Menzies Hit by Magazine Slump

Article excerpt


News distribution and aviation services group John Menzies said yesterday it was reviewing its magazine packing operation, after a slump in sales of monthly and partwork titles.

The Edinburgh company said a good performance from its airport ground handling division would not be enough to mask tough trading at Menzies Distribution.

It said operating profits at the distribution arm had fallen 15% to pounds 12.5m during the six months to July 1, despite a cost-cutting programme.

The division is expected to face increased competition as WH Smith last week completed the demerger of its retail and distribution arms.

Overall John Menzies reported a 26% increase in pre-tax profits to pounds 19.5m, but a 6% decline in magazine sales had left it expecting to fall short of its full-year expectations. Shares were off 5% yesterday.

Sales of monthly titles slipped 9% while partwork publications dropped 35%, although 2% more weekly magazines were sold.

Chief executive Patrick Macdonald believes the slide reflects the increasing popularity of digital technology such as broadband internet and 3G mobile phones. …