HOGG ROBINSON | Hogg Robinson Grp Half Yearly Report | RNS

RNS Regulatory News
TIDMHRG

30 November 2010

Hogg Robinson Group plc

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

Results for the six months ended 30 September 2010

Excellent first-half results

Good growth prospects

Summary of results

Six months ended 30 September

2010 2009 Change

Revenue GBP169.2m GBP155.3m +9%

Underlying earnings (1)

- Operating profit GBP19.5m GBP11.3m +73%

- Operating profit margin 11.5% 7.3% +4.2 ppts

- Profit before tax GBP15.3m GBP7.5m +104%

- Earnings per share 3.3p 1.6p +106%

Reported earnings

- Operating profit GBP17.5m GBP7.1m +147%

- Profit before tax GBP13.3m GBP3.3m +303%

- Earnings per share 2.8p 0.6p +367%

Interim dividend per share 0.5p 0.4p +25%

Net debt GBP85.8m GBP96.0m -GBP10.2m

Free cash outflow(2) (GBP6.1m) (GBP8.7m) +GBP2.6m

Financial Highlights

* Revenue up 9% at GBP169.2m (up 6% at constant currency) with growth across
all travel regions

* Underlying operating profit margin up from 7.3% to 11.5% due to operational
gearing

* Underlying EPS up by 106% to 3.3p

* Free cash flow (2) improvement of GBP2.6m

* Net debt down GBP10.2m from September 2009 at GBP85.8m; equivalent to 1.6x
underlying EBITDA(1) (2009: 2.3x)

* Re-financing of GBP220m committed credit lines completed, of which GBP190m
committed until November 2014 and GBP30m until November 2018

* Interim dividend up 25% to 0.5p per share (2009: 0.4p per share)

Operational Highlights

* Client travel spend up 22% (up 18% at constant currency)

* Client retention rate remains above 90%

* HRG's technology supports increased demand by clients for online bookings

* Net new business wins (including Aviva, Avon and Grant Thornton) and new
sales pipeline provides further support for growth

* Continued focus by clients on cost control and value for money plays to
HRG's consultative strategy

* Disruptions as a result of volcanic ash and strikes generated more work for
HRG as we managed repatriation and other contingency plans, offsetting
travel disruption

David Radcliffe, Chief Executive of Hogg Robinson Group plc, said:

"This is a very good set of results with operating profit up by more than 70%
and EPS more than double. Our strategy and business model have delivered over
the last two years. We have a proven management team, a disciplined approach to
cost control and a relentless focus on our customers. As a result, we are well
placed to leverage our global infrastructure and to take advantage of the
improving climate and growth prospects available to us.

"Uncertainty about the global economy will continue but we are encouraged by
the current signs of recovery in corporate travel and the Board believes that
we will be slightly ahead of our previous expectations for the full year."

Notes:

(1) Before amortisation of acquired intangibles and exceptional items

(2) Free cash flow is the change in net debt before acquisitions and disposals,
dividends and the impact of foreign exchange movements

For further information contact:

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
Martin Robinson

A presentation for analysts and institutional investors will be held at 0900h
GMT today at Tulchan Communications, 85 Fleet Street, London EC4Y 1AE. Copies
of the presentation with audio commentary from HRG's presentation team will be
available at www.hoggrobinsongroup.com by 1100h GMT today or soon thereafter.

Notes to Editors

Hogg Robinson Group plc (HRG) (LSE: HRG) was established in 1845 and is an
international corporate travel services company with headquarters located in
Basingstoke, Hampshire, UK. The HRG worldwide network, including contracted
partners, extends to 120 countries.

HRG's focus on its clients is underpinned by three differentiators - people,
technology and breadth of service. The Company has experienced management and
skilled operators together with proprietary technology which has been developed
in-house. HRG offers a range of services around the globe to deliver value,
cost savings, efficiency and innovation, without compromise.

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
Plc (HRG). 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.

Chief Executive's Statement

Overview

I am pleased to announce a strong set of results for the six months ended 30
September 2010. HRG has continued to make excellent progress during this
period, showing good performance across all key measures. At the heart of our
strategy is a focus on delivering value through first-class service that is
tailored to the specific needs of each client. This approach underpins our
reputation as one of the world's leading international corporate travel
services companies and will help sustain a business which delivers value to all
stakeholders.

