John Menzies shares plunge after profit warning

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Passengers arrive with their luggage in Terminal 5 of London's Heathrow Airport on May 29, 2017. Passengers faced a third day of disruption at Heathrow Monday as British Airways cancelled short-haul flights after a global computer crash that unions blamed on the outsourcing of IT services to India. The embattled airline said it was cancelling 13 short-haul flights from Heathrow Airport, Europe's busiest, but was aiming to operate a full long-haul schedule from the hub and was operating a full service from Gatwick Airport. / AFP PHOTO / Daniel LEAL-OLIVAS (Photo credit should read DANIEL LEAL-OLIVAS/AFP/Getty Images)

UK aviation services firm John Menzies has said it expects profits for the full year to be lower than the year before, citing challenges in the aviation market.

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In a statement this morning the company said performance for the first half had been below expectations due largely to weak cargo volumes and flight schedule reductions.

Shares in the aviation firm fell 21 per cent shortly after trading opened on the London Stock Exchange. They have fallen 29 per cent since the start of the year.

John Menzies is currently undergoing a cost-cutting programme that it hopes will deliver £10m of savings.

Giles Wilson, chief executive of the company, said: “The overall aviation market is having a difficult year. This inevitably is having an impact on our full year outturn.”

Yet he said he believed “in the structural growth dynamics within our industry and all historical data points to recovery”.

Wilson said he has “taken a number of actions to right size the business”, including restructuring its commercial teams.

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In May John Menzies appointed Christian Kappelhoff-Wulff, a Swiss investment fund manager, to its board as part of an effort to restructure the company.