THE departing chairman of John Menzies said the Edinburgh-based business would not be distracted by “short-term” shareholders yesterday as he thanked staff, directors and long-term investors and insisted his exit was planned.
“The management team are not going to be diverted by some of these short term shareholders,” said Iain Napier, referring to the likes of Swiss hedge fund Lakestreet Capital Partners, which has built a significant stake in the business of more than 8 per cent since last March and has lobbied for the group to be split into two separate aviation and distribution businesses to create more value.
“We have good long-term shareholders whose enthusiasm and focus and whose experience of being in the business for a long time will stand us in good stead.”
Addressing the group’s annual meeting in Edinburgh’s Waldorf Astoria hotel, Mr Napier specifically thanked the Menzies family, who hold about 19.5 per cent of the shares. Victorian entrepreneur John Menzies started the company in 1833 as a small newsagent business. He also thanked ‘loyal’ investors including the family of Dundee-based publisher DC Thomson, who have been shareholders for more than 100 years.
Mr Napier, 67, was originally due to stand for re-election at the annual meeting but retired on Wednesday, meaning the resolution to re-elect him was withdrawn. His is the third senior departure this year. Mr Napier denied that his exit was related to a recommendation to vote against his re-election, and that of fellow non-executive Geoff Eaton, by governance advisory firm Glass Lewis. The San Francisco-based firm noted that at last year’s annual meeting none of the directors received more than 84 per cent support from shareholders, while the company’s remuneration report gained less than 50 per cent support.
“I had been there for nine years, but corporate governance code says two sets of three years is about right, so it was the right time to leave,” Mr Napier said. “The plan was always for me to go, but I had just been delaying it because, quite rightly, I wanted to help the company settle the board down. But unfortunately we lost a lot of people each time I thought about it.”
Chief executive Jeremy Stafford and finance director Paula Bell also left Menzies this year.
Interim chairman Dermot Jenkinson, 61, who joined the board in 1986 and whose wife Miranda is the great granddaughter of the founder, said the recent boardroom upheaval was “just a fact of life.”
“It’s been a stable business for years and years and suddenly changes come along all at the same time and sometimes it’s really difficult to find the right chemistry,” he said.
“We’ve got a new management team who are very, very good and I’m actually very excited and optimistic about working on these challenges as chairman.”
In a trading update, the company said it had made a good start to 2016 and trading is in line with its expectations.
Its aviation business, which runs passenger, ramp and cargo services for 500 airlines across 143 airports, increased revenues by 7 per cent in the first four months of the year.
Ground handling rates grew 4 per cent thanks to contract wins with airlines including British Airways and Virgin America, though cargo volumes were down 2 per cent against a strong comparative for the year before.
Menzies Distribution, which delivers 110 million consignments a year – including parcels and newspaper bundles – saw print media sales decline 4 per cent in line with the declines seen in 2015.
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