THE chairman of John Menzies has signalled the company is considering a range of acquisition targets but the majority of deal activity is likely to be in its fast-growing aviation arm.

Iain Napier said the Edinburgh company has "more opportunities than it needs" but the board remains selective on which ones to pursue.

Speaking after the company's annual general meeting at the Roxburghe Hotel in capital he said: "We would do little bolt-ons in distribution where the pay-back is pretty quick but the vast majority of the opportunity is with aviation and most of it is international."

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Mr Napier said Europe, North America and South America were likely to be the main areas the company concentrated on.

He said: "We have lots of places we can invest our money.

"We try to do the best job for the shareholder. At the end of the day if you are not doing well the shareholder will knock on your door and tell you."

All resolutions at the AGM were passed with near unanimous support.

Only one shareholder question was asked and that was about the John Menzies dividend policy.

Mr Napier said the company intended to be progressive and reward shareholders but balance that with making sure business investment plans could be fulfilled.

Finance director Paul Bell confirmed the company was continuing to look to rationalise its distribution locations across the UK which deliver newspapers and magazines. She said this process would carry on during 2014 and into next year.

Mr Napier said the distribution arm remains vitally important as it generates a lot of cash.

He said: "We almost have a magical formula that one division, distribution, is throwing up so much cash and the other, aviation, has all this opportunity to spend that cash and get good returns.

"That [distribution] business is worth much more to John Menzies and its shareholders than anyone else.

"If we didn't have it we would have to go and borrow the money."

Mr Napier, who is also chairman at whisky company William Grant, re-iterated that the John Menzies board would prefer Scotland to stay part of the UK.

He said: "The opportunities we have internationally are great and we rely a lot on British consuls and diplomats overseas.

"We have just gone into Columbia and would go and see the embassy to see how things operate there and they give us a lot of good advice.

"My problem as a chairman of a plc is I don't really know what they are going to do and I can't wait 18 months while they sort it all out.

"I can't stand up in front of shareholders and say 'By the way this year I'm not quite sure what it is going to [happen]."

Mr Napier, who also expressed a personal view that neither side has yet made convincing arguments, confirmed that John Menzies has subsidiaries registered in England and could "think about operating there".

He said: "Our roots are in Scotland. We are Scottish to our bones and are very proud of it.

"We are nationalist not separatist."

Menzies said trading in the year to date in aviation was slightly down on last year partly as a result of warmer weather meaning less de-icing work.

However it remains confident of hitting full-year forecasts and said the benefits of contracts won in recent months would start to come through in the second half of the year.

Distribution was said to be performing in line with expectations and has seen some uplift through sticker sales ahead of the football World Cup.

Shares were down 10.5p, or 1.6%, at 655.5p.