Both client spending and travel bookings were up 18% in real terms during the
first six months of our financial year compared to the prior year, reflecting
strengthening confidence amongst many of our clients. This was first seen in
Asia Pacific and has since followed into North America and Europe. Set against
recent data published by, amongst others, the International Monetary Fund
(IMF), the International Air Transport Association (IATA) and STR Global, we
now have firm evidence of an emerging recovery in corporate travel.

Over the past two years, our focus has necessarily been the reduction of our
operating costs, but we were careful to retain enough flexibility for when the
economic climate started to improve. Despite increasing activity by our clients
during the first six months of this financial year, we resisted any increase in
our cost base until we were certain that the increased activity would be
sustained. In simple terms, we managed more activity than last year, and with
fewer staff. As a result, average revenue per head was 10% higher at constant
currency during the period. We will continue to manage this closely to ensure
that our cost base remains consistent with our strategy of delivering value
through first-class service.

Although our clients are starting to travel more, many of the changes that they
adopted during the recession have continued. Clients remain cost conscious,
though the priority now is on seeking travel solutions that offer good value
rather than those focused just simply on reducing overall travel spend. The
increasing use of lower-cost online self-booking tools is part of that and
HRG's own technology, together with the fact that we are able to work with
third-party technologies, is playing an important part in enabling that shift.

We have maintained our enviable client retention rate and have once again won
more business than we lost. Amongst several new clients secured during the
first half were Aviva, Avon and Grant Thornton.

We were very sorry to have to report the death, on 30 August 2010, of George
Battersby, who had been a non executive director since the IPO in 2006. George
made a really significant contribution to the Company in his time on the Board
and we will miss his insight and guidance.

Financial results

Revenue of GBP169.2m was up 9.0% as reported, or up 5.8% at constant exchange
rates. Underlying operating profit, which is stated before charging the
amortisation of acquired intangibles and exceptional items, was up by 73% to GBP
19.5m, and represents a margin improvement of 4.2 ppts to 11.5%. The operating
profit includes a contribution of GBP0.8m from favourable movements in exchange
rates. After taking account of net interest costs, underlying profit before tax
was up by 104% to GBP15.3m and underlying EPS increased by 106% from 1.6p to
3.3p.

After reflecting the amortisation of acquired intangibles and last year's
exceptional items, reported operating profit was up by 147% to GBP17.5m; profit
before tax was up by 303% to GBP13.3m; EPS increased by 367% from 0.6p to 2.8p.

We have again chosen to manage our working capital requirements down at the end
of September 2010, albeit to a lesser extent than at the end of March 2010. As
in previous years, the first half of our financial year has required higher
working capital which is expected to reduce in the second half of the year.
Free cash flow improved by GBP2.6m, to a net outflow of GBP6.1m. Net debt reduced
by GBP10.2m to GBP85.8m, representing 1.6x underlying EBITDA for the last 12 months
(2009: 2.3x). Interest cover also improved to 15.2x underlying EBITDA for the
last 12 months (2009: 8.3x).

We have also recently completed the re-financing of our GBP220m committed credit
lines, of which GBP190m is committed until November 2014 and GBP30m is committed
until November 2018. As expected, as a result of the current market, this
refinancing will add approximately GBP4m per annum to our borrowing costs.

There are some drawbacks associated with the low interest environment that we
are currently enjoying. One of those is the accounting valuation of pension
liabilities, which increases as interest rates fall, even in schemes like ours
which have been closed to new entrants for several years and have benefit caps
in place. For HRG, although cash contributions have remained unchanged, the
Group-wide pre-tax pension deficits have increased by GBP28.7m since the year end
to GBP155.1m as the net effect of a lower inflation rate and a lower discount
rate on the valuation of the liabilities was only partially offset by positive
investment performance. Inflation and discount rates are volatile and can vary
significantly as market conditions change and it is worth noting that the use
of current rates would reduce the deficit by approximately GBP40m.

In line with our progressive dividend policy, the Board has declared an interim
dividend of 0.5p per share, up 25% on the interim payout a year ago. This
dividend will be paid on 6 January 2011 to shareholders on the register at the
close of business on 10 December 2010.

