John Menzies, the aviation services business has revealed that trading during the second quarter of the year has been ahead of the low expectations set out on 27th March.
With ground handling and fueling related activities down by 75% year-on-year during April and May, Menzies faced a shortage of revenue. However, it claims that its moves to place close attention to cost management and ‘effective’ mitigating actions saw performance in April and May ahead of what it was expecting.
In reassuring investors over its ability to continue to operate despite the shortfall in demand, the company claimed it has enough financing to support it throughout the rest of this year and into 2021.
It is hopeful that demand for its services will gradually return in a few weeks from early July. Banking on thriving when some form of normality returns to the aviation sector, it expects that it will benefit at the expense of its some of its rivals (who it implies may go bust) should it emerge with its scale of offering preserved.
Commenting on twitter, financial author Rodney Hobson noted that John Menzies could be a recovery play for investors are who willing to stick it out for the long-term – noting the shares haven’t gained much since lock down:
John Menzies trading no worse than feared at last update, some hopes now flights being resumed, has enough cash to survive. Shares have recovered comparatively little of covid crash and worth a look if you are prepared to play long game. Some competitors could go bust.— Rodney Hobson (@RodneyHobson) June 22, 2020
John Menzies share price increased by double-digits following the announcement, but closed the day up by 7% at 154.60p.