Menzies on growth track; Macfarlane making ‘good progress’
Up and away: John Menzies CEO says the industry is evolving
The logistics firm said it expects to achieve its 8% per annum revenue growth target.
The company said it is on track to grow the operating margin for the third consecutive year and that 2018 has been a “commercially challenging year” during which revenue growth has slowed, primarily due to licences not renewed, some contracts lost and the exiting of less favourable contracts.
Despite these headwinds the company has won 34 net contracts generating £8m of annualised revenue.
Forsyth Black, chief executive, said: “I am pleased that we are continuing to make solid progress against our strategic objectives.
“There is no doubt that our industry is evolving with the introduction of fuel efficient composite aircraft, a greater focus on on-time performance and the need to deliver great customer experiences.”
The momentum achieved in the first half of 2018 has been maintained in the second half of the year with consistent levels of organic growth and benefit from acquisitions. The board is confident, on the assumption that the group benefits from the normal seasonal uplift in activity in the final quarter of 2018, that its full year expectations will be met.
Sales growth for the year to date is 13% with 5% achieved from organic growth and the remainder from acquisitions. Accordingly, Macfarlane Group’s profit before tax in 2018 to date is well above the corresponding period in 2017.
Bank borrowings were £10.9m at 30 June. The group will pay £4m in deferred consideration for prior year acquisitions in the second half of 2018, reflecting full payments in respect of strong trading by these acquisitions in the earn-out periods.
The two most recent acquisitions had a net cash cost of £1.6m at the start of the second half of 2018. These outflows will be largely offset by the Group’s traditionally strong working capital inflows in the final quarter.
Stuart Paterson, Chairman of Macfarlane Group, said: “I am pleased to report that Macfarlane Group’s performance in the second half of 2018 has continued to reflect the good progress demonstrated in the first half. The board remains confident in meeting its full year expectations for 2018.”