Menzies(john) Share Discussion Threads

[buffettjnr] 12/11/2019 13:11

Back in this one...its been ages...let's hope it works better this time.

[pottsypotts] 01/11/2019 14:48

Hopefully the start of a climb, good start on an otherwise flat day

[f15jcm] 08/10/2019 16:50

From BBC today: The union Unite has warned that the collapse of Thomas Cook is now resulting in serious job losses in the holiday firm's supply chain.This week Aviator, which undertook ground handling operations for Thomas Cook's airline at Manchester airport, announced it was preparing to go into administration and would cease trading on 22 October with the loss of 351 jobs.Unite also understands that as a result of Thomas Cook’s collapse that ground handlers Swissport at Bristol and Menzies at Gatwick have announced potential redundancies

[f15jcm] 01/10/2019 13:04

Hell of a lot of stock to buy in a company that's up to its eyeballs in debt. Aviation seems to be one continual bad news story. Surprised they haven't made a statement about Thomas Cook. They were definitely a customer so there will be some fallout, material or otherwise.

[1gw] 01/10/2019 08:18

Although the optics might have been better if the exec chairman purchase had been made after the (market sensitive?) rns rather than just before.

[pottsypotts] 01/10/2019 08:10

Positive contract renewal notice and a very large purchase last week from the director, as they sat on Dragons Den " I'm in"

[f15jcm] 24/9/2019 18:59

gordongekko4, you were correct about that and some. How did you know that? Were you at the AGM?

[f15jcm] 23/9/2019 06:51

There appears to be some exposure to Thomas Cook here. No doubt some invoices will be going unpaid.

[gordongekko4] 17/9/2019 16:09

following today's general meeting, the new executive chairman Philipp Joeinig will most likely purchase 850.000 shares of John Menzies Plc in the open market. Share price will undoubtedly go up as a result!

[gordongekko4] 22/8/2019 18:13

John Menzies needs private owner to make most of aviation-services consolidation – shareholders
14 August 2019 | 16:20 UTC

* Swissport and WFS owner Cerberus possible suitors
* Shareholders suggest acceptable sale price near 750p/share
* Management “frustrated221; with performance, shareholder says

________________________________

John Menzies [LON:MNZS] could be an aviation-services sector consolidator but may need a new private owner if is to continue to grow by acquisition, with possible backers including Swissport and Cerberus Capital Management, according to two investors interviewed by this news service.

The company would be more able to pursue a growth strategy if taken private since it would need to increase its leverage to a level typically unacceptable to public market investors, the first shareholder, and a second, who is a minority investor, said. Now is the right time for John Menzies to look for a buyer, the first shareholder said.

The shareholder sentiment echoes the views of activist investor Sterling Strategic Value, which told this news service in June that the company should consider integrating into a larger group. The rumour of a sale of the business has been around for years and is possible, a sector banker commented. Activist funds including Lakestreet Capital, Kabouter Management and Shareholder Value Management have successfully pushed the company to separate its distribution business, which it sold last year.

Investors have been disappointed by management’s progress with John Menzies’s aviation business since it was split from the distribution business, the first and second shareholders said. Some of the company’s headwinds have been beyond management’s control, the second shareholder said; these include the downturn in global trade volumes, as cargo services make up around 25% of the company’s revenues. Other issues, such as the company’s anaemic growth rate in the UK and the fleeting tenure of Forsyth Black as chief executive, have been its own fault, he said.

John Menzies is “not a dog’s breakfast” and can improve performance, said a third shareholder, who is a minority investor. If the company fails to perform better within 12 months, it will be vulnerable to a takeover, the second shareholder said.

Valuation and potential suitors

An offer just above 9x EV/EBITDA would be welcome, this shareholder said. Peers such as Swissport and Worldwide Flight Services (WFS) were acquired at between 9x and 14x EV/EBITDA, he noted, adding that he would not expect to realise a price at the top of this range. At 9x EV/EBITDA, John Menzies would be valued at 717p/share, and at 10x it would be valued at 826p/share, according to analytics by this news service.

Any acquirer would need to offer 750p/share, the first and third shareholders agreed. However, John Menzies’s recent operational issues mean the market may not yet be right for an offer at that price, the first shareholder said. The third shareholder said he has yet to decide whether to support the push for a sale, but would tender for an offer above that price. Any offer “has to be a wow”, he said.

John Menzies' current EV/EBITDA multiple is 6.4x, or 6.1x prior to a c. 7% up-tick in the stock’s value on 14 August after the company reported its interim results.

