in a recent note on European airlines that 2019 looks to be the “height of aviation demand uncertainty in recent years” ahead of 29 March.
But Menzies deals with worldwide events and their knock-on effects every day, and will continue to do so, says Black. “We’re resilient enough and large enough and have a big enough spread of customers and geography and product now that we can take hits as we go along – but we expect to, because we’re a portfolio business spread right across the world.”
The business, which has an 8 per cent annual revenue growth target, is set to report its 2018 results on 13 March, with trading having been in line with market expectations.
Looking to 2019 as a whole, Black is eyeing plenty of opportunities, contracts to win, businesses to open and new products to develop. It comes after a newsworthy few years, making headlines after pressure from institutional investors to split its aviation and distribution units, and high-profile senior departures in 2016, for example. Menzies also pulled the plug on a £40m deal to acquire parcel firm DX Group. “I think there’ll be plenty of newsworthy things for Menzies going forward, but I think it’ll be less of the unexpected and more related to the business as we see it going forward,” says Black. “We’ll be chasing growth and success at every opportunity.”
John Menzies himself would probably be surprised at how the business that bears his name has developed, and Black, too, never knows what lies ahead. “Every year that I’ve been with Menzies, I’ve got up on 1 January and wondered what the year might bring. It’s brought something different and it’s always been something positive when you add it up in total.
“I think we’ve everything to play for,” he adds, highlighting the reputation of its brand. “Our job is to nail the aviation colours to it, and finally take down the retail colours – the last vestige of the retail colours – and the logistics colours. It’s a brand worth keeping – and it’s a brand to be proud of.”