Hogg Robinson reports profits slide

Business travel group Hogg Robinson has reported slide in profits

Business travel group Hogg Robinson has hailed its "resilience" amid the recession as it said efforts to help firms cut costs on corporate trips had limited a slide in profits.

The firm said companies across all sectors cut back on corporate travel spend in the second half of its year, leaving underlying pre-tax profits down 9% to £24.7 million in the year to March 31.

But it thanked its fee-based business model and ability to offer clients cheaper travel alternatives for helping it weather the recession so far.

Hogg Robinson has also slashed its own costs, cutting staff numbers during the year - and since the end of March - while also "consolidating" its branch network and offering employees the ability to work from home.

The group forecasts tough conditions to remain for the time being and hopes its cost reduction moves - and the fact much of its business is based on three to five year contracts - will see it through.

Basingstoke-based Hogg has been heavily exposed to the troubles in the financial sector, as one of the City's favoured travel agents - with banking and finance its largest target market.

Revenues on a constant currency basis fell 8.5% in the second half as the woes took hold, in stark contrast to the 1.8% increase seen the previous six months.

However, it said client retention had remained at 90% and added the trend for firms to trade down in an economy drive had little impact on business.

The firm's fixed-fee contract model sees it get paid regardless of the class of travel, while it has also been winning new business.

It added: "The macroeconomic downturn has created an opportunity for us, as clients become even more receptive to programme changes that can reduce their travel costs.