John Menzies profits are hit by turbulence at London Heathrow

 
Joseph Millis
AIRPORT services and logistics firm John Menzies said yesterday that operational difficulties at London Heathrow airport will impact its first-half figures this year.

Newspaper and magazine like-for-like sales in the distribution division in 2014 were down three per cent.

However, the Orbital marketing services acquired in 2012 reported strong growth.

The aviation division enjoyed stronger full-year market growth with turnover up two per cent and per cent in current currency.

However, increased costs at Heathrow and the closure of Terminal One and relocation of carriers hurt the company results with contract churn and margin erosion, coupled with a new market entrant and very competitive contract negotiations.

Revenues fell 0.13 per cent to £1.9bn, while profits before tax dropped sharply by 39 per cent to £25.7m.

N+1 Singer analysts said a dividend cut to 16.2p, from 26.5p last year, was not a huge surprise.

Chief executive Jeremy Stafford said that there was “much to do as we prepare for the next phase of the group’s development, and we do so with confidence”.