Menzies laid low by coronavirus outbreak
John Menzies, the Edinburgh aviation services group that operates in almost 40 countries, has warned of a multimillion-pound profit blow as a result of the coronavirus outbreak.
The group, which is one of Scotland’s oldest companies, dating back to 1833, provided an upbeat assessment of recent trading but said the virus was a “disappointing” headwind.
It estimates that there is likely to be a profit hit of between £6 million and £9m providing the impact of the virus subsides towards the end of the second quarter.
“Wherever possible mitigation actions are in place along with a tight control on costs and expenditure,” the firm added.
Menzies told investors that the impact had been at its greatest in its operations in Macau, where it handles Chinese carriers across its network.
“The situation is still evolving,” it noted, “and we only have limited visibility of what flight schedules are being impacted into March and beyond, so it is difficult to assess how extensive the impact could be at this point.”
Otherwise, the group pointed to “significant progress” during the past year in building a platform for “long-term, sustainable growth”. The actions taken to “right-size” the business and reduce overheads during 2019 are delivering benefits, it added.
The firm became a pure aviation business after selling its newsprint distribution division to a private equity firm. Menzies is due to report its annual results on 10 March.