News distribution group Menzies(john) (LON:MNZS) said this morning that it had a strong first half-year with underlying profit before taxation up by over 46% to £19.3m. Group turnover in the period increased by 11.8% to £984.7m. The group enjoyed a significant improvement in the cargo market with like for like volumes up 24.8%, and additional contract gains in Ground Handling, helped profits at Menzies Aviation more than double to £9.1m with turnover rising by 13.8% to £300.9m.
At Menzies Distribution sales of World Cup related stickers, continuing cost initiatives and the contribution made from the new contracts gained during 2009 helped profits to increase by 7% to £14.5m, with turnover increasing by 11% to £683.8m. Corporate costs and interest costs were both held at prior year levels.
Operating cashflow was £32.2m, an increase of £8.4m on 2009, mainly due to higher profits in the period. Free cashflow also increased to £20.6m. Net capital expenditure in the period was well below depreciation and also lower than the previous year. Foreign exchange rates in the period were broadly neutral, increasing net debt by only £1.5m. After the payment of the dividend in April in respect of the financial year 2009 of £4.7m, the net cashflow for the Group was £12.2m. This reduced net debt at the half year to £121.6m.
The net debt to EBITDA ratio at the half year reduced further to 1.9 times as a result of lower net debt and higher profits. Our interest cover increased to 7.3 times. A £20m facility which expired at the end of June 2010 was no longer required and was not replaced. All remaining facilities are secured until November 2011 or beyond.
There was an exceptional credit of £4.6m in the period resulting from some members of the main UK pension scheme exchanging future non-statutory increases in pension for a higher fixed pension. The Board is declaring an interim dividend of 5p which will be payable in November 2010. No interim dividend was declared this time last year but an interim dividend in lieu of a final dividend of 8p per share was declared in March 2010.
© 2010 Stockopedia Limited and Stockmarketwire.com. All rights reserved
