WHEN John Menzies completed the acquisition of aeroplane refuelling firm ASIG in February it said the deal was transformational for the business.
One set of interim results later and it is clear that this is very much the case.
Granted, it is a business used to being transformed, having begun life in 1833 as book seller which became the Scottish sales agent for Charles Dickens’ first novel.
Domestically at least, John Menzies is best known for the retail chain which left the high street in 1998. It also owned Early Learning Centre.
As it moved away from retail, a series of acquisitions led the company to create two divisions, with aviation joining its dominant distribution arm.
When people see its logo at airports, many assume it is not the same business. But now, that aviation division which launched in 1996 has overtaken its distribution division – in both revenue and underlying operating profit. Gone are the days when the aviation business needed the cashflow generated by distribution to get by.
While the future of the distribution arm is now unknown after the collapse of merger talks with DX Group, the aviation business is forging ahead, with Menzies corporate affairs director John Geddes highlighting the opportunity presented in the US, where it has gained four million inter-plane fuel turns.
That gives it a foothold to build its ground handling turns in the US, but in ditching a contract at New York’s JFK which didn’t fit with its risk and reward strategy, Menzies has shown that expansion will not come at any cost.
There is a sense that a real momentum is building in this side of the business. Menzies is a global player now, present in 213 airports across 35 countries.
Aviation is a business with enough potential to keep its board busy, yet one of its major priorities in the second half is deciding what do to with its distribution business.
Whatever it decides, 2017 marks the start of another chapter in this corporate tale.
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