Take a trial of UK to unlock this pageFind out more

« All RNS

HOGG ROBINSON | Hogg Robinson Grp Half Yearly Report | RNS

TIDMHRG

27 November 2009

Hogg Robinson Group plc

(`HRG', `the Company' or `the Group')

Half-yearly financial report for the six months ended 30 September 2009

A resilient performance in challenging conditions; well placed for the economic
recovery

Summary of results

Six months ended 30 September

2009 2008 Change

Revenue GBP155.3m GBP171.0m -9.2%

Underlying earnings (1)

- Operating profit GBP11.3m GBP13.0m -GBP1.7m

- Profit before tax GBP7.5m GBP7.8m -GBP0.3m

- Earnings per share (p) 1.6p 1.5p +0.1p

Reported earnings

- Operating profit GBP7.1m GBP11.3m -GBP4.2m

- Profit before tax GBP3.3m GBP6.1m -GBP2.8m

- Earnings per share (p) 0.6p 1.1p -0.5p

Net debt GBP96.0m GBP123.0m GBP27.0m

Note

(1) Before amortisation of acquired intangibles and exceptional items

Financial Highlights

* Revenue decreased by 9.2% to GBP155.3m

- down 15.0% on a constant currency basis

* Underlying profit before tax broadly unchanged

- operating expenses reduced by 15.1% at constant currency

- operating profit margin broadly unchanged at 7.3%

* Underlying EPS up 6.7% to 1.6p

* Net debt of GBP96.0m; down GBP27.0m from September 2008; reflects continuation
of working capital management programme

* Interim dividend of 0.4p per share; equivalent to one third of last year's
annual dividend; in line with previously announced dividend policy

Operational Highlights

* Clients continuing to travel; HRG helping them to control travel spend

* Client retention rate remains above 90%; net new business wins over the
period

* Cost base actively managed and at appropriate level

* Europe - restructuring of branch network; exceptional charge of GBP2.3m

* North America - benefits from cost reduction measures taken in FY09

* Asia Pacific - profitability maintained

* Spendvision revenue up 24% at constant currency; exciting new partnership
with Visa

Outlook

* Early signs of stabilisation, but prepared for the economic climate to
remain challenging

* Maintaining a disciplined approach to control of the cost base

* Full-year performance anticipated to be in line with market expectations

David Radcliffe, Chief Executive of Hogg Robinson Group plc, 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 net new wins.

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

Whilst 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."

Contact Details

Hogg Robinson Group +44 (0)1256 312 600

David Radcliffe, Chief Executive

Julian Steadman, Group Finance
Director

Angus Prentice, Head of Investor
Relations

Tulchan Communications +44 (0)20 7353 4200

David Allchurch

Stephen Malthouse

A briefing by conference call for analysts and institutional investors will be
held at 0900h GMT today. For conference call details, please contact Tulchan
Communications on +44 (0)20 7353 4200. The presentation slides used in this
briefing will be available at http://investors.hoggrobinsongroup.com/hrg/en/
investor-relations/presentation from 0845h today.

A replay recording of the conference call will be available via audio webcast
and podcast at http://investors.hoggrobinsongroup.com/hrg/en/investor-relations
/presentation later today.

Notes to Editors

Hogg Robinson Group plc (HRG) (LSE: HRG), the international corporate travel
services company, was established in 1845 and operates from headquarters
located in Basingstoke, Hampshire, UK. Its interests include owned or
controlled corporate travel services operations in 25 key driver/growth markets
throughout Europe, North America and Asia Pacific, which are supported by a
network of contracted partners. The HRG network extends to nearly 120
countries.

HRG's philosophy is to focus on its clients, underpinned by three
differentiators - its people, its technology and its breadth of service. The
company has experienced management and skilled operators together with a strong
reputation for technology which it develops and owns in-house. In addition HRG
is the only major travel management company to offer a real breadth and depth
of services, all of which combine to serve every client around the globe
delivering value, cost savings, efficiency and innovation, without compromise.

HRG's portfolio of clients spans a broad range of industry sectors including
but not limited to Automotive, Banking and Finance, Food Manufacturing, Media
and Entertainment, Pharmaceutical, Retail and Telecommunications.

www.hoggrobinsongroup.com

This announcement may contain forward-looking statements with respect to
certain of the plans and current goals and expectations relating to the future
financial conditions, business performance and results of Hogg Robinson Group.
By their nature, all forward-looking statements involve risk and uncertainty
because they relate to future events and circumstances that are beyond the
control of HRG, including amongst other things, HRG's future profitability,
competition with the markets in which the Company operates and its ability to
retain existing clients and win new clients, changes in economic conditions
generally or in the travel and airline sectors, terrorist and geopolitical
events, legislative and regulatory changes, the ability of its owned and
licensed technology to continue to service developing demands, changes in
taxation regimes, exchange rate fluctuations, and volatility in the Company's
share price. As a result, HRG's actual future financial condition, business
performance and results may differ materially from the plans, goals and
expectations expressed or implied in these forward-looking statements. HRG
undertakes no obligation to publicly update or revise forward-looking
statements, except as may be required by applicable law and regulation
(including the Listing Rules). No statement in this announcement is intended to
be a profit forecast or be relied upon as a guide to future performance.

The release, publication, transmission or distribution of this announcement in,
into or from jurisdictions other than the United Kingdom may be restricted by
laws and therefore persons in such jurisdictions into which this announcement
is release, published, transmitted or distributed should inform themselves
about and observe such restrictions. Any failure to comply with the
restrictions may constitute a violation of the securities laws of such
jurisdiction.

Management Review

Overview

We have now traded for a full year during the worst global recession since the
1930s. When the recession started to take hold in October 2008, businesses
quickly began to reduce discretionary spending and, in particular, to seek
lower cost travel options. Data published by the major airlines and by the
International Air Transport Association (IATA) have revealed major declines in
both passenger numbers and spend during the past 12 months. More recently,
there are early signs that air passenger numbers and revenue have stabilised;
the latest IATA data show that international passenger travel grew for the
first time in 12 months, albeit a modest 0.3% up on the same month last year.
In general, however, market conditions remain challenging and we remain
cautious about any rapid recovery in corporate travel.

Against this backdrop, our business has performed well during the first half of
our financial year with pleasing comparisons against the prior year that had
not yet been impacted by the recession. Underlying profit before tax was
broadly unchanged and net debt was GBP27m lower.

Importantly, at HRG we work for our clients and earn the vast majority of our
revenue from fees for the work we do rather than commissions based on the value
of the travel. In the current climate, clients have been trading down to
cheaper forms of travel as well as reducing the frequency of travel. For the
most part, we see little impact from trading down, but less frequent travel
does reduce our revenue and requires us to reduce capacity.

In response to this, throughout the whole of 2009 we have been reducing our
operating costs to keep pace with lower client activity. Our commitment to high
service levels does however mean that cost reduction lags a fall in activity
levels.

Importantly, wherever possible we have endeavoured to retain the flexibility to
add capacity when the economic climate improves and our established client base
begins to travel more again. For example, our technology is allowing us to
increase the number of travel consultants working from home. We also introduced
a voluntary `Options for Change' programme which has allowed our employees to
help us reduce costs in the coming months through reduced working hours,
sabbaticals, unpaid holiday, salary reduction and voluntary redundancy.

