Decision follows DX deal collapse
Menzies puts distribution division up for sale
Distribution division is up for sale
Aviation and logistics group John Menzies has put its distribution business up for sale following a review of the group’s operations.
The decision to sell Menzies Distribution follows the failed attempt to merge the business last year with DX Group in a reverse takeover.
Chairman of the Edinburgh-based group Dermot Smurfit said the board believes there is “strategic merit in and potential shareholder value to be created by separating the aviation and distribution divisions into strategically focused and independent businesses.”
The board appointed NM Rothschild to undertake a strategic review of distribution and has now signalled that a sale process for Menzies Distribution has begun.
The announced came with annual results showing record underlying operating profits boosted by the $202m acquisition early last year of ASIG.
Mr Smurfit said: “At Menzies Aviation we completed and are successfully integrating the group’s largest ever acquisition which after a period of stabilisation offers exciting growth opportunities.
“Overall, the business has performed well with many new contracts gained and we continue to invest in our people and systems in pursuit of our excellence manifesto.
“I am very pleased that despite a number of distractions Menzies Distribution produced a solid performance, holding underlying profits flat in the face of declining volume and increasing wage costs.
“We continue to make good progress on our separation plans and a sale process for Menzies Distribution is now underway.
“The board is focused on creating a global pure play aviation services business and is excited by the opportunities that presents. We have a strong management team who are delivering against our strategic objectives.
“We are a very well placed, well-funded group operating in a structural growth market and we look to the future with confidence.”
Menzies Aviation provides passenger, ramp and cargo services at 212 airports in 34 countries, supported by a team of some 32,500 staff.
Menzies Distribution operates one of the largest overnight logistics networks in the UK, providing final mile delivery for more than100 million delivery units each year serving customers in the press, travel and third-party logistics sectors.
It is also expanding into the UK retail logistics and neutral consolidation within the fast growing parcel delivery market.
– Group successfully completed its largest ever acquisition (ASIG) for US$202m
– Record reported underlying operating profits delivered – up 41% at £77.9m
– Exceptional charge of £27.1m relating to corporate transactions and pension de-risking
– Sale process for Menzies Distribution is underway
– Underlying EPS up 20%
– Proposed final dividend of 14.5p giving a total dividend of 20.5p for the year, up 11%
Menzies Aviation – An excellent year delivering strong growth
– ASIG acquisition completed and integrating well. Projected synergy target being exceeded
– Underlying business performing well
– Investment in people and processes ensuring industry leading position maintained
– Commercial progress continued with excellent net contract gain position
Menzies Distribution – A solid performance
– Underlying operating profit in line with last year at £24.8m