John Menzies, the parent company of Menzies Distribution, has warned its current year results will be “slightly lower than previously expected” due to poor trading conditions in its newspaper and magazine wholesale arm.
In a trading update released this morning for the four months to 31 October, it said that although magazine and newspaper volumes were at the same levels announced earlier in the year “disappointing returns from ancillary revenues, sticker collections and weaker-than-forecast seasonal sales within the marketing services business are expected to impact the second-half result”.
Menzies Distribution reported a 10.8% fall in magazine sales and a 1.8% fall in newspaper sales in the six months to 30 June.
To counteract falling volumes, the wholesaler has been diversifying away from core newspaper and magazine distribution, including creating a new division to make the most of its fleet after its newspaper and magazine deliveries have been made.
John Menzies added: “The group continues to maintain a strong balance sheet, with positive cash generation which leaves it well placed to support medium-term growth ambitions.
“Looking ahead, we know our markets; we have experienced management teams and have a clear strategy to deliver growth. The board remains confident in the group’s future and believes it is well placed and appropriately financed to deliver further shareholder value.”