Continued global economic uncertainly has not deterred business travel, if Hogg Robinson Group’s latest figures are anything to go by.
The travel management company (TMC) posted an operating profit of £19.5 million for the first half of its financial year (the six-monthperiod until Sep 30), a 73% increase on last year's figure, with total revenue up 9% to £169.2 million, slightly better than the company had forecast.
Financial analysts were also impressed by HRG's operating profit margin, up 4.2 percentage points to 11.5%. Between 2008 and 2010 the company reduced its headcount by 16%, but has continued grow organically throughout the downturn.
The TMC expects growth to slow marginally in the second half of the year and the recruitment of more staff will impact the operating profit margin. However, HRG said it was confident that growth would continue over the coming years, and is to adjust its profit forcast for the 2011 to 2013 period by up to 6%.
Investors will also be pleased with the company’s returns, with earnings per share up 10%, from 1.6 pence to 3.3 pence.
Chief executive, David Radcliffe, said: “This is a very good set of results with operating profit up by more than 70% and EPS more than double.
“Our strategy and business model have delivered over the last two years. We have a proven management team, a disciplined approach to cost control and a relentless focus on our customers.
“As a result, we are well placed to leverage our global infrastructure and to take advantage of the improving climate and growth prospects available to us.
“Uncertainty about the global economy will continue but we are encouraged by the current signs of recovery in corporate travel and the board believes that we will be slightly ahead of our previous expectations for the full year.”
HRG said its clients total travel spend had increased by 22% year-on-year, while its client retention remains above 90%.
Radcliffe said the repatriation effort managed by HRG during the ash cloud crisis in the spring offset any losses incurred because of the disruption.