We have continued to offer our clients creative ways to make the most of their
reduced travel budgets including self-service reservations (SSR), data and
security tracking applications to support stronger policy compliance. We are
also offering the management of video conferencing facilities for clients'
internal meetings.

Historically, the majority of the group's earnings have come in the second half
of the financial year. On a reported basis, compared to the prior year, revenue
and operating profit for the first half fell by 9.2% and 37.2% respectively.
Reported profit before tax was GBP3.3m compared to GBP6.1m, with basic earnings per
share (EPS) of 0.6p compared to 1.1p.

Overall, currency movements had minimal impact on earnings during the first
half, but did improve revenue by 5.8%. Excluding currency movements, revenue
was down by 15.0%.

Underlying operating profit, which is before amortisation of acquired
intangibles and exceptional items, was GBP1.7m lower at GBP11.3m, and the underling
operating profit margin moved from 7.6% to 7.3%. Lower interest costs helped
ensure that underlying profit before tax was down only marginally, from GBP7.8m
to GBP7.5m, and underlying EPS was 1.6p compared to 1.5p.

Following our major restructuring programme in the final quarter of last year,
we undertook two further restructuring initiatives to reduce costs in the
Nordic region and the UK which have produced an exceptional charge of GBP2.3m
during the first half. A further exceptional charge of around GBP1m is expected
in the second half to complete these initiatives.

Historically, the first half has required higher working capital which has
reduced during the second half. The free cash outflow of GBP8.7m is GBP6.7m greater
than in the prior year primarily due to the GBP5.0m cash settlement from Kuoni
included last year. Closing net debt of GBP96.0m compares to GBP123.0m at 30
September 2008 and GBP85.3m at year end. Our principal banking facility is
committed until September 2011 and we have remained comfortably within our
covenant limits.

In common with many other companies, the Group pension deficits have increased
since the year end, as positive investment performance did not offset the
impact of a lower discount rate being used to value the liabilities. The total
deficits increased by GBP62.2m to GBP127.5m since the year end although cash
contributions remain unchanged. The principal defined benefit scheme in the UK
has been closed to new entrants for several years. However, the use of periodic
market interest rates to value the liabilities at net present value will
inevitably produce volatility.

In line with our policy, the Board has declared an interim dividend of 0.4p per
share which will become due and payable on 6 January 2010 to shareholders on
the register at 11 December 2009. This represents one third of last year's
annual dividend of 1.2p per share.

Client activity

The first half was again successful in terms of client retention and new
business. Our client retention rate remains above 90% and we continued to grow
our client base with net new business wins over the period. As the economy
returns to normal and this stable base of clients begin to travel more, HRG
should benefit from that increased activity.

New clients that we welcomed to HRG during the period, and existing clients
where we have secured regional extensions, include BNP Paribas, Discovery
Communications, GDF Suez, KKR and SGS Group. We also won the Scottish
Enterprise Department to add to our other substantial government business in
the UK.

We also renewed contracts with several existing clients including Armani, BMW,
Credit Suisse, Lloyds Banking Group, National Australia Bank, Nordea, Nycomed,
Pfizer, Province of Ontario, Roche, Schlumberger, Tesco and UBS.

We are delighted to have been successful in extending our relationships with
companies that have been involved in merger and acquisition activity. For
example, we have combined service structures for companies such as Lloyds /
HBOS, Nomura / Lehman Brothers and Wells Fargo / Wachovia.

The pipeline of new business remains healthy and includes opportunities in the
Engineering, Financial, Food, Oil & Gas and Pharmaceutical sectors.

Our portfolio remains diverse, with our top ten clients accounting for 23% of
first-half client revenue and no single client accounting for more than 5%.
While Banking & Finance remained our largest client sector, it accounted for
less than 20% of client revenue.

Technology

Technology is a key element in the HRG strategy and continues to deliver
products and process improvements to its clients and to HRG itself. Our ongoing
investment in technology through the economic cycle is testament to HRG's
steadfast commitment to this area.

During the first half of the financial year, we delivered a number of new and
exciting technology products. The release of v8.0 of HRG Online, our online
booking tool, delivers greater functionality and an improved user interface. A
new reporting suite, together with travel tracker products, was introduced
during the period which enables clients to view and access their travel data
online. Client adoption of HRG's i-Suite, offering clients a gateway to HRG and
third party products, continues to grow rapidly. New versions of HRG Point of
Sale (Agency Desktop) application are currently undergoing testing and
evaluation.

Investment in our core infrastructure included a new wide area network, server
and desktop infrastructure improvements and further expansion of Internet
Protocol telephony platforms. Combined with our continuing investment in our
Universal Super Platform, we are building more efficient and flexible service
delivery.

Regional review

Europe

Six months ended 30 September 2009 2008 Change

Revenue GBP110.3m GBP128.1m -13.9%

Operating profit GBP5.0m GBP11.4m -GBP6.4m

Underlying operating profit (1) GBP8.8m GBP12.7m -GBP3.9m

Underlying operating profit 8.0% 9.9% -1.9%
margin (1)

(1) Before amortisation of acquired intangibles and exceptional items

Revenue fell by 17.9% during the period, excluding favourable currency
movements. Underlying operating profit reduced by GBP3.9m, with little impact
from currency movements, as a result of lower activity. We recognised an
exceptional charge of GBP2.3m (2008: nil) for restructuring during the period,
with a further charge of around GBP1m expected in the second half.

Our traditionally strong UK business performed reasonably well during the
period, with effective cost control in the face of lower client activity. The
number of home-based travel consultants increased steadily during the period
and now numbers more than 180. This has helped us develop our `virtual' service
network which is showing benefits in the form of increased flexibility of
telephony call-flow switching and reduced operating costs. The rationalisation
of our UK branch network continues with focus on core `hub' and `specialist'
locations in London, Manchester (rail centre), Glasgow, Leicester (hotel
reservation centre), Belfast and Farnborough (24/7 support). In September we
launched `Simply HRG' which offers a range of services to small and mid-sized
companies with an annual travel spend of up to GBP2m.

Our German business also reduced costs in line with lower client activity and
did not have the benefit from the Euro 2008 football championships reflected in
last year's results. Flexible cost reduction has been achieved by using the
Reduced Working Time Initiative introduced by the German Government to help
those employees working reduced hours. A similar scheme is being utilised in
Switzerland.

We have accelerated the consolidation of our branch network in continental
Europe, as we increasingly focus on large multinational managed clients. During
the period we reduced our network of branch offices in the Nordic region that
serve SME clients. In Sweden, we are consolidating our activities into key hubs
in Stockholm, Malmo and Gothenburg.

North America

Six months ended 30 September 2009 2008 Change

Revenue GBP34.5m GBP32.5m +6.2%

Operating profit GBP2.1m (GBP0.1m) +GBP2.2m

Underlying operating profit (1) GBP2.4m GBP0.2m +GBP2.2m

Underlying operating profit 7.0% 0.6% +6.4%
margin (1)

(1) Before amortisation of acquired intangibles and exceptional items

Revenue fell by 6.8%, excluding favourable currency movements. Underlying
operating profit advanced by GBP2.2m with little impact from currency movements.

The North American market remains very competitive and requires efficient
systems that are suitable for large scale activity. Over the past few years, we
have been investing to reduce our cost base and improve productivity through a
range of initiatives affecting front, middle and back-office functions while at
the same time adapting our service delivery to meet the needs of our new global
clients. We have also expanded the number of travel consultants working from
home, to increase flexibility and improve profitability. Together these
initiatives have helped to improve the profitability of our operations in North
America significantly.

