Hogg Robinson blames business travel dowturn for falling profits

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In its financial report for the six months ending September 30, the corporate travel services company reported pre-tax profits of £3.3 million, down from £6.1 million for the same period last year.

Its revenue had also fallen from £177 million to £155.3 million, although it had reduced its net debt by £27 million.

While acknowledging that business people are trading down to cheaper forms of travel, it claimed this was having little impact on its bottom line. But less frequent travel did reduce it revenue and, as a result, it had been forced to reduce capacity.

The company had also introduced a voluntary cost reduction scheme that included reduced working hours, sabbaticals and unpaid holidays, salary reductions and voluntary redundancy.

The number of employees working from home had also increased to 180.

Chief executive David Radcliffe said: "In the middle of a tough recession we have delivered a very resilient performance. Our ability to provide our customers with excellent service, and to help them control their travel budgets, has helped to maintain our strong client retention rate and secure new wins.

"We have continued to control our cost base tightly without damaging our ability to benefit from the upturn when it arrives.

"While we have seen some early signs of stabilisation, visibility remains limited. However, we continue to believe that the group will deliver a full-year performance in line with market expectations and, looking further ahead, we believe that we are well positioned to respond as market conditions improve."