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Cost savings help boost Hogg Robinson profits

Cost savings of £11.5 million over the past 18 months in the middle of a three-year restructuring helped boost half-year profits at Hogg Robinson Group.

Pre-tax profit for the six months to September 30 was up by 17% to £15.2 million as revenue rose by 5% to £163.6 million.

Newly deployed technology delivering increased productivity and improving client experience, the travel management company said.

HRG’s technology arm Fraedom saw revenue growth of 21% over the same period a year earlier.

The company revealed “mixed market conditions” across the countries it operates in with the UK showing lower trading activity.

Business travel operating profit rose by 7% due to cost-cutting, despite revenue falling by 4%.

This reflected “expected pricing pressure and increased client adoption of online self-booking of travel which has now reached 51%, compared to 49% in the same period last year,” HRG said.

Chief executive David Radcliffe said: “We have continued to deliver earnings growth as planned and we have improved our underlying operating profit margin.

“Our three-year cost restructuring programme is well advanced and is delivering significant savings.

“Newly deployed technology is helping us provide superior service to our clients more efficiently and will underpin future growth for our businesses.

“We’ve navigated the period following the Brexit referendum with minimal effect so far on our trading. However, we see a tightening in the market as our clients respond to the broader economic uncertainty.

“Our travel management business delivered a robust performance in challenging market conditions whilst Fraedom continued to grow with exciting client wins in the period.

“Following the success of our restructuring actions and technology deployment we are well placed to leverage these achievements and create strategic opportunities to develop both businesses.”

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