HNA bought Swissport at a 0.9x EV/sales multiple, and Cerberus bought WFS last year at 1x EV/sales, according to an analysis by this news service. John Menzies’s current EV/sales multiple was 0.4x prior to the 14 August share-price jolt.

WFS is one of the largest cargo players with a smaller amount of ground handling, while John Menzies is mostly ground handling with some cargo, so “they are a perfect fit,'' the first shareholder said. In a weak market, ground handling is more resilient than cargo, which makes the combination a good option for WFS and Cerberus, this investor added.

After Cerberus bought WFS for EUR 1.2bn, Cerberus and Brookfield subsequently attempted to buy HNA Group-owned Swissport, but the sale stalled as HNA looked to refinance its subsidiary’s debt instead, according to media reports. John Menzies would be the next logical option for Cerberus after trying to buy Swissport, the first investor said.

Swissport itself is the largest strategic player in the aviation-services sector, with John Menzies in second place, according to the latter’s own reporting. It would therefore be a logical buyer in a consolidating industry, the first and second shareholders said.

As of July, John Menzies has a new chairman in Phillip Joeinig, who has an “astounding221; track record over almost a decade at Swissport, the first shareholder noted. The second shareholder said he will soon meet Joeinig for the first time.

Previous talks with the company’s directors have been “always quite frank”, the second shareholder said. He finds them receptive to shareholder concerns, he said, and they, too, are “frustrated221; with the company’s performance.

John Menzies, Swissport, Cerberus, Kabouter, Lakestreet and Shareholder Value Management did not respond to requests for comment.

by William Mace, Deane McRobie and Sofia Okun in London, with analytics by William Cain

[f15jcm] 13/8/2019 17:33

Debt becoming an issue. One profit warning off tapping shareholders for cash.

[1gw] 13/8/2019 07:21

Poor 1H results, but expectations apparently unchanged for 2020. We can hope.

[1gw] 08/7/2019 07:12

Good to see the PDMR (and Lakestreet) buying on Friday. Some of the quantities relatively modest, but Lakestreet and the Garmans buying good chunks. Perhaps trying to send a message.

[1gw] 05/7/2019 14:17

I've come off the fence and sold some at just over 416p there.

[f15jcm] 05/7/2019 12:47

After annual results, Investors Chronicle gave this a sell rating: "Menzies is highly leveraged, so an enterprise/cash profit (EV/Ebitda) multiple provides a clearer indication of what value is being placed on the underlying business. On this basis, the shares are significantly overvalued, so despite encouraging renewal rates, we think the shares could come under pressure."

Outsourcing in't a good sector to be in. Coupled with debt, a CEO resignation and a profit warning, I can't understand why you'd want to own this share. Wording of the statement didn't provide any guidance and left room for revision to the downside.

[1gw] 05/7/2019 12:24

Impressive come back. I sat on my hands while the knife was falling waiting for it to find a level. After reading the TU I thought £4 felt about right - i.e. around a 10% fall - for the profit warning, given the share price appeared to have been discounting bad news for some time. Although price discovery has been a bit difficult with recent trading patterns - lots of tiny trades moving the share price about and then a bigger uncrossing trade which tended to move it somewhere else.

Now we're back above £4, I'm moving back towards thinking about selling some.

[tsmith2] 05/7/2019 11:46

another at cracking £4?

[tsmith2] 05/7/2019 09:00

£4 paid kicking myself for not buying. Think this may well reverse most of not all of the early fallNo position

[tsmith2] 05/7/2019 08:53

PE of 10 on trough earnings undemanding, attractiveNo position

[f15jcm] 05/7/2019 08:52

Looks like debt is becoming a problem to me. 2.1x EBITDA at last year end, now looking at lower earnings. Profit warnings are rarely one offs. Is the new CEO up to the job?

[1nf3rn0] 05/7/2019 08:48

The rate this has been dropping since last summer you'd think no YOY growth was already factored in. This looks like the capitulation stage before recovery.

[1gw] 05/7/2019 08:30

I was going to sell some after that TU, which appears to indicate things got quite a bit worse from end-April (when they were "on track" according to the AGM statement). But given the markdown, I think I'm more likely to add now. It seems to me they're guiding to approx. the same as last year. As long as they mean adjusted earnings (continuing business) that doesn't to me seem to warrant such a severe markdown.

[blueball] 05/7/2019 08:28

350p incredible.

[cwa1] 05/7/2019 07:26

Indeed, very disappointing.

[jurgenklopp] 05/7/2019 07:24

Disappointing update.