John Menzies FY revenues drop 37%, in line with expectations

In an update for the year to the end of December 2020, Menzies said it had continued to trade in line with the expectations set out at the interim results, with revenues for the second half similar to those reported in the first and full-year revenues down 37% on the previous year.

Activity in the second half showed "an encouraging recovery" through the third quarter, after the very severe reduction in the second quarter, it said. However, activity levels began to decline again towards the end of the period due to normal seasonal factors and the impact of further Covid-related travel curbs.

Menzies said ground and fuelling service volumes ended the year 50% below the previous year. Revenues from air cargo services were more resilient, with volumes around 20% below 2019 levels and strengthened by higher yields.

"We continue to believe market conditions will remain challenging through the early part of 2021, and this is reflected in the group's operational and financial assumptions," it said.

"While there has recently been some renewed Covid-19 related disruption, the positive developments with regard to the roll out of 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."