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Date: Thursday 21 Aug 2008

LONDON (ShareCast) - Newspaper distributor and support services firm John Menzies saw profits fall for the half year mainly due to start-up costs at its aviation business.

Pre-tax profit fell to £11.3m from £15.3m before due to start-up costs of £3.5m in the aviation division compared with £1.1m in the same period last year. Revenue in the period increased by 10.3% to £826.5m.

“The board is satisfied that the current strategy is continuing to drive the Group forward in this challenging market and overall the Group is performing broadly in line with the Market's expectations,” said the group.

The group said at Menzies Aviation, the industry is experiencing turbulent times, which will lead to some volume reduction in the remainder of this year and into 2009.

“Decisive management actions have been implemented in response to the current market conditions, with costs being taken out of the central overhead and selectively from operational management, including addressing the current challenges within the USA cargo business. While the costs will be incurred in 2008, the benefits will be realised fully during 2009,” said the group.

Interim dividend has been raised 5% to 7.56p.

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