A recovery in the business travel sector and continued cost-cutting boosted Hogg Robinson Group’s 2010/11 pre-tax profits by 16%.
HRG made £32.9m before tax in the year to March 31, compared with £28.4m the previous year. The result was achieved from revenue of £358m, up 7% using comparable exchange rates. Operating margins improved from 10.8% to 11.7%.
HRG chief executive David Radcliffe said client activity had increased by 17% and spend by 23% during the 12-month period following a “steady recovery” across all regions, particularly in Asia Pacific and North America. Radcliffe added that Europe overall had shown “some recovery” but said the pace of this varied by country.
Events during the financial year included the first Icelandic volcano eruption, soaring fuel prices, the severe winter weather and the Japanese earthquake. HRG said these challenges had highlighted the usefulness of travel management companies.
“It is often at times of crisis and severe disruption that our clients come to appreciate the true meaning of ‘travel management’ and the high quality of our service,” said Radcliffe.
He added that a cost reduction programme put into place during the recession was still reaping benefits.
“As a result of this disciplined approach, average revenue per head rose by 7% at constant currency,” he said.
Radcliffe said he expected the positive outlook to remain.
“Since the year end we have continued to trade ahead of last year and expect to make further progress through the rest of the year,” he said.
HRG recommended that dividends rose 25% to 1.5p per share. HRG shares were this morning down 1p on yesterday at 58p.