Baggage handling firm John Menzies takes £9m profit hit from coronavirus

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
John Menzies warned on the impact of coronavirus on its profits. (John Menzies)

Businesses continue to feel the impact of the coronavirus epidemic, with an air service company, a bank, and a car manufacturer all warning about effects on their businesses on Thursday.

John Menzies (MNZS.L), which provides cargo handling and airplane refuelling services, said on Thursday the spread of COVID-19 was “having a direct impact” on operations.

The COVID-19 epidemic has led to travel bans in parts of Asia and significantly dented demand for air travel globally. John Menzies said its operations in Macau and work with Chinese airlines around the world has significantly tailed off as result.

“The situation is still evolving, and we only have limited visibility of what flight schedules are being impacted into March and beyond, so it is difficult to assess how extensive the impact could be at this point,” the company said in a statement. 

“However, the Board currently estimate that there is likely to be an adverse profit impact in the year of approximately £6-9m [$8-12m] on the assumption that the impact of the virus subsides towards the end of quarter two.”

Shares in the company fell 5.7%, amid a wider market sell-off.

Read more: Stocks rout resumes as coronavirus cases continue to rise

John Menzies joins the growing list of businesses facing disruption from the COVID-19 epidemic. The likes of Starbucks and H&M have been forced to shut shops across China, while Apple (AAPL) has warned of disruption to iPhone manufacturing.

Luxury car maker Aston Martin (AML.L) said on Thursday the epidemic could disrupt its supply chain and dent demand in China, which accounts for 9% of sales. However, it said impact had been limited so far.

Separately, Asia-focused bank Standard Chartered (STAN.L) said the virus was causing problems for its business in Hong Kong, where it has a significant branch network. Standard Chartered said the outbreak “comes with unpredictable human and economic consequences”.

Stocks around the world have sold off sharply this week amid concerns about the economic impact of coronavirus. European markets opened down over 2% on Thursday.