John Menzies warns coronavirus will hit profit
John Menzies Plc
607.00p
16:30 19/03/24
John Menzies warned the coronavirus would probably reduce profit by as much as £9m in 2020 as the outbreak affected the aviation logistics company's work for Chinese airlines.
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The company said the impact was worst at its operations in Macau in southern China but also affected work for Chinese carriers across its network. It said the virus would probably reduce profit in the year to 31 December by £6-9m if the effects subside towards the end of the second quarter.
In a trading update John Menzies said: The outbreak and continued spread of COVID-19 (coronavirus) is having a direct impact on the operations of the group … The situation is still evolving, 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."
The company said it would keep a tight grip on costs to offset some of the impact.
John Menzies said the effect of the virus was "disappointing" when its business had underlying momentum. After cutting costs in 2019 underperforming sites are improving and positive commercial performance had continued into 2020, the group said. It announced a £325m bank facility through to 2025 with improved covenants.
John Menzies shares fell 4.2% to 340.5p at 09:22 GMT. The shares had already fallen each day since closing at 410p on Friday as investor concerns mounted about the coronavirus's impact on companies exposed to China.
Shore Capital analyst Robin Speakman said: "The impact on coronavirus on Menzies has clearly been discounted on Menzies over the last few weeks with it being clear that the group was going to be impacted by this event with operations in the SE Asia region, with an operational base in Macau, servicing China airline clients and being exposed to trade and passenger flows from the region."