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John Menzies considers splitting two arms of business

Published 16/08/2016

Menzies Distribution is one part of the company.
Menzies Distribution is one part of the company.

John Menzies is exploring a potential break up of its distribution and aviation business amid renewed shareholder pressure.

Chairman Dermot Smurfit said in the company's interim report that he was looking at whether the two businesses "are best placed to prosper while they are part of one group".

He explained that the situation was complex, requiring specialist advisers to consider the structure of existing pension schemes.

Activist investor Shareholder Value Management started to push for a break-up shortly after buying 7% stake in John Menzies in July.

It marked a renewed push towards breaking up the company, which currently deals with two distinct businesses - one in newspaper and magazine delivery, the other in plane cargo and baggage handling.

Swiss investor Lakestreet Capital launched similar calls for a company split last year.

John Menzies reported a 6.5% increase in underlying pre-tax profit to £ 18.1 million in the first half of the year, compared to the same period in 2015.

The company was also able to increase its dividend from the same time last year, up to 5.4 pence from 5.0 pence per share, according to the company's interim report.

The company review which will weigh up the break-up is expected to take up to 12 months, Mr Smurfit said.

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