Asia Pacific

Six months ended 30 September 2009 2008 Change

Revenue GBP10.5m GBP10.4m +1.0%

Operating profit - - -

Underlying operating profit (1) GBP0.1m GBP0.1m -

Underlying operating profit 1.0% 1.0% -
margin (1)

(1) Before amortisation of acquired intangibles and exceptional items

Revenue fell by 5.8% during the period, excluding favourable currency
movements. Timely cost reduction allowed us to keep underlying operating profit
unchanged.

In Australia we made changes to our operational structure and the business is
now positioned for, and focused on, winning new clients particularly those
based in the key international hub of Sydney. Our contract with the Queensland
Government to provide a fully-integrated travel and expense management system
is now implemented and we are seeing increasing benefit from this major
contract as activity levels increase.

In Singapore we were able to take advantage of government programmes to help
retain staff.

We have seen recent signs of a relaxation of some clients' travel policies and
are hopeful that the Asia Pacific region will be the first region of HRG's
global network to return to more normal levels of activity.

Spendvision

The Spendvision results are included in the regional figures. The expense
management business continued to grow, with revenue up by 36% to GBP5.7m,
including 12% from foreign exchange gains. In order to help accelerate future
growth, we increased investment in resources for product delivery and customer
support and this led to a GBP0.2m decrease in operating profit to GBP0.6m.

At the end of September, we announced an exciting partnership with Visa whereby
Spendvision will introduce a new global information tool that will provide
extensive reporting and expense management capabilities for organisations of
all sizes on a single scalable platform, integrating with the entire suite of
Visa B2B payment products.

Summary and Outlook

HRG delivered a resilient performance during the first half of the financial
year in a challenging economic climate. Clients continued to travel but
activity levels were lower and this impacted our revenue.

Despite some early signs of stabilisation, the market remains challenging with
limited forward visibility. We have seen some recent signs that clients are
relaxing their travel policies and starting to travel more, but it is too early
to say whether this will mark the beginning of a sustained recovery.

In the meantime, we will continue to focus on providing excellent service and
value for money to our clients. Our retention rate has remained high and we
have continued to win more new business than we have lost. Our strategy is
unchanged and the longer-term outlook for HRG and the travel management
industry remains positive. Historically, the majority of the Group's earnings
and cash flow have come in the second half of the financial year and we have
taken action to ensure that our cost base is appropriate for the coming months.

The Board continues to believe that the Group will deliver a full-year
performance in line with market expectations. Looking further ahead, we believe
that we are well positioned to respond to the market when it does recover.

Additional Financial Disclosures

Revenue

Revenue declined by 9.2% from GBP171.0m to GBP155.3m; equivalent to a 15.0% decline
excluding favourable currency movements.

Operating expenses

Operating expenses, excluding exceptional items and amortisation of acquired
intangibles, declined by 8.9% from GBP158.0m to GBP144.0m, primarily due to a 15.0%
decline in the average number of employees, offset by an increase of 6.2% from
currency movements.

Underlying operating profit

The decrease of GBP1.7m includes little impact from currency movements. The
underlying operating profit margin declined from 7.6% to 7.3%.

Exceptional items

The cost of exceptional items was GBP2.3m (2008: nil) during the period, relating
to restructuring in the Nordic operations and the UK.

Net finance costs

Net finance costs decreased from GBP5.4m to GBP3.8m, with the net pension interest
increasing by GBP1.1m and the net external interest decreasing by GBP2.7m.

Taxation

The tax charge of GBP1.1m for the current year represents an effective rate of
33% on profit before tax of GBP3.3m. The prior-year tax charge of GBP2.0m also
represents an effective tax rate of 33% on profit before tax of GBP6.1m. We
anticipate an effective tax rate for the full year of approximately 33%.

Earnings per share

After taking account of amounts attributable to minority shareholders, reported
earnings per share decreased by 46% from 1.1p to 0.6p, with no material change
to the weighted average number of shares outstanding.

Underlying earnings per share increased from 1.5p to 1.6p; this is calculated
on the profit attributable to equity shareholders before amortisation of
acquired intangibles and exceptional items, after charging taxation associated
with those profits as follows:

2009 2008

GBPm GBPm

Profit before tax 3.3 6.1

Add:

- Amortisation of acquired intangibles 1.9 1.7

- Exceptional items 2.3 -

Underlying profit before tax 7.5 7.8

Underlying tax charge (2.3) (2.6)

Underlying profit after tax 5.2 5.2

Less:

- Amounts attributable to minority (0.5) (0.7)
interests

4.7 4.5

Average number of ordinary shares issued 302.3m 303.9m

Underlying earnings per share 1.6p 1.5p

Cash flow

Free cash flow, which includes all cash flow except acquisitions and disposals,
dividends and the impact of foreign exchange movements, decreased by GBP6.0m to GBP
2.7m; this was primarily due to a one-off inflow of GBP5.0m in the prior year in
respect of a cash settlement from Kuoni. The Group was able to reduce its
working capital significantly in March 2009 and September 2009 and expects to
repeat this activity at future half-year and full-year reporting dates. Capital
expenditure increased by GBP1.4m to GBP5.0m due primarily to continuing investment
in North America and the impact of changes in exchange rates.

In addition to free cash flow, there were no dividends paid in cash to
shareholders during the period, compared to GBP8.4m in the prior year.

Risk management

The principal risks and uncertainties for the remaining months of the financial
year are fundamentally the same as those discussed on pages 21, 22, 28 and 29
of our annual report for the year ended 31 March 2009.

In addition to the recession, general economic downturns as a result of
terrorism, industrial disputes, fuel price escalation, national disasters,
health pandemics or similar events could affect revenues.

HRG operates in a highly competitive market and revenues may be affected
materially if we are unable to secure new clients or renew existing contracts.
Client contracts are generally non-exclusive and generate fees on a
per-transaction and/or fixed fee basis.

HRG's revenue is also substantially dependent on continued access to inventory
through global distribution systems (GDS) and other suppliers. HRG depends on
the efficiency of its systems, third party systems and the ability to integrate
its systems with clients, suppliers and third parties. HRG mitigates this risk
through our continued investment and delivery of technology products to improve
processes and systems.

Financial risks due to volatility in exchange rates and interest rates,
together with the credit risk from clients and suppliers continue to be
monitored centrally.

Funding and net debt

The Group's principal borrowing is from a GBP220m multi-currency revolving credit
facility (RCF) that is committed until September 2011. The RCF is used for
loans, letters of credit and guarantees with interest based on LIBOR/EURIBOR
plus a margin and mandatory costs incurred by the lenders. In addition, there
are uncommitted facilities, amounting to around GBP24m at 30 September 2009,
which are used for local flexibility.

The principal banking covenants for the RCF are measured twice each year, at
the end of March and the end of September, against EBITDA before exceptional
items. The definition of EBITDA for covenant purposes is not materially
different to the definition used in these financial statements. The covenants
require that net debt is less than 3.0 times EBITDA and net external interest
is covered at least 4.0 times by EBITDA. As measured by our banking covenants,
the actual ratios at 30 September 2009 were 2.5 for net debt (31 March 2009:
2.1) and 7.2 for net external interest (31 March 2009: 4.9).

