29 Jul 2009 07:00
29 July 2009 Hogg Robinson Group plc (`HRG', `the Company' or `the Group') INTERIM MANAGEMENT STATEMENT
Ahead of today's Annual General Meeting, Hogg Robinson Group plc, the international corporate travel services company, announces its first Interim Management Statement for the year ending 31 March 2010, covering the period from 1 April to 29 July 2009.
Group performance
Our last update to the market on 28 May 2009 was based on trading to end April 2009. Since that date, market conditions have remained challenging. The early part of the first quarter continued the pattern shown in the final quarter of last financial year with many clients reducing their travel activity. This was followed by travel bans and constraints imposed by some clients on their staff due to early concerns regarding swine flu. Recent figures released by several airlines and by the International Air Transport Association are further evidence of these trends.
The combined effect meant that client revenue in the first quarter of the financial year was approximately 7% below our expectations, excluding any currency impact.
Given the depth of the global recession, we are also seeing some pressure from suppliers as they seek to reduce their distribution costs.
We are continuing to adjust our cost base in light of these events. During the last financial year, we reduced our staffing levels and have subsequently made further reductions. We continue to monitor the Group's operating costs closely and will take further actions to lower our cost base as necessary. At this point, however, we believe that it is important to maintain sufficient capacity to be able to respond quickly when the recovery starts.
Client activity
With regards to new business, the financial year has started well with new client wins and regional extensions including BNP Paribas and Discovery Communications. In addition, we welcomed a significant new Government client following our recent inclusion in the one-stop travel management services category with the UK Government's Office of Government Commerce. We also recently secured a major contract with a financial services company in North America which we look forward to being able to reveal in the near term.
Following the merger of GDF with existing client Suez, we were delighted to add GDF following a competitive tender. We have also won competitive pitches for new contracts with a number of existing clients including Nordea. Contract renewals included Du Pont, Lloyds Banking Group, National Australia Bank and Pfizer. Our pipeline of new business prospects remains strong and continues to reflect the significant opportunities around the world.
Generally, the trend by corporates to outsource certain operational activities, including the management of travel and related expenditure, remains healthy both in the short and longer terms. In the current macroeconomic climate, where the focus for the majority of our clients remains on seeking ways to reduce their travel costs, we continue to work closely with our clients offering innovative solutions designed to reduce their overall expenditure in this important area of discretionary spend.
Outlook
We are facing challenging comparatives in the first half given that the first half of last financial year preceded the start of the current global recession. We would also point out that the majority of the Group's earnings have traditionally come in the second half of the financial year. Although forward visibility remains limited, the Group remains committed to maintaining a cost base that is appropriate for ongoing revenue whilst not damaging our reputation for superior client service.
At this early stage of the financial year, the Board considers that the Group will deliver a full-year performance in line with expectations.
- Ends - EnquiriesHogg Robinson Group +44 (0)1256 312 600 Julian Steadman, Group Finance Director Angus Prentice, Head of Investor Relations Tulchan Communications +44 (0)20 7353 4200 David Allchurch Stephen Malthouse Forward-looking statements
This announcement may contain forward-looking statements with respect to certain of the plans and current goals and expectations relating to the future financial conditions, business performance and results of Hogg Robinson Group. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that are beyond the control of HRG, including amongst other things, HRG's future profitability, competition with the markets in which the Company operates and its ability to retain existing clients and win new clients, changes in economic conditions generally or in the travel and airline sectors, terrorist and geopolitical events, legislative and regulatory changes, the ability of its owned and licensed technology to continue to service developing demands, changes in taxation regimes, exchange rate fluctuations, and volatility in the Company's share price. As a result, HRG's actual future financial condition, business performance and results may differ materially from the plans, goals and expectations expressed or implied in these forward-looking statements. HRG undertakes no obligation to publicly update or revise forward-looking statements, except as may be required by applicable law and regulation (including the Listing Rules). No statement in this announcement is intended to be a profit forecast or be relied upon as a guide to future performance.
Notes to Editors
Hogg Robinson Group plc (HRG) , the international corporate travel services company, was established in 1845 and operates from headquarters located in Basingstoke, Hampshire, UK. Its interests include owned or controlled corporate travel services operations in 25 key driver/growth markets throughout Europe, North America and Asia Pacific, which are supported by a network of contracted partners. The HRG network extends to nearly 120 countries.
HRG's philosophy is to focus on its clients, underpinned by three differentiators - its people, its technology and its breadth of service. The company has experienced management and skilled operators together with a strong reputation for technology which it develops and owns in-house. In addition HRG is the only major travel management company to offer a real breadth and depth of services, all of which combine to serve every client around the globe delivering value, cost savings, efficiency and innovation, without compromise.
HRG's portfolio of clients spans a broad range of industry sectors including but not limited to Automotive, Banking and Finance, Food Manufacturing, Media and Entertainment, Pharmaceutical, Retail and Telecommunications.
www.hoggrobinsongroup.com
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