Menzies van

Menzies Distribution saw sales fall 1.7% in 2013

Menzies Distribution has posted a fall in full-year sales and profits as newspaper and magazine sales continue to drop.

Pre-exceptional operating profits fell 11.6% to £24.3m on sales down 1.7% to £1.3bn in the year to 31 December 2013, the newstrade wholesaler said.

Describing the magazine market as “weak”, it said overall magazine sales fell 9.2%, or by 8.2% on a like-for-like basis. Weekly titles fell 10.5% due to falling volumes and title closures, while monthly titles fell 7.5%.

Collectibles were hit by the absence of a major football tournament.

Newspaper sales, however, were ahead of expectations. They rose 1.5%, but fell 2% on a like-for-like basis, due to cover price growth.

Despite the sales declines, Menzies said that during the year it had secured more than 80% of revenues to 2019 through contracts with major publishers. It also achieved cost savings of more than £5m.

It also revealed that to address volume decreases, it would accelerate its branch rationalisation plans.

“As a result a number of newspaper packing spokes will close and magazine packing will be centralised into a smaller number of hub locations,” the company said.

Menzies Distribution’s parent company John Menzies, which also has interests in aviation, reported a 2.6% drop in pre-tax profits to £53.1m on sales up 0.2% to £2bn.

It blamed the profit fall on its decision to focus on “driving growth from aviation-related activities against a backdrop of a structural decline in print media”.

“During 2013 our aviation services business continued to demonstrate its growth credentials, improving profit by 11%. We have continued to invest for growth, acquiring three businesses which extend our global footprint and further develop relationships with airlines,” said chairman Iain Napier.

“In distribution, we continue to make significant efficiency improvements and had a successful year renewing contracts with publishers, although overall profit was impacted by weak markets. I am confident that the group is on a firm financial footing and we are well placed to grow our business while delivering returns for our shareholders,” he added.