John Menzies profits down a third

Magazine and newspaper distributor John Menzies has reported a fall in profits of more than a third in the first half of the year.

Pre-tax profits for the six months to the end of June stood at £7.4m, down 35 per cent from the £11.3m it made in the same period last year.

Revenue decreased marginally to £821.3m from the £826.5m the company recorded a year ago.

The company said gaining major contract this year would add over £180m of sales revenue by end of 2010.

Menzies recently paid £500,000 to take hold of assets held by Dawson Holdings after that company wound down its core news distribution division.

Dawson lost a string of distribution contracts, including Trinity Mirror, News International, Telegraph Media Group and Associated Newspapers, to rivals Menzies and Smiths News through the early part of the year as that part of its business crumbled.

Menzies said profits were hit by increased pension charges, a drop in magazine sales volume and a reduction in the amount of cargo it processed through its aviation passenger and cargo handling businesses.

Underlying pre-tax profit was £13.2m, the company said, a rise of 15.8 per cent year on year.

The company said it would no pay a divided as it continued to focus on reducing its debts. It said debt had been reduced by around £30m so far this year to £152.8m.

Chairman William Thomson said he was pleased with the group’s process as both operating divisions were performing and indicated that full year results were likely to be a head of market expectations despite a global economic situation that remained challenging.

Menzies said long-term banking facilities were in place to 2011 and beyond.

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