Cargo firm hit
Menzies Aviation plunges to loss after Boeing’s 737 Max grounding
Cargo firm hit by aviation woes
Menzies Aviation has reported a first half loss after trading was hit by weaker markets across the aviation sector, including the grounding of Boeing’s 737 Max aircraft.
The Edinburgh-based baggage and cargo handling company which operates at 200 airports hinted at job cuts to “right size the company” as it pushes ahead with a £10 million cost-cutting programme.
The reduction in expected airline flight schedules, cargo volumes and yields in a number of locations, had impacted its first half results, it said.
“To mitigate these challenges decisive actions have been taken. We have implemented a cost and efficiency programme that will deliver over £10m of cost savings, the majority of which will be realised by 2020. The global commercial team has been restructured,” said the company.
A pre-tax loss of £4.4 million compares to an £8.3m profit in the same period last year. Top line revenue of £649.9m was an increase of £22.7m on H1 2018 while underlying operating profit of £17.9m was down £3m.
The board has declared an interim dividend of 6p per share which is payable on 15 November to all shareholders on the register at 18 October.
Giles Wilson, CEO, said: “The first half result was impacted by the loss of exclusive licences in H2 last year and generally weaker markets. To address this we have taken a number of decisive actions that we expect will improve H2 2019 and underpin our growth ambitions in 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. 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.
“We are a people business and we will continue to evolve our offering to ensure we recruit and retain the right people which will deliver a great service for our customers.
“Looking forward, I continue to see clear opportunities to grow profitably. The structural dynamics of our markets remain strong in the medium and longer term. We have excellent management teams in our business and cutting edge systems that will enable us to deliver sustainable earnings growth, particularly as the market improves.”