John Menzies PLC (LON:MNZS) announced the resignation of chief executive Forsyth Black as the aviation services company posted an increase in 2018 pre-tax profit but warned of a softer start to 2019.
The company, which become a pure play aviation business after agreeing to sell its newspaper distribution business to private equity firm Endless LLP for £74.5mln last June, said Black has stepped down as chief executive with immediate effect after three years in the role and 19 years with the group.
READ: John Menzies’ takeover of rival aviation services group cleared by UK regulators
Chief financial officer, Giles Wiles, will become acting chief executive until a new boss is found.
Profits and revenues rise in 2018
In a separate statement, John Menzies said pre-tax profit jumped to £21.6mln in 2018 from £9.9mln a year ago, reflecting the non-recurrence of exceptional costs related to the acquisition and integration of Aircraft Service International Group Inc (ASIG) in 2017.
The company completed its £153mln acquisition of BBA's aviation refuelling arm, ASIG, in February 2017.
Underlying profit before tax rose to £44.1mln from £42.3mln, supported by increased cargo tonnage, an extra month of ASIG trading and the realisation of cost savings from the deal along with a strong de-icing performance in the Europe, Middle East and Asia region and increased cargo forwarding volumes.
Revenue from continuing operations increased to £1.29bn from £1.27bn after securing 98 net new contracts, mitigating the impact of some contract losses and the exiting of unprofitable contracts that had large revenue contributions.
The group declared a full year dividend in line with the previous year at 20.5p.
"As I look forward I continue to see clear opportunities to sensibly grow,” said chairman Dermot Smurfit.
“We have strong management teams and excellent systems and processes that will allow us to deliver service excellence and sustainable earnings growth."
Difficult start to 2019
John Menzies said the first two months of 2019 has been tempered by soft cargo volumes and difficult labour markets in North America but it remains positive about the rest of the year.
The group added that the integration of newly acquired Airline Services Limited is progressing well with synergy benefits being realised.
The UK Competition and Markets Authority approved the firm’s deal to buy the UK aircraft de-icing specialist in January.
“Looking forward, our medium-term outlook remains very strong with excellent market dynamics and significant opportunities for growth,” said Smurfit.
Shares fell 8.1% to 496p in morning trading.
Shore Capital kept its 'buy' stance on John Menzies, saying the results were in line with its expectations and the prospects for the company remain positive with industry growth and consolidation trends continuing.
"The outlook thus remains positive with scale benefits to come," the broker noted.