John Menzies has reported a jump in underlying interim profits as it emerged that the Edinburgh-based group would face an in-depth probe by the competition watchdog over the takeover of a rival.
The company, which can trace its roots back to a bookshop founded in 1833, is set to become a pure aviation business after previously agreeing to sell its newspaper distribution division to a private equity firm.
Underlying profit at the group before tax rose to £28.5 million in the six months to the end of June, from £24.7m a year earlier. Turnover lifted 4.5 per cent to £1.25 billion.
Menzies Aviation booked a 9 per cent hike in underlying operating profit to £23.7m as it got a boost from higher cargo volumes, newer operations and contract wins in Europe, the Middle East and Africa.
The group had been given a deadline of today by the Competition and Markets Authority (CMA) to offer proposals to address its concerns over a deal to buy Manchester-based Airline Services.
The CMA voiced concerns that competition could be affected at certain locations including Edinburgh and Glasgow airports.
In a statement today, the competition watchdog said Menzies had “chosen not to offer proposals” to address the concerns and the merger will now be referred for an in-depth investigation.
Menzies also unveiled an interim dividend of 6p per share, unchanged on a year earlier.
Forsyth Black, chief executive designate, said: “We hold a strong position in a growing marketplace and our aim is to build on this by continuing to pursue our established strategy.”
Alasdair Ronald at Brewin Dolphin Glasgow said: “This is a strong set of results from John Menzies. The group’s shareholders should now benefit from good growth opportunities in an industry that is consolidating rapidly.”