UPDATE 1-John Menzies lifts FY forecasts as trading strong

* Says FY results to be 'well above' expectations

* Shares up 8 percent

(Adds detail)

LONDON, Nov 11 (Reuters) - Newspaper distribution and aviation services firm John Menzies (MNZS.L) Plc said its full year results would be well above current expectations following strong trading and cost cutting initiatives.

The company said on Wednesday its distribution business had benefited from the award of substantial contracts in the second half of the year following the administration of Surridge Dawson which have significantly expanded the business.

Menzies said the rate of deterioration in its aviation business appears to be levelling although cargo volumes remain significantly behind last year.

In an interview with Reuters, Finance Director Paul Dollman said the company was guiding analysts to raise forecasts for operating profit by about 4 million pounds ($6.70 million).

"The consensus for aviation was about 12 million and we are now saying at least 14 and the consensus for distribution was about 25 million and we are saying it is going to be nearer 27," he said.

Dollman added that the company had focussed on cutting costs and reducing debt during the period and had raised 15 million pounds through the sale and re-financing of assets.

"Right across both divisions, I think a lot of companies are saying the same thing, it is all a focus on costs. It is a slower decline and costs that are the two key factors," he said.

Numis reiterated its buy recommendation and lifted its target price for the stock to 423 pence from 411.

The broker also raised 2009 pre-tax profit to 31.5 million pounds from 27.5 and for 2010 33.6m from 32.5.

"The Q3 trading update was positive with further progress in both divisions and again primarily driven by self-help," Numis analyst Mike Murphy said.

The company's shares were trading at 346.75 pence at 0903 GMT, up 8.4 percent, valuing the business at 209 million pounds.

(Reporting by Neil Maidment; Editing by Matt Scuffham)