Aviation and distribution divisions both trading ahead of last year
Logistics firm John Menzies has made a strong start to the year with trading at its aviation division ahead of last year.
The Edinburgh-based company said it has made a “positive start to the year” in the first four months and is trading in line with expectations.
In March, Menzies Aviation secured a new five-year contract with British Airways to handle around 19,500 flights a year out of Manchester, Edinburgh and Glasgow.
Menzies' full year results in March also reported its aviation division was now the group's largest profit and cash contributor, generating profits of £39.4 million last year.
The aviation division generated turnover of £676.8 million last year and secured new contracts with existing customers at 18 new airports, and 50 new contracts overall, which Menzies said will generate revenues of £41 million a year.
In a trading update posted today, Menzies said despite a seven per cent decline in like-for-like cargo volumes, absolute volumes rose by four per cent as a result of the new contract wins last year.
Ground handling volumes are also up two per cent on the first four months compared with a year ago.
Trading at Menzies' distribution arm, focused on newspaper, magazine supply and marketing, is also reported to be trading ahead of last year, largely from distribution of stickers relating to the Euro 2012 football tournament.
Sales are also expected to be given a lift in the run up to and the duration of the Olympic Games in London this summer.
Menzies said its continuing “rationalisation plans” in the Scottish central belt are on track and further changes are also “proposed in Yorkshire and the East of England”.
Its £10 million, five-year implementation of SAP software is being rolled out across the group's branch network.
The group predicts this roll out it will deliver £4.5 million a year in cost savings.