John Menzies Takes off on Profit Forecast
Mesure, Susie, The Independent (London, England)
SHARES IN John Menzies surged 8 per cent yesterday after the newspaper distribution-to-aviation services group revealed its profits would top City expectations.
Patrick Macdonald, the chief executive, said both the company's divisions had traded well, benefiting from its decision to sharpen its focus on customer service.
A strong demand for Euro 2004 stickers, magazine collectables and weekend newspapers boosted the contribution from its distribution arm, the company said. Meanwhile, its aviation division benefited from the uptick in international air travel.
Menzies' house broker, Dresdner Kleinwort Benson, raised its pre- tax profit forecasts for 2004 by pounds 4m to pounds 29m. For 2005, it is predicting profits of pounds 32.4m, up pounds 4.6m. The group's shares, which have risen sharply this year, soared 35p to 450p. "In trading terms, the first half has been much stronger. We have invested strongly in customer services in our distribution arm and we are starting to see the benefits come through. On the aviation side, we are winning contracts and benefiting from more passengers and more cargo flying as the economy picks up," Mr Macdonald said.
Menzies, which has upgraded its distribution branch infrastructure over the past three years, has added new outlets at Chelmsford, Essex and Bow, east London, so far this year. …