Plans to dispose of the distribution business to DX (Group) PLC were formally abandoned by Menzies yesterday when it became clear that the two companies were too far away on agreeable terms.
Underlying profits rose by 36% to £24.7mln, but after a raft of impairments and pension fund charges, pre-tax profits fell to £500,000 (£3mln) in the half year to June.
READ: DX (Group) abandons Menzies distribution deal
Turnover was 21% higher at £1.22bn, though all of this growth came from the aviation division following the acquisition of AISG in February. With AISG, Menzies supplies airports services such as cargo handling and passenger transport at 213 airports globally.
Distribution’s underlying profits were flat at £10.8mln due to the absence of a football tournament sticker campaign this year and a 9.8% drop in newspaper volumes with magazine volumes down by even more. Cost savings of £3.5mln offset the decline in sales in the division.
Dermot Smurfit, chairman, added that Menzies Aviation has started the second half well with contract gains while it is looking for new ways to grow Menzies Distribution.
The interim dividend went up by 11% to 6p.