John Menzies shaken by air industry turbulence
The firm posted a pre-tax loss in the first half.
Aviation services provider John Menzies revealed the impact of headwinds in the aerospace industry as it reported a pre-tax loss in the first half.
The company swung to a loss before tax of 4.4 million in the six months to June 30, compared with a profit of £8.3 million for the same period in 2018.
Revenue was up 3.6% at £649.9 million.
The group said it was affected by the grounding of the Boeing 737 Max aircraft, which has been taken out of action following two fatal crashes.
Weak cargo volumes also contributed to the difficulties, as did the loss of some contracts in the latter half of last year.
We continue to drive a company-wide focus on cost reduction, customer engagement and operational discipline, with profitable growth at the forefront of our agenda Giles Wilson, John Menzies
Chief executive Giles Wilson said the company had taken a number of “decisive actions” to address the issues, including a cost reduction programme which is on track to deliver £10 million of savings by 2020.
“We continue to drive a company-wide focus on cost reduction, customer engagement and operational discipline, with profitable growth at the forefront of our agenda,” he said.
“We have an increased awareness of our customers’ needs that will ensure that we are viewed by our customers as the partner of choice and recognised for our best-in-class operational delivery.”
Shares in the company were down 3.5% in early trading on Tuesday.
John Moore, senior investment manager at Brewin Dolphin, said: “It is an increasingly tough environment for many businesses in aerospace and related sectors – weak consumer confidence is impacting travel plans, trade tariffs are reducing the exchange of goods, and fuel costs have been higher on average this year.
“Notwithstanding these challenges, John Menzies is a solid business and is responding to the difficult environment with cost-cutting and restructuring programmes that should help it weather any further storms.”