The Board

We were pleased to announce the promotion of Kevin Ruffles, Regional President,
Europe & Asia Pacific, to the newly created position of Chief Operating Officer
and his appointment to the Board of HRG as an executive director with effect
from 1 October 2010.

Pending the appointment of an additional non executive director, the Board has
adopted voting procedures to ensure that it continues to comply with the spirit
of the UK Corporate Governance Code.

Current trading and outlook

There are encouraging signs that the positive momentum from the first half will
continue, and we have clearly demonstrated that we can manage the cost base.
The second half of the financial year has started well, although we do face
more challenging revenue comparatives. We are continuing to manage the business
for the longer term and have already begun to invest in additional staff to
maintain service levels and to create the capacity to support further growth.

Whilst recognising the global economic uncertainties and more demanding
comparatives in the second half, the Board believes that the outcome for the
year as a whole will be slightly ahead of our previous expectations.

David Radcliffe
Chief Executive

Operational Review

Market overview

Following the first signs of a recovery towards the end of calendar 2009,
market conditions have generally continued to improve through 2010. Recent data
indicate that the initial post-recession recovery has been followed by
continuing growth, albeit at a more modest level.

Macro indicators point to an increasing level of confidence in the economic
recovery. The IMF has upgraded its estimate of year-on-year global economic
growth for 2010, and believes that a similar rate of growth will continue into
2011.

Within the travel sector, IATA now predicts that airlines will show an
aggregate net profit of $8.9 billion in 2010, after a $9.9 billion loss in
2009.

The improving trend in passenger air traffic numbers, which was first seen in
the summer of 2009, has continued into 2010 and been interrupted only briefly
by the impact of the Icelandic volcano in April. For the six months to the end
of September, IATA figures reveal that the overall annual growth rate in
passenger traffic, which includes leisure travel, was just under 9% and
passenger numbers are now back above their pre-recession level of early 2008.
In the most recent published data, premium traffic, which is often used as a
barometer of business confidence, showed an increase of over 10% year-on-year
for the last reported quarter.

Figures from STR Global provide a similar picture of recovery. The year-on-year
monthly global hotel RevPAR growth rate has averaged at approximately 10%
during the six months to the end of September.

Although our business does not correlate closely with any one particular set of
data, the IMF, IATA and STR Global figures serve to underscore a generally
positive trend and our business is responding in the same way.

Client activity

Not surprisingly, many companies have changed their travel programmes over the
last two years and we have seen a drive towards greater policy compliance and
cost control. This has made clients more receptive to alternative ways of
maximising the value of their travel spend. These changes include different
travel itineraries and the adoption of consolidated service configurations and,
coupled with increased demand for data and analysis, has further improved our
value proposition.

Other trends are also emerging. There has been a move towards online,
self-booking of simpler travel itineraries, most noticeably in North America,
Australia and selected European countries. Pressure by suppliers has also
forced many clients to review their supplier contracts and we have seen greater
reliance on HRG for support, consultation and analysis. There is now closer
scrutiny and control of hotel bookings as companies recognise the opportunities
for better control of this expenditure. We are encouraged by these
developments, all of which offer additional revenue opportunities for HRG.

During our first half year, we have seen the strongest growth in revenue from
clients in the Pharmaceuticals & Healthcare and Manufacturing sectors while,
understandably, there has been a modest decline in revenue from our Government
contracts, though these only account for around 10% of client revenue.

Our value proposition, delivered through first-class service, continues to pay
dividends in terms of client retention and new business. Once again, we
delivered net new business wins during the first half and our client retention
rate remained above 90%.

We were pleased to welcome several new clients during the period including
Aviva, Avon, Grant Thornton, HCL Axon, Institute of International Education and
Stora Enso. In addition, we have secured expanded contracts with existing
clients such as Agilent, Ericsson, Rolls Royce, SGS, Syngenta and Volkswagen.
Notable amongst many clients renewing their contracts with HRG were ABB,
Bilfinger Berger, Bombardier, GlaxoSmithKline, National Australia Bank,
PepsiCo, Roche, Takeda, Weatherford and Willis. These successes are further
evidence of the enormous diversity of HRG's client base, in terms of both
sector and geography, which represents one of HRG's key strengths.

