Hogg Robinson Group reported a 22% rise in half-year pre-tax profits to £18.7 million despite lower client business travel spend.
The travel management company won the business accounts of AIG, Allianz, CGI, CSL, MMG and Posten Norge in the six months to September.
This helped raise revenue by 10% to £186.8 million from £169.2 million in the first half of 2010. Net debt was down to £16.9 million from £68.9 million in September last year. But HRG reported that travel spend by clients halved from 18% to 9% at constant currency rates.
The level of client travel transaction activity rose by 7%, down from a level of 18% in the same period last year. “There is increasing evidence of clients seeking to consolidate their travel management through fewer locations,” HRG said.
“This is often part of a general move by companies to move to a more centralised model for all outsourced services. In the case of travel management, this trend is increasing as companies look for greater policy compliance, security monitoring, consistency of service and economies of scale.
“We anticipated this trend and continue to develop our multi-country service capability through fewer locations. Risk and security advice has also become a priority for many of our clients, especially since the earthquakes and tsunami in Asia Pacific and during the period of ongoing civil unrest in certain countries in the Middle East and North Africa region.”
Chief executive David Radcliffe said: “The strong first-half performance continues the momentum we reported earlier in the year.
“This steady and consistent growth serves to highlight the strength of our business model, which is underpinned by our ability to help clients maximise the value of their corporate travel budgets.
“Our strong cash flow has reduced net debt over the last 12 months and recently we have reached a positive agreement with the UK pension trustees which provides greater certainty regarding funding.”
He added: “We remain mindful of prevailing macroeconomic uncertainty but have confidence that our compelling customer proposition, strong foundations and momentum will see HRG deliver a full year in line with expectations.”