(Corrects to add dropped word "Scotland" to the bank's name in
paragraph 4; corrects typo in paragraph 6)
* Says hopes for 'no' vote on Scottish referendum
* Says UK ground services revenue to be "significantly down"
* Sees 4 mln stg hit to year profit due to currency moves
* Shares fall 3 pct in early trading
By Esha Vaish
Aug 19 Edinburgh-based John Menzies Plc
says it hopes that Scotland does not split from the United
Kingdom as Scottish companies will have more opportunities if
Britain is not split up.
"We don't actually think Scotland should be independent,"
Finance Director Paula Bell told Reuters. "We'll be so glad to
get back to normal when it's all over and hopefully the voters
will vote for no independence."
Recent opinion polls have suggested Scottish separatists are
closing the gap on their unionist rivals ahead of the Sept. 18
referendum, though a rejection of independence still looks more
While some Scottish firms such as Royal Bank of Scotland
Group Plc are mulling options if Scotland goes it alone,
Bell said John Menzies would wait till the results to decide
whether it needed to change.
The company reported on Tuesday a 9 percent fall in
first-half profit as a strong pound hit its aviation business,
which carries out work such as baggage handling.
Its shares fell 3 percent to 622.62 pence by 0850 GMT on the
London Stock Exchange.
John Menzies said it expected full-year earnings from its UK
ground-handling business to be "significantly down" from last
year due to the loss of some British Airways business
at Heathrow airport in London.
Apart from baggage handling, the aviation business handles
ticketing, check-ins, aircraft de-icing and runs VIP lounges.
John Menzies did not say how much its UK aviation business
contributes to overall earnings or revenue or give an estimate
of how the UK aviation business woes would affect overall
earnings this year.
The company has expanded its aviation business, whose
customers include British carrier easyJet and Germany's
Lufthansa, as dwindling demand for publications
constrains growth in its larger distribution business.
Excluding the impact of currency movements, turnover in the
aviation services business rose 7 percent to 386.3 million
pounds in the six months ended June 30. Revenue in the
distribution business rose marginally to 638.7 million pounds.
"While the structural growth drivers in aviation remain in
place, price pressure and challenges in UK ground handling at
Heathrow airport ... lead us to lower our forecasts for full
year 2014," Numis analyst Steve Woolf said.
The brokerage cut its forecast for 2014 profit before tax
and amortisation by 5.8 percent to 47.3 million pounds.
The company's first-half underlying pretax profit dropped to
20.7 million pounds ($34.6 million) from 22.8 million pounds a
Turnover rose 2.7 percent to 1.03 billion pounds in constant
currency terms, helped by a net increase in airline service
John Menzies said it was using forward contracts to minimise
the impact of adverse foreign exchange movements, but sterling's
gains against currencies such as the U.S. and Australian
dollars, South African rand and Indian rupee were still hurting.
The company expected full-year profits to take a hit of
about 4 million pound due to currency translations, Bell said.
The pound rose more than 3.3 percent against the
dollar in the first six months of the year.
($1 = 0.5980 British Pounds)
(Editing by Gopakumar Warrier and Rodney Joyce)