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John Menzies has spent the summer making hay while one of its major competitors in the newspapers and magazines distribution business went under.
Dawson News went into administration at the start of this month, largely because it had recently lost most of its big contracts with publishers to Menzies and Smiths News. Menzies bought some of Dawson's operations from the administrator while most of the £180 million of new business which was scheduled to move across over 18 months shifted in just days.
Because of start-up costs, that new business won't add to earnings this year but will kick in next. But in the meantime Menzies' existing distribution and aviation businesses have benefited from tight costs control and been powering ahead, and the group said it will beat City profit forecasts this year.
Even in Mexico, where Menzies had warned it could take a big hit from swine flu on its airport ground handling operations, the actual outcome has proved negligible. The group lost a net four cargo-handling contracts including three at Heathrow, mainly as airlines cut back their schedules.
Headline profits rose 16% to £13.2 million on revenues little changed at £821 million in the six months to end-June. Net debt has been cut by £30 million since the year end to £153 million and the group will cut it further with is decision to suspend dividend payments for the time being.
