Hogg Robinson Group (HRG) made pre-tax profits of ”25.2m ($49.5m) for the year up to 31 March but reported mixed success in Europe, a sharp loss in the US and drop in demand for meetings and events management.
Underlying operating profit in Europe was down ”4m to ”32.6m - though 2007 business had been boosted from the FIFA Football World Cup, so a fall was perhaps not surprising - with client confidence dented towards the end of the year by the credit squeeze.
And it was a ”challenging year” in the North American, with a ”1.8m 2007 profit switching to a ”1.3m operating loss. This was put down to a restructuring of operations, with implementation costs for new clients and continued investment in capacity and infrastructure contributing to the decline.
”There is significant pressure on margins in this very competitive market and we will continue to improve the efficiency of our service delivery,” read the HRG statement.
Asia Pacific region performed strongly throughout the year with an underlying operating profit up ”1.1m due to a strong performance in Australia.
HRG CEO David Radcliffe said: ”Despite the difficult market conditions, we have been able to report revenue growth through good client retention and new client signings. We continue to work hard to position the business for the future and are clearly focused on improving the efficiency of service delivery across the company. The economic climate remains uncertain but our positive momentum gives us confidence that the year ahead will be one of growth.”
Weaker demand in HRG”s Events & Meetings Management activities and unmanaged corporate (SME) clients - particularly in Europe ” was also experience towards the end of the year, and the company chairman John Coombe said the general economic downturn was detected ”too slowly.”
”Managed travel has historically been more resilient than unmanaged travel in times of economic uncertainty,” he added. ”However, no business can be immune to the fallout from the continuing crisis of confidence in financial markets. Certainly, we began to see some changes in the final quarter of the financial year and some of our managed clients, particularly those in financial services, have sought to reduce their overall travel expenditure.”