Hogg Robinson weathers tough economy with cost cutting plan

 
Marion Dakers
HOGG ROBINSON yesterday kept its annual profits broadly flat on last year, as cost cutting measures offset a fall in revenues.

The group, which provides travel, expenses and data management to corporate clients, said that it is trading in line with forecasts despite the tough economic climate.

The firm said its customers were booking fewer trips, but that it continued to pick up new corporate contracts including work with Unilever, Clifford Chance and the Canadian government.

Revenues in the year to the end of March fell eight per cent to £343.2m, while pre-tax profits were stable on a year ago at £38.3m

Turnover in Europe, where the firm makes around two thirds of its sales, fell 6.9 per cent to £233.3m, while revenues in Asia Pacific were down 11.6 per cent at £26.8m.

Asia was hit particularly hard by a slowdown in global demand for natural resources, which make up a large chunk of the Australian economy.

But the group’s margins rose during the year from 12.6 per cent to 14.2 per cent thanks to cost pruning. The firm trimmed its operating expenses by 9.9 per cent to £298.4m.

“We have remained focused on maintaining a cost base that is appropriate to the market backdrop while ensuring that our usual high standard of client service is not compromised,” said chief executive David Radcliffe in a statement yesterday.

The firm cut seven per cent of its staff over the year and shifted more bookings online.

The company said that its pension deficit grew from £146m to £159m and that it was in talks to close its defined benefit scheme.

But Hogg Robinson said it will raise its dividend by five per cent to 2.1p per share.

Analysts at Canaccord Genuity said the results came in slightly ahead of their expectations, but downgraded their forecasts to account for a pension accounting change.