Net debt of GBP96.0m compares to GBP123.0m at 30 September 2008 and GBP85.3m at 31
March 2009. Gearing was 52% (31 March 2009: 47%), or 108% (31 March 2009: 64%)
including the pension deficits and related deferred tax assets.

Based on our current forecasts, the Board believes that these facilities
provide sufficient headroom.

Pensions

The Group pension deficits under IAS19 have increased by GBP62.2m at 31 March
2009 to GBP127.5m before tax at 30 September 2009.

The UK defined benefit scheme deficit increased from GBP51.3m to GBP113.5m over the
same period. Favourable investment performance allowed the assets, which
comprise 58% equities, to increase by GBP17.4m. The liabilities increased by GBP
79.6m, with a lower discount rate adding GBP60.0m and a higher inflation rate
adding GBP14.4m. For several years, the UK defined benefit scheme has been closed
to new entrants and has capped increases in pensionable salary. Cash
contributions are set at essentially the same level as agreed at the time of
the IPO in 2006, and equate to 15.2% of pensionable salaries plus an additional
deficit reduction payment of GBP6.6m per annum.

At 30 September 2009 there was a deferred tax asset of GBP31.8m (31 March 2009: GBP
14.4m) related to the UK deficit and GBP1.3m (31 March 2009: GBP1.2m) related to
the overseas schemes.

Foreign currency

The following principal exchange rates have been used in the financial
statements:

Income Statement Balance Sheet

2009 2008 Change 2009 2008* Change

Euro 1.14 1.26 +11% 1.09 1.08 -1%

Swiss Franc 1.73 2.04 +18% 1.66 1.63 -2%

US Dollar 1.60 1.92 +20% 1.60 1.43 -11%

Canadian 1.79 1.97 +10% 1.72 1.80 +5%
Dollar

* As at 31 March 2009.

Net debt included GBP33.2m (35%) of non-Sterling debt (31 March 2009: GBP19.1m:
22%), with changes in exchange rates, including the effect of currency swaps,
increasing the balance by GBP0.7m.

Articles of Association

The prospect of continuing volatility in the Group pension deficits has
highlighted a potential technical matter concerning the administration of the
borrowing limits in our Articles of Association. We will be taking the
opportunity to propose an amendment to the Articles in order to prevent any
potential issue at a future date. A circular will be sent to shareholders in
due course.

Going concern

The Board believes that the Group has access to adequate resources and
committed financing facilities for the foreseeable future and has continued to
prepare the Consolidated Financial Statements on a going concern basis.

Summary income statement

Six months ended 30 September 2009 2008

GBPm GBPm

Revenue 155.3 171.0

EBITDA(1) before exceptional items 15.8 16.7

Depreciation and amortisation (4.5) (3.7)

Underlying operating profit 11.3 13.0

Amortisation of acquired intangibles (1.9) (1.7)

Exceptional items (2.3) --

Operating profit 7.1 11.3

Share of results of associates and -- 0.2
joint ventures

Net finance costs (3.8) (5.4)

Profit before tax 3.3 6.1

Taxation (1.1) (2.0)

Profit for the period 2.2 4.1

Summary balance sheet 30 September 31 March

2009 2009

GBPm GBPm

Goodwill and other intangible assets 251.8 258.0

Property, plant and equipment, and 17.3 17.9
investments

Working capital (86.5) (93.7)

Current tax liabilities (net) (8.6) (7.8)

Deferred tax assets (net) 50.0 32.2

Net debt (96.0) (85.3)

Pension liabilities (pre-tax) (127.5) (65.3)

Other items (7.6) (8.3)

Net assets (7.1) 47.7

Summary cash flow statement

Six months ended 30 September 2009 2008

GBPm GBPm

EBITDA(1) before exceptional items 15.8 16.7

Exceptional items (2.3) --

Working capital movements (7.4) (4.4)

Interest paid (2.0) (4.3)

Tax paid (2.2) (2.9)

Capital expenditure (4.9) (3.6)

Pension funding in excess of EBITDA (3.7) (3.4)
charge

Other movements (2.0) (0.1)

Free cash outflow (8.7) (2.0)

Acquisitions and disposals -- 0.1

Dividends paid to external -- (8.4)
shareholders

Net cash outflow (8.7) (10.3)

Foreign exchange and other (2.0) (2.3)

(Increase) in net debt (10.7) (12.6)

(1) Earnings Before Interest, Taxation, Depreciation and Amortisation.

The comparatives in the summary cash flow statement have been restated to
include dividends paid to minority interests in `Other movements' within free
cash outflow.

Hogg Robinson Group plc

Consolidated Income Statement

For the period ended 30 September 2009

Half-year ended 30
Note September


2009 2008

GBPm GBPm

Revenue 5 155.3 171.0

Operating expenses 6 (148.2) (159.7)



Operating profit 5 7.1 11.3

Analysed as:

Underlying operating profit 5 11.3 13.0

Amortisation of acquired intangibles (1.9) (1.7)

Exceptional items 6 (2.3) -



Operating profit 7.1 11.3



Share of results of associates and joint - 0.2
ventures

Finance income 8 0.1 0.7

Finance costs 8 (3.9) (6.1)



Profit before tax 3.3 6.1

Income tax expense 9 (1.1) (2.0)



Profit for the period 2.2 4.1



Profit attributable to:

Equity Shareholders of the Company 10 1.7 3.4

Minority interests 0.5 0.7



2.2 4.1



Half-year ended 30
Note September


2009 2008

pence pence

Earnings per share

Basic 10 0.6 1.1

Diluted 0.5 1.1

The notes form an integral part of the consolidated half-yearly financial
information.

Hogg Robinson Group plc

Consolidated Statement of Comprehensive
Income

For the period ended 30 September 2009

Note Half-year ended 30
September

2009 2008

GBPm GBPm

Profit for the period 2.2 4.1



Other comprehensive income

Currency translation differences 17 (8.9) 2.7

Actuarial (loss) / gain on pension schemes (64.5) 5.7

Deferred tax movement on pension liability 18.0 (1.6)



Other comprehensive (loss) / income for the (55.4) 6.8
period, net of tax



Total comprehensive (loss) / income for the (53.2) 10.9
period



Total comprehensive (loss) / income
attributable to:

Equity Shareholders of the parent (53.7) 10.2

Minority interests 0.5 0.7



(53.2) 10.9




The notes form an integral part of the consolidated half-yearly financial
information.

Hogg Robinson Group plc

Consolidated Balance Sheet

As at 30 September 2009

Note 30 31 March
September

2009 2009

GBPm GBPm

Non current assets

Goodwill and other intangible assets 12 251.8 258.0

Property, plant and equipment 13 14.6 15.1

Investments accounted for using the equity 2.7 2.8
method

Trade and other receivables 0.2 0.2

Deferred tax assets 50.5 33.8



319.8 309.9



Current assets

Trade and other receivables 99.7 102.6

Current tax assets 0.8 1.5

Cash and cash equivalent assets 14 41.4 68.5



141.9 172.6



Total assets 461.7 482.5



Non current liabilities

Financial liabilities - borrowings 14 (135.1) (144.4)

Deferred tax liabilities (0.5) (1.6)

Retirement benefit obligations 15 (127.5) (65.3)

Provisions (3.6) (3.4)



(266.7) (214.7)



Current liabilities

Financial liabilities - borrowings 14 (1.2) (8.0)

Financial liabilities - derivative (1.3) (0.6)
financial instruments

Current tax liabilities (9.4) (9.3)

Trade and other payables (186.4) (196.5)

Provisions (3.8) (5.7)



(202.1) (220.1)



Total liabilities (468.8) (434.8)



Net (liabilities) / assets (7.1) 47.7



Capital and reserves attributable to equity
Shareholders

Share capital 16 3.1 3.1

Share premium 172.2 172.2

Other reserves 17 15.2 24.1

Retained earnings (201.1) (155.2)



(10.6) 44.2

Minority interests 3.5 3.5



Total equity (7.1) 47.7




The notes form an integral part of the consolidated half-yearly financial
information.

