The loss of key airport ground handling contracts and failure to win a tender in Spain were cited as reasons for a steep decline in John Menzies’ profits.
The logistics and distribution firm recorded a 58.6% slump in half-year earnings to £5.8 million, down £14 million on the same six month period last year.
The firm said reduced volumes at Heathrow due to terminal changes after the closure of Terminal One contributed to reduced operating profit as well as the loss of ground handling contracts in South Africa and Spain last year.
According to The Times this saw half of the firm’s airline business and a quarter of its profits being wiped out and a £4.7 million write down in the company’s assets.
The firm, which has aviation and distribution divisions, also failed to secure a contract with the Spanish airport authority Aena and said it was looking to “other opportunities across the network”.
Jeremy Stafford, chief executive of John Menzies, who ordered a £2 million reorganisation and rationalisation programme, said:
“Our transition plans are on track and progressing well, although the first half of the year has been challenging as we continue to address the operational issues that arose during 2014.
“In terms of group full-year performance, as we previously highlighted, profits will have a greater second half weighting this year as we continue to transition the business. There is a great deal of potential across the business and we remain on track.”