JOHN Menzies yesterday announced a steep fall in half-year profits after contract losses in its aviation arm.
The logistics and airport services company reported pre-tax profits of £5.8m, a 58.6 per cent decline on the previous half-year total of £14m.
In addition to the loss of contracts, operating profit in its ground handling operations was affected by reduced volumes at London Heathrow airport following terminal changes.
The company also described as “disappointing” its failure to win a tender in May run by Spanish airport authority Aena.
Menzies said it was now diverting its attention to “other opportunities across the network”.
Jeremy Stafford, chief executive of John Menzies, said: “Our transition plans are on track and progressing well, although the first half of the year has been challenging as we continue to address the operational issues that arose during 2014.
“In terms of group full-year performance, as we previously highlighted, profits will have a greater second half weighting this year as we continue to transition the business.
“There is a great deal of potential across the business and we remain on track.”
The loss of contracts at the end of 2014 was reported as a major reason for the firm’s performance.
The Scottish company has two divisions – aviation and distribution.
It reported the successful acquisition in June of AJG Parcels, which delivers to harder-to-reach areas in Scotland, anticipating the growth of the e-commerce market.
Shareholders were paid a 5p dividend and can now expect an end-of-year dividend of a little under 12p.
Shares were down at the close by 4.77 per cent at 469p, a drop of 23.5p for the day.