Transactions with owners:

Hogg Robinson Group
plc

Consolidated Statement of
Changes in Equity

As at 30 September
2009

Attributable to owners of the
Company

Share Share Other Retained Minority Total

capital premium reserves earnings Total Interests Equity

GBPm GBPm GBPm GBPm GBPm GBPm GBPm

Balance at 1 April 3.1 171.9 5.3 (132.8) 47.5 2.5 50.0
2008



Retained profit for - - - 3.4 3.4 0.7 4.1
the period

Other comprehensive
income:

Actuarial gain on - - - 5.7 5.7 - 5.7
pension schemes

Deferred tax - - - (1.6) (1.6) - (1.6)
movement on pension
liability

Currency translation - - 2.7 - 2.7 - 2.7
differences



Total comprehensive - - 2.7 7.5 10.2 0.7 10.9
income for the period
ended 30 September
2008



Transactions with
owners:

Dividends paid - - - (8.6) (8.6) (0.2) (8.8)

Scrip dividend - 0.2 - - 0.2 - 0.2
issued in lieu of
dividend

Share-based - - 0.6 - 0.6 - 0.6
incentives



- 0.2 0.6 (8.6) (7.8) (0.2) (8.0)





Balance at 30 3.1 172.1 8.6 (133.9) 49.9 3.0 52.9
September 2008



Balance at 1 April 3.1 171.9 5.3 (132.8) 47.5 2.5 50.0
2008



Retained profit for - - - 7.4 7.4 1.7 9.1
the year

Other comprehensive
income:

Actuarial loss on - - - (23.4) (23.4) - (23.4)
pension schemes

Deferred tax - - - 5.9 5.9 - 5.9
movement on pension
liability

Currency translation - - 17.6 - 17.6 0.1 17.7
differences



Total comprehensive - - 17.6 (10.1) 7.5 1.8 9.3
income for the year
ended 31 March 2009

Dividends paid - - - (12.3) (12.3) (0.8) (13.1)

Scrip dividend - 0.3 - - 0.3 - 0.3
issued in lieu of
dividend

Share-based - - 1.2 - 1.2 - 1.2
incentives



- 0.3 1.2 (12.3) (10.8) (0.8) (11.6)





Balance at 31 March 3.1 172.2 24.1 (155.2) 44.2 3.5 47.7
2009




Hogg Robinson Group
plc

Consolidated Statement of Changes in
Equity (continued)

As at 30 September
2009

Attributable to owners of the
Company

Share Share Other Retained Minority Total

capital premium reserves earnings Total Interests Equity

GBPm GBPm GBPm GBPm GBPm GBPm GBPm

Balance at 1 April 3.1 172.2 24.1 (155.2) 44.2 3.5 47.7
2009



Retained profit for - - - 1.7 1.7 0.5 2.2
the period

Other comprehensive
income:

Actuarial loss on - - - (64.5) (64.5) - (64.5)
pension schemes

Deferred tax - - - 18.0 18.0 - 18.0
movement on pension
liability

Currency translation - - (8.9) - (8.9) - (8.9)
differences



Total comprehensive - - (8.9) (44.8) (53.7) 0.5 (53.2)
income for the period
ended 30 September
2009



Transactions with
owners:

Dividends paid - - - - - (0.5) (0.5)

Shares held by - - - (1.1) (1.1) - (1.1)
Employee Benefits
Trust



- - - (1.1) (1.1) (0.5) (1.6)





Balance at 30 3.1 172.2 15.2 (201.1) (10.6) 3.5 (7.1)
September 2009




The notes form an integral part of the consolidated half-yearly financial
information.

Consolidated Statement of Cash Flows

For the period ended 30 September 2009

Note Half-year ended 30
September

2009 2008

GBPm GBPm

Cash flows from operating activities

Cash generated from operations 18 0.9 9.2

Interest paid (2.4) (5.1)

Tax paid (2.2) (2.9)



Cash flows from operating activities - net (3.7) 1.2



Cash flows from investing activities

Acquisition of subsidiaries, net of cash - (0.3)
acquired

Disposals of associates, joint ventures and - 0.4
other investments

Purchase of property, plant and equipment (2.1) (1.6)

Purchase of intangible assets (2.9) (2.0)

Proceeds from sale of property, plant and 0.1 -
equipment

Interest received 0.2 0.7

Dividends received from associates 0.2 0.1



Cash flows from investing activities - net (4.5) (2.7)



Cash flows from financing activities

Repayment of borrowings (13.7) (17.0)

New borrowings - 8.6

Cash effect of currency swaps 0.8 (0.7)

Employee Benefits Trust (1.1) -

Dividends paid to external shareholders - (8.4)

Dividends paid to minority shareholders (0.5) (0.2)



Cash flows from financing activities - net (14.5) (17.7)



Net decrease in cash and cash equivalents (22.7) (19.2)




Half-year ended 30
September

2009 2008

GBPm GBPm

Net decrease in cash and cash equivalents (22.7) (19.2)

Cash and cash equivalents at the beginning of the 63.3 48.5
period

Exchange rate (0.3) 0.1
effects



Cash and cash equivalents at the end of the period 40.3 29.4



Cash and cash equivalent assets 41.4 37.1

Overdrafts (1.1) (7.7)



40.3 29.4




The notes form an integral part of the consolidated half-yearly financial
information.

Hogg Robinson Group plc

Notes to the Consolidated Half-Year Financial Information

For the period ended 30 September 2009

1 General information

Hogg Robinson Group plc is a public limited company, incorporated in the UK
under the Companies Act 1985. The address of its registered office is Global
House, Victoria Street, Basingstoke, Hampshire, RG21 3BT, United Kingdom.

The Company is listed on the Official List of the UK Listing Authority and the
London Stock Exchange, and its registered number is 3946303.

This condensed consolidated half-yearly financial information was approved for
issue on 27 November 2009.

This condensed consolidated half-yearly financial information does not comprise
statutory accounts within the meaning of Section 434 of the Companies Act 2006.
Statutory accounts for the year ended 31 March 2009 were approved by the Board
of Directors on 28 May 2009 and delivered to the Registrar of Companies. The
report of the auditors on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement under Section
237 of the Companies Act 1985.

This condensed consolidated half-yearly financial information has been
reviewed, not audited.

2 Basis of preparation

This condensed consolidated half-yearly financial information for the half-year
ended 30 September 2009 has been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Services Authority and with IAS 34, Interim
Financial Reporting, as adopted by the European Union. The half-yearly
condensed consolidated financial report should be read in conjunction with the
Annual Report and Financial Statements for the year ended 31 March 2009, which
have been prepared in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union.

