John Menzies shares slump as distribution business deteriorates

JOHN Menzies, the airport services and logistics firm, warned yesterday that poor trading in its magazine distribution arm has meant profits will be slightly lower than expected, prompting a 6.4 per cent fall in its share price.

The firm said Menzies Distribution had not improved since its results in August, when it reported a 10.8 per cent fall in sales, and ancillary revenues and seasonal sales had fallen short of forecasts.

Volumes in its aviation handling unit were up two per cent on a like-for-like basis, in line with expectations.

The acquisitions of Desacol and Skystar, announced in August, have both completed and are performing well, Menzies said.

“Looking ahead, we know our markets; we have experienced management teams and have a clear strategy to deliver growth,” the company said in its interim management statement.

Analysts at Liberum Capital cut their full-year earnings forecast by five per cent to reflect the weak update, but said newspaper sales were showing signs of levelling off.