Coronavirus: John Menzies warns of profits hit

John Menzies said the virus was already having a direct impact on its business

Global aviation services firm John Menzies has warned that the coronavirus outbreak is likely to shave millions of pounds off its annual profits.

In a trading statement, the company reported the virus was already having a direct impact on its business.

It said its operations in Macau and sites across its network which handled Chinese carriers had been hardest hit.

It expects to take a hit of £6m to £9m, assuming the virus's impact subsides towards the end of the second quarter.

More than 80,000 people in about 40 countries have been infected with the coronavirus, which emerged in December. Most of the cases are in China.

Macau, which is a major gambling hub and tourist destination in southern China, has been badly affected by the outbreak.

Its casinos were forced to close for 15 days earlier this month in order to contain the spread of the virus after a hotel worker was infected. Bars, cinemas and other venues were also affected.

Macau's casinos were forced to close for 15 days as a result of the coronavirus outbreak

In its statement, Edinburgh-based Menzies said: "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.

"However, the board currently estimate that there is likely to be an adverse profit impact in the year of approximately £6m-£9m on the assumption that the impact of the virus subsides towards the end of quarter two.

"Wherever possible, mitigation actions are in place along with a tight control on costs and expenditure."

It added that while the situation was "disappointing", the group was "well positioned to manage it effectively and return to our positive growth trajectory for this year and beyond".

Meanwhile, the UK's biggest protective packing firm is the latest company to outline contingency plans in case of disruption caused by the spread of the virus.

Glasgow-based Macfarlane Group has been looking at alternative suppliers in case of supply problems.

Macfarlane said it had a "Plan B" should the coronavirus outbreak cause issues for the company

Chief executive Peter Atkinson told the BBC's Good Morning Scotland programme there had not been any issues so far.

He said: "We source about 3% of our products from China and about 1% from Italy.

"We are working with our suppliers in those countries to find alternative options. At the moment the system is working fine but we have got a 'Plan B' if we have issues.

"We are currently talking to suppliers in Turkey, Greece and India to effectively replace (in the) short-medium term the current suppliers if there are any issues."