8 September 2000
John Menzies plc
TO THE 2000 ANNUAL GENERAL MEETING
Mr Gavin Reed, Chairman of John Menzies plc, told
shareholders at today's Annual General Meeting that:
'The programme of significant change designed to transform
the Group into a logistics support services company is
continuing with the disposal of THE, the non-core
entertainment wholesaling business, on 11th August 2000,
which eliminated a loss-making business from the Group.
During the three month period since the year end on 6th May
2000, the Group's trading performance has been in line with
the Board's expectations.
Menzies Wholesale has increased sales on last year, although
magazine growth slowed, reflecting a reduction in the number
of new titles and a fall in the women's weekly market. This
growth has nonetheless offset the decline in newspaper
volumes which continued despite extensive promotional
activity in this area.
The intention of Tesco to appoint a single wholesaler for
its UK magazine supply continues to create tension in the
industry. Independent reports have highlighted the adverse
implications that this would have on the existing news
network. However, I should emphasise that we have long term
contracts in place with the majority of publishers which we
are fully committed to honouring. These suppliers have also
assured us that they intend to do likewise.
Menzies Aviation Group's reorganisation into three
Divisions, Cargo Handling, Passenger and Ramp Handling
Services, and Support Services, has enabled management to
capitalise on recent organic growth, acquisitions and
business start-ups. Further opportunities continue to arise
and the outlook for Menzies Aviation Group remains most
The acquisition of Ogden Ground Services ('OGS'), the ground
handling activities of Ogden Aviation Services, provides a
unique opening to propel Menzies Aviation Group into the
forefront of the industry internationally, and will provide
a strong platform for further growth. Completion is
expected around the end of September. Our dedicated
integration team has now met with virtually all OGS
management and visited the majority of locations. We have
also separately met with all of the key international
partners of OGS.
We are confident that the acquisition of OGS will enable
Menzies Aviation Group to capitalise on the many
opportunities offered in an industry which is consolidating
globally and at the same time subject to market deregulation
THE Games has continued to perform well, with Gameboy
product sales well ahead of last year, due to the benefit of
the Pokemon phenomenon. While the decline of the N64 has
continued, the release of certain long awaited titles and
launch of Pokemon on the console has assisted this format.
Our contract with Nintendo ends in December this year and we
are currently in active discussions about renewal. We
remain determined to ensure that any renewal will reduce the
Group's exposure to the volatility of this market.
Early Learning Centre's turnaround continues in a highly
competitive retail toy market. Turnover through all
channels has increased by 2 per cent in the year to date.
We believe that the business will return to profit in the
current year, although it remains reliant on the
Overall, the Group is performing to the Board's
expectations, confirming our belief that our strategy will
deliver sustainable growth in shareholder value.'
Gavin B Reed
Bell Pottinger Financial Tel: 020 7353 9203