The Directors consider that, taking into account the assets and revenue of the
Group, the Group has adequate resources to continue in operational existence
for the foreseeable future. For this reason, the Directors adopt the going
concern basis for the condensed consolidated half-yearly financial information.

3 Accounting policies

The accounting policies adopted are consistent with those of the Annual
Consolidated Financial Statements for the year ended 31 March 2009, as
described in those statements.

The following new standards, amendments to standards and interpretations to
existing standards are mandatory for the first time for the financial year
beginning 1 April 2009:

* IAS 1 (Amendment), Presentation of Financial Statements, effective from 1
January 2009. The revised standard prohibits the presentation of items of
income and expenses (that is `non-owner changes in equity') in the
Consolidated Statement of Changes in Equity, requiring `non-owner changes
in equity' to be presented separately from owner changes in equity. All
non-owner changes in equity are required to be shown in a performance
statement.

Entities can choose whether to present one performance statement (the
`Consolidated Statement of Comprehensive Income') or two separate statements
(the `Consolidated Income Statement' and the `Consolidated Statement of
Comprehensive Income'). The Group has elected to present two separate
performance statements under the revised disclosure requirements.

* IAS 23 (Amendment), Borrowing costs, effective from 1 January 2009 but not
currently applicable to the Group.

* IAS 32 (Amendment), Financial Instruments: Presentation and IAS 1
(Amendment), Presentation of Financial Statements, effective from 1 January
2009 but having no impact on the Group.

* IFRS 1 (Amendment), First time adoption of IFRS and IAS 27, Consolidated
and separate financial statements, effective 1 January 2009 but having no
impact on the Group.

* IFRS 2 (Amendment), Share Based Payment - Vesting and Conditions and
Cancellations, effective from 1 January 2009. This revision clarifies that
vesting conditions are service conditions and performance conditions only,
and that other features of a share-based payment are not vesting
conditions. The impact of adopting this amendment is not material to the
Group.

* IFRS 8, Operating Segments, effective from 1 January 2009. This has
resulted in no change to the number of reportable segments presented (note
5).

* IFRIC 15, Amendments to the Construction of Real Estate, effective from 1
January 2009 but currently not applicable to the Group.

* IFRIC 16, Hedges of a net investment in a foreign operation, effective from
1 October 2008 but not currently applicable to the Group.

The following new standards, amendments to standards and interpretations have
been issued, but are not effective for the financial year beginning 1 April
2009 and have not been early adopted:

* IAS 27 (Revised), Consolidated and Separate Financial Statements, effective
from 1 July 2009. The impact of adopting this standard in future periods is
under assessment.

* IAS 39 (Amendment), Financial instruments: Recognition and Measurement,
effective from 1 January 2009 subject to endorsement by the EU. The impact
of adopting this amendment is currently being assessed by the Group.

* IFRS 3 (Revised), Business Combinations, applicable to business
combinations effected from 1 July 2009. The impact of adopting this
standard in future periods will be considered in the event of a future
business combination.

* IFRIC 17, Distributions of non-cash assets to owners, effective from 1 July
2009 subject to endorsement by the EU but currently not applicable to the
Group.

* IFRIC 18, Transfer of Assets from Customers, effective from 1 July 2009
subject to endorsement by the EU but currently not applicable to the Group.

4 Seasonality

The Group's revenue and operating profit are affected by the seasonality of
corporate travel business, with travel declining during the summer and
Christmas holiday periods and, to a lesser extent, during Easter holidays,
which are times when many corporate travellers are on holiday. Typically, the
Group experiences the highest levels of revenue in the last quarter of its
financial year, principally reflecting increased travel activity by its clients
during this period and recognition of revenue due to the finalisation of
amounts due in connection with the annual review of supplier contracts.

5 Operating segments

The chief operating decision-maker has been identified as the Executive
Management Team, who review the Group's internal reporting in order to assess
performance and allocate resources. The Executive Management Team has
determined the operating segments based on these reports.

The Executive Management Team considers the business from the perspective of
one service, Business Travel, which is further considered from a geographic
perspective. The performance of the operating segments is assessed based on a
measure of operating profit excluding items of an exceptional nature. Interest
income and expenditure are not included in the result for each operating
segment that is reviewed by the Executive Management Team. Other information
provided, except as noted below, to the Executive Management Team is measured
in a manner consistent with that in the financial statements.

Total segment assets exclude cash and cash equivalent assets, current tax
assets and deferred tax assets which are managed on a central basis. These are
part of the reconciliation to total Consolidated Balance Sheet assets.

Business Travel

North Asia

Europe America Pacific Total

GBPm GBPm GBPm GBPm

Half-year ended 30 September
2009

Revenue from external customers 110.3 34.5 10.5 155.3



Underlying operating profit 8.8 2.4 0.1 11.3

Amortisation of acquired (1.5) (0.3) (0.1) (1.9)
intangibles



Operating profit before 7.3 2.1 - 9.4
exceptional items

Exceptional items (2.3) - - (2.3)



Operating profit 5.0 2.1 - 7.1



Half-year ended 30 September
2008

Revenue from external customers 128.1 32.5 10.4 171.0



Underlying operating profit 12.7 0.2 0.1 13.0

Amortisation of acquired (1.3) (0.3) (0.1) (1.7)
intangibles



Operating profit before 11.4 (0.1) - 11.3
exceptional items

Exceptional items - - - -



Operating profit 11.4 (0.1) - 11.3




External revenue from clients by geographical area (where the client is
located) is not significantly different from external revenue from clients by
origin (where the Group is located) disclosed above.

There is no material inter-segment revenue.

A reconciliation of operating profit to total profit before income tax expense
is provided on the Consolidated Income Statement.

Business Travel

North Asia

Europe America Pacific Total

GBPm GBPm GBPm GBPm

Total segment assets

30 September 2009 264.8 89.7 14.5 369.0

31 March 2009 277.2 88.0 13.5 378.7




Reportable segments' assets are reconciled to total assets as follows:

30 31 March
September

2009 2009

GBPm GBPm

Total segment assets 369.0 378.7

Cash and cash equivalent 41.4 68.5
assets

Current tax assets 0.8 1.5

Deferred tax assets 50.5 33.8



461.7 482.5




6 Operating expenses

Half-year ended 30
September

2009 2008

GBPm GBPm

Operating expenses before exceptional items:

Staff costs (note 7) 95.4 103.7

Amortisation of client relationships 1.8 1.6

Amortisation of other intangible assets 2.2 1.5

Depreciation of property, plant and 2.4 2.3
equipment

Operating lease rentals - buildings 7.1 7.1

Operating lease rentals - other assets 0.9 0.9

Currency translation differences 0.2 0.7

Other expenses 35.9 41.9



145.9 159.7



Exceptional items:

Restructuring costs:

Staff costs (note 7) 1.8 -

Other expenses 0.5 -



2.3 -





Operating expenses including exceptional items 148.2 159.7




Restructuring costs of GBP2.3m were incurred during the period. These relate to
planned cost reduction programmes in Europe and are in respect of redundancy
costs and onerous lease provisions.

