John Menzies has suspended its annual dividend as the aviation services business prepares for the impact of coronavirus.
The company warned investors two weeks ago that the Covid-19 outbreak would dent its profits for the current year.
The Edinburgh-based firm, which operates many of the behind-the-scenes parts of airports, has now said that further cost-cutting lies ahead amid “very disappointing” uncertainty, caused by the virus.
It updated investors as it reported a 19.9% decline in pre-tax profits to £17.3 million for the year to December 31.
Profits slipped on the back of the grounding of Boeing’s 373 Max aircraft, the demise of Thomas Cook and the loss of exclusive contracts in the Dominican Republic and Panama.
Meanwhile, revenue increased by 2% to £1.32 billion for the year despite “weaker markets across the wider aviation sector”.
John Menzies said it was “pleased” with the structure of the business following a major restructure after the sale of its newspaper distribution arm.
Giles Wilson, chief executive of John Menzies, said: “Last year, we said we would be ‘fit for 2020’ by doing five things: right-sizing the business, fixing under-performing operations, improving customer engagement, investing in our team and targeting higher margin business.
“We’ve delivered on all five thanks to the hard work of all our colleagues.
“We now have the right team and the right structure that puts us in a strong position to seize the opportunities in this structural growth aviation market.”
Philipp Joeinig, executive chairman, said: “We are currently experiencing some headwinds due to the impact of Covid-19 on our activities, but in the medium and long term we see genuine opportunities for growth.”