John Menzies revenues drop 37% but steadier in second half

John Menzies PLC (LON:MNZS), the airline support services group, said trading stabilised in the second half of 2020 though it was weaker towards the end of the period as cornavirus (COVID-19_ restrictions were tightened again.

Revenues for the second half were similar to those reported in the first half and 37% below 2019 for the year overall.

Ground and fuelling service volumes dropped by 50% though air cargo revenues declined by 20% and saw higher yields.

Menzies said it posted an underlying profit in the second half helped by increased cargo volume, government support and cost-cutting.

Year-end net debt and liquidity were ahead of the company’s expectations, it added, and well above the minimum liquidity covenant.

Menzies noted that vaccination programmes are encouraging and support assumptions of a gradual recovery in volumes from the second quarter of 2021.  

 “Assuming a more stable, if still subdued, backdrop in 2021, the actions taken to structurally reduce costs, should show an increasing benefit in the current year, with government support schemes also continuing to provide a material benefit in the first quarter,” the company said in a trading update.

Philipp Joeinig, Menzies’ chairman and chief executive added: “I see the opportunities for the business as being stronger than ever. I am pleased that we have not wasted this crisis, having instead used it to become more competitive.

“We are well on track with our rebased growth strategy and we are moving in the right direction towards being the service provider of choice to our customers.”