7 Staff costs

Half-year ended 30 September

2009 2009 2009 2008 2008 2008

Before Before

exceptional Exceptional exceptional Exceptional

items items Total items items Total

GBPm GBPm GBPm GBPm GBPm GBPm

Salaries 80.1 - 80.1 86.0 - 86.0

Social security 9.9 - 9.9 10.6 - 10.6
costs

Pension costs 4.5 - 4.5 5.1 - 5.1

Redundancy and 0.9 1.8 2.7 1.4 - 1.4
termination costs

Share-based - - - 0.6 - 0.6
incentives



95.4 1.8 97.2 103.7 - 103.7



Pension costs
comprise:

Defined benefit 1.3 - 1.3 1.8 - 1.8
schemes

Defined 3.2 - 3.2 3.3 - 3.3
contribution
schemes



4.5 - 4.5 5.1 - 5.1




Half-year ended 30
September

2009 2008

number number

Average monthly number of staff employed by the 5,416 6,372
Group




8 Finance income and finance costs

Half-year ended 30 September

2009 2008

GBPm GBPm

Finance income - bank interest 0.1 0.7



Interest on bank loans and overdrafts (1.9) (5.3)

Amortisation of issue costs on bank loans (0.3) (0.3)

Expected return on pension scheme assets
less

interest cost on pension scheme (1.6) (0.5)
liabilities

Other finance charges (0.1) -



Finance costs (3.9) (6.1)



Net finance costs (3.8) (5.4)




9 Taxation

The tax charge is split as follows:

Half-year ended 30 September

2009 2008

GBPm GBPm

United Kingdom 2.2 1.0

Overseas (1.1) 1.0



1.1 2.0



Half-year ended 30 September

2009 2008

GBPm GBPm

On recurring business 1.7 2.0

Exceptional items (0.6) -



1.1 2.0




Taxes on income in the half-years to 30 September are accrued using the tax
rate that would be applicable to the expected total annual earnings by country.

* Earnings per share

Earnings per share attributable to equity holders of the Company were as
follows:

Half-year ended 30
September

2009 2008

GBPm GBPm

Earnings for the purposes of earnings per share

Profit for the period 2.2 4.1

Less: amount attributable to minority interests (0.5) (0.7)



Total 1.7 3.4



Half-year ended 30
September

2009 2008

number number

m m

Weighted average number of Ordinary shares in
issue

Issued (for basic EPS) 302.3 303.9

Dilutive potential ordinary shares 9.6 2.4

For diluted EPS 311.9 306.3


11 Dividends

The Directors propose an interim dividend in respect of the six months ended 30
September 2009 of 0.4p payable on 6 January 2010 to shareholders who are on the
register at 11 December 2009. This interim dividend, amounting to GBP1.2m has not
been recognised as a liability in this half-yearly financial report, in
accordance with IAS 10, Events after the Balance Sheet Date.

12 Goodwill and other intangible assets

30 September 31 March

2009 2009

GBPm GBPm

Goodwill 220.7 225.6

Other intangible assets 31.1 32.4



251.8 258.0




Other intangible assets

Computer software

Externally Internally Client

Goodwill acquired generated relationships Total

GBPm GBPm GBPm GBPm GBPm

Cost

At 1 April 2008 229.5 16.2 6.1 31.4 283.2

Additions - 0.8 3.3 - 4.1

Reclassification of assets - - 2.5 - 2.5

Disposals - (1.4) - - (1.4)

Adjustments to goodwill on (0.3) - - - (0.3)
recognition of tax assets

Adjustments to deferred (0.2) - - - (0.2)
consideration

Exchange differences 23.0 1.3 0.2 6.7 31.2



At 31 March 2009 252.0 16.9 12.1 38.1 319.1

Additions - 0.3 2.6 - 2.9

Disposals - (0.1) - - (0.1)

Exchange differences (4.9) 0.4 0.3 (1.2) (5.4)



At 30 September 2009 247.1 17.5 15.0 36.9 316.5



Accumulated amortisation

At 1 April 2008 26.4 10.5 3.0 11.9 51.8

Amortisation charge for the - 1.9 1.5 3.4 6.8
year

Disposals - (1.4) - - (1.4)

Exchange differences - 1.0 - 2.9 3.9



At 31 March 2009 26.4 12.0 4.5 18.2 61.1

Amortisation charge for the - 1.0 1.2 1.8 4.0
period

Disposals - (0.1) - - (0.1)

Exchange differences - 0.2 (0.1) (0.4) (0.3)



At 30 September 2009 26.4 13.1 5.6 19.6 64.7



Carrying amount

At 1 April 2008 203.1 5.7 3.1 19.5 231.4



At 31 March 2009 225.6 4.9 7.6 19.9 258.0



At 30 September 2009 220.7 4.4 9.4 17.3 251.8




The amortisation charge for the period of GBP4.0m (2008: GBP3.1m) is comprised of GBP
1.9m (2008: GBP1.7m) in respect of intangible assets acquired via business
combinations and GBP2.1m (2008: GBP1.4m) which relates to amortisation of software
purchased and internally generated by existing businesses.

13 Property, plant and equipment

Properties Plant and Total
equipment

GBPm GBPm GBPm

At cost

At 1 April 2008 9.3 38.9 48.2

Additions for the year 0.5 5.2 5.7

Disposals for the year (0.2) (3.1) (3.3)

Exchange differences 1.0 5.4 6.4



At 31 March 2009 10.6 46.4 57.0

Additions for the period - 2.1 2.1

Disposals - (0.4) (0.4)

Exchange differences (0.1) (0.3) (0.4)



At 30 September 2009 10.5 47.8 58.3



Accumulated depreciation

At 1 April 2008 5.2 30.4 35.6

Depreciation charge for the year 0.9 3.7 4.6

Disposals for the year (0.1) (2.8) (2.9)

Exchange differences 0.6 4.0 4.6



At 31 March 2009 6.6 35.3 41.9

Depreciation charge for the period 0.4 2.0 2.4

Disposals - (0.4) (0.4)

Exchange differences - (0.2) (0.2)



At 30 September 2009 7.0 36.7 43.7



Carrying amount

At 1 April 2008 4.1 8.5 12.6



At 31 March 2009 4.0 11.1 15.1



At 30 September 2009 3.5 11.1 14.6




The Group does not have any material capital commitments in respect of the
purchase of property, plant and equipment.

14 Financial liabilities - borrowings

30 31 March
September

2009 2009

GBPm GBPm

At amortised cost

Current (due within one year)

Overdrafts 1.1 5.2

Bank loans 0.5 3.2

Unamortised loan issue costs (0.6) (0.6)

Finance leases 0.2 0.2



Total current 1.2 8.0



Non-current (due after more than one year)

Bank loans 135.4 144.9

Unamortised loan issue costs (0.5) (0.8)

Finance leases 0.2 0.3



Total non-current 135.1 144.4



Total 136.3 152.4



Net debt

Total financial liabilities 136.3 152.4

Add back: unamortised loan issue costs 1.1 1.4

Cash and cash equivalent assets (41.4) (68.5)



Net debt 96.0 85.3




15 Retirement benefit obligations

Defined benefit pension arrangements

The Group's principal defined benefit pension arrangement is the Hogg Robinson
(1987) Pension Scheme (`The UK Scheme'). The UK Scheme was available to most UK
employees until it was closed to new members in March 2003. Its benefits are
based on final pensionable salary. The increase in final pensionable salary
since 31 March 2003 is limited to the lower of the increase in the Retail Price
Index and 5% per annum. The latest actuarial valuation of the scheme was
carried out at 6 April 2008 by an independent qualified actuary.

