JOHN Menzies has appointed Dermot Smurfit as independent chairman of the group following the resignation in May of Iain Napier.
Shareholder Value Management – one of group of activist investors that holds a combined 27 per cent of Menzies shares – had earlier this month called for the interim chairman Dermot Jenkinson to be replaced. He stepped into the role upon Mr Napier’s departure and is believed to have close ties to the Menzies family, which still controls 20 per cent of the group.
The appointment will alleviate some of the pressure on the board from the activist shareholders, who are calling for the group’s aviation and distribution businesses to be split.
Mr Jenkinson, who will remain as a non-executive director, said he was delighted to appoint a chairman of Mr Smurfit’s calibre.
“The obvious qualities that Dr Smurfit possesses and his availability to assume the chairman responsibilities immediately meant I was happy to recommend his appointment. I am confident that Dr Smurfit will be a great asset to the group."
Mr Smurfit is currently chairman of Powerflute and ML Capital and is a non-executive director of Timber Capital and The Forest Company. He has held a number of positions within the Jefferson Smurfit Group and was latterly deputy chairman and world vice president of sales and marketing.
The appointment comes amidst a period of executive turmoil at the company that has left it without a chief executive since Jeremy Stafford resigned his £400,000-a-year post in January after just 15 months. He was the group’s first chief executive in seven years.
The company also lost its finance director this month, following Paula Bell’s decision to join Spirent. Giles Wilson was appointed to replace Ms Bell.
Mr Smurfit said he was “honoured and proud” to have been appointed. He will assume the role following a board meeting on July 25.
“John Menzies which is an exceptionally strong brand highly trusted by its customers and look forward to assisting the group in achieving significant growth in the coming years," he said.
Mr Smurfit takes the helm of a business that is under increasing pressure to break in two. The activist shareholders believe such a move would increase its overall market capitalisation. Earlier this month Chicago-based private equity group Kabouter Management crossed the 12 per cent threshold. It is backed by Swiss investment fund Lakestreet Capital Partners, which owns 8.56 per cent, and Frankfurt-based Shareholder Value Management, which holds seven per cent.
In a trading update published in May, Menzies’s aviation business saw revenue grow seven per cent in constant currencies. Ground handling was up four per cent against two per cent drop in cargo volumes.
Menzies has recently won new contracts with British Airways in Copenhagen and Virgin America at its hub in Los Angeles. It also secured preferred supplier status with Singapore Airlines, and recently announced a joint venture with Oman Air, which is set to see the companies partner on ground handling services at nine Omani airports.
Menzies Distribution saw print media sales decline four percent in the same trading period, in line with declines seen in 2015.
In 2015, revenue of £1.9 billion generated a pre-tax profit of £38m. Shares in the company are up 42 per cent since the turn of the year, closing last night at 591p.
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