The Group also operates defined benefit schemes in Norway, Switzerland, Germany
and Italy.

The amounts recognised on the Consolidated Balance Sheet are determined as
follows:

30 September 31 March

2009 2009

GBPm GBPm

UK scheme:

Defined benefit obligations (302.6) (223.0)

Fair value of plan assets 189.1 171.7



Deficit - UK Scheme (113.5) (51.3)

Deficit - Other Schemes (14.0) (14.0)



(127.5) (65.3)




The amounts recognised in the Consolidated Income Statement in respect of the
UK Scheme are as follows:

Half-year ended 30
September

2009 2008

GBPm GBPm

Current service cost 0.7 1.1

Expected return on scheme assets (6.0) (6.9)

Interest cost 7.4 7.4



Total charge to the Consolidated Income 2.1 1.6
Statement




The key assumptions used for the UK Scheme were:

30 31 March
September

2009 2009

Rate of increase in salary 4.50% 4.00%

Rate of increase in final pensionable salary 3.20% 2.70%

Rate of increase in pensions in payment - accrued 5.00% 5.00%
before 1999

Rate of increase in pensions in payment - accrued 3.20% 2.70%
after 1999

Discount rate 5.60% 6.70%

Inflation 3.20% 2.70%

Expected rate of return on plan assets:

Equity instruments 7.70% 7.20%

Debt instruments 5.60% 6.70%

Property 7.70% 7.20%

Other assets 4.30% 5.00%

16 Share capital

30 September

2009

number

Authorised

Ordinary shares of 1p each 513,808,171



Issued and fully paid

At 1 April 2009 and 30 September 307,762,884
2009



30 September

2009

GBPm

Issued and fully paid

Ordinary shares of 1p 3.1




The HRG Employee Benefits Trust acquired 4,000,000 of the Company's Ordinary
shares through purchases on the London Stock Exchange on 10 June 2009. The
total amount paid to acquire shares in the period ended 30 September 2009 was GBP
1.1m and has been deducted from retained earnings. The market value of Ordinary
shares in the Company held by the Employee Benefits Trust as at 30 September
2009 was GBP2.5m.

17 Other reserves

Share-based Exchange Other

incentives reserve reserves

GBPm GBPm GBPm

Balance at 1 April 2008 0.9 4.4 5.3

Other comprehensive income:

Currency translation differences - 2.7 2.7

Transactions with owners:

Share-based incentives 0.6 - 0.6



Balance at 30 September 2008 1.5 7.1 8.6



Balance at 1 April 2008 0.9 4.4 5.3

Other comprehensive income:

Currency translation differences - 17.6 17.6

Transactions with owners:

Share-based incentives 1.2 - 1.2





Balance at 31 March 2009 2.1 22.0 24.1



Balance at 1 April 2009 2.1 22.0 24.1

Other comprehensive income:

Currency translation differences - (8.9) (8.9)





Balance at 30 September 2009 2.1 13.1 15.2




18 Cash generated from operations

Half-year ended 30
September

2009 2008

GBPm GBPm

Profit before tax 3.3 6.1

Adjustments for:

Depreciation and amortisation 6.4 5.4

Net increase in provisions 3.2 1.5

Share of results of associates and joint - (0.2)
ventures

Net finance costs 3.8 5.4

Other timing differences 0.1 0.6



16.8 18.8

Cash expenditure charged to provisions (4.8) (1.8)

Change in trade and other receivables 3.2 8.4

Change in trade and other payables (10.6) (12.8)

Pension funding in excess of charge to (3.7) (3.4)
operating profit



Cash generated from operations 0.9 9.2




19 Related party transactions

There have been no material changes in the nature of related party transactions
since 31 March 2009, see note 28 in the Group's 31 March 2009 Annual Report and
Consolidated Financial Statements.

20 Contingent assets and contingent liabilities

No change has taken place in the contingent assets and contingent liabilities
as reported in note 26 of the Group's 31 March 2009 Annual Report and
Consolidated Financial Statements.

Hogg Robinson Group plc

Statement of Directors' Responsibilities

The Directors confirm that this condensed consolidated half-yearly financial
information has been prepared in accordance with IAS 34 as adopted by the
European Union and that the Interim Management Report herein includes a fair
review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

* an indication of important events that have occurred during the first six
months and their impact on the condensed set of consolidated financial
statements, and a description of the principal risks and uncertainties for
the remaining six months of the financial year; and

* material related-party transactions in the first six months and any
material changes in the related-party transactions described in the last
annual report.

The Directors of Hogg Robinson Group plc are listed in the Hogg Robinson Group
plc Annual Report for 31 March 2009.

By Order of the Board

Keith Burgess

Company Secretary

27 November 2009

Hogg Robinson Group plc

Independent review report to Hogg Robinson Group plc

Introduction

We have been engaged by the Company to review the condensed set of Consolidated
Financial Statements in the half-yearly financial report for the six months
ended 30 September 2009, which comprises the Consolidated Income Statement,
Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet,
Consolidated Statement of Changes in Equity, Consolidated Statement of Cash
Flows and related notes. We have read the other information contained in the
half-yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed
set of Consolidated Financial Statements.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure and Transparency
Rules of the United Kingdom's Financial Services Authority.

As described in note 2, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of Consolidated Financial Statements included in this half-yearly
financial report has been prepared in accordance with International Accounting
Standard 34, `Interim Financial Reporting', as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed
set of Consolidated Financial Statements in the half-yearly financial report
based on our review. This report, including the conclusion, has been prepared
for and only for the Company for the purpose of the Disclosure and Transparency
Rules of the Financial Services Authority and for no other purpose. We do not,
in producing this report, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, `Review of Interim Financial Information
Performed by the Independent Auditor of the Entity', issued by the Auditing
Practices Board for use in the United Kingdom. A review of the interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK and
Ireland) and consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of Consolidated Financial Statements in the
half-yearly financial report for the six months to 30 September 2009 is not
prepared, in all material respects, in accordance with International Accounting
Standard 34 as adopted by the European Union and the Disclosure and
Transparency Rules of the United Kingdom's Financial Services Authority.

PricewaterhouseCoopers LLP

Chartered Accountants and Registered Auditors

London

27 November 2009

Notes:

(a) The maintenance and integrity of the Hogg Robinson Group plc web site is
the responsibility of the Directors; the work carried out by the auditors does
not involve consideration of these matters and, accordingly, the auditors
accept no responsibility for any changes that may have occurred to the
half-yearly financial report since it was initially presented on the web site.

(b) Legislation in the United Kingdom governing the preparation and
dissemination of the financial information may differ from legislation in other
jurisdictions.



END





Hogg Robinson Group plc (HRG) is a holding company. The Company is engaged in the provision of corporate travel, expense and data management services. HRG targets the international and national managed sector, where clients require a range of globally integrated and tailored services underpinned by technology solutions and products. The company operates in two segments: Corporate Travel Management and Spendvision. Corporate travel management is the provision of support services to enable businesses to maximize traveler welfare, whilst fulfilling their global business travel needs. Spendvision is a global provider of total transaction management solutions, is a wholly owned subsidiary of HRG. Expense management is the delivery of systems and support services to enable businesses to streamline the processes, by which they control and administer staff business expenses. more »

Share Price (Full)
50p
Change
0.0  0.0%
P/E (fwd)
6.9
Yield (fwd)
4.8
Mkt Cap (£m)
159.7