Corporate Travel Management

Europe

Six months ended 30 September 2010 2009 Change

Revenue GBP115.1m GBP109.1m +5.5%

Operating profit GBP12.1m GBP5.1m +GBP7.0m

Underlying operating profit (1) GBP13.6m GBP8.9m +GBP4.7m

Underlying margin (1) 11.8% 8.2% +3.6 ppts

(1) Before amortisation of acquired intangibles and exceptional items

Revenue was up by 5.1% at constant currency. Underlying operating profit rose
by GBP4.7m, including a GBP0.2m benefit from currency movements.

Client travel spend rose by 14% year-on-year in real terms and travel activity
was up 12%. Importantly, in our key markets of the UK, Germany and Switzerland
we performed well. Combined with the benefits from the mainland European branch
consolidation that began three years ago, we were able to deliver strong growth
in profits and margin.

The recent changes in our European service network have enabled us to absorb
the increase in activity more efficiently, helped by an increase in online
bookings. The branch network consolidation, increased flexibility of telephone
call-flow switching and an increase in travel consultants working from home
have all contributed to the margin improvement. Increasingly, we expect to
provide service to our clients through fewer strategic hubs.

In addition to increases in corporate travel, HRG's sports-related business in
Germany benefited from the success of the national team in the football World
Cup as well as a strong performance by the Bundesliga teams in the Champions
League. Another key development was the initiation of service for Volkswagen,
which enhances HRG's position in the German market. The general economic
recovery in business has meant a return to normal working patterns, following
last year's reduced working-time initiative introduced by the German
Government.

Our Swiss business also grew well, as existing clients began to increase their
travel activity and new clients, including Novartis, began to trade with us. As
in Germany, this was accompanied by a return to normal working patterns.

North America

Six months ended 30 September 2010 2009 Change

Revenue GBP38.0m GBP32.2m +18.0%

Operating profit GBP5.2m GBP2.0m +GBP3.2m

Underlying operating profit (1) GBP5.6m GBP2.3m +GBP3.3m

Underlying margin (1) 14.7% 7.1% +7.6 ppts

(1) Before amortisation of acquired intangibles and exceptional items

Revenue was up by 9.4% at constant currency. Underlying operating profit rose
by GBP3.3m, including a GBP0.5m boost from currency movements. The underlying
operating profit margin more than doubled to 14.7% as a result of the sharp
increase in revenue and the benefits of operational gearing on the realigned
cost base. Client travel spend rose by 28% in real terms and travel activity
was up 33%.

There has been a progressive recovery in the North American market since our
full-year report in May. The trend towards online self-booking by corporate
clients has continued and now represents almost half of all travel bookings.
Our investment over the past few years to reduce our cost base and improve
productivity is helping us manage these trends in this competitive market. Work
to streamline our front, middle and back-office operations and further reduce
our operating costs via a number of specific initiatives is ongoing.

Our loyalty business in Canada, which manages the redemption of credit card
loyalty points for several banks, performed very well, with cardholders
choosing to redeem their points, rather than cash, for travel rewards.

Asia Pacific

Six months ended 30 September 2010 2009 Change

Revenue GBP10.1m GBP8.3m +21.7%

Operating loss (GBP0.1m) (GBP0.5m) +GBP0.4m

Underlying operating loss (1) (GBP0.1m) (GBP0.5m) +GBP0.4m

Underlying margin (1) -1.0% -6.0% +5.0 ppts

(1) Before amortisation of acquired intangibles and exceptional items

Revenue was up by 7.4% at constant currency with good growth across the region.
Client travel spend rose by 28% year-on-year at constant currency and travel
activity was up 25%.

In Australia, our largest market in the region, clients are becoming more
optimistic about the economic recovery. The roll-out of HRG's fully-integrated
travel management system for the Queensland Government progressed well during
the period, and our appointment to the panel of preferred suppliers for the
Australian Federal Government should offer further growth opportunities. As in
other regions, we are seeing a general trend towards more online self-booking
and this now represents around half of all travel bookings.

Singapore also performed well and, as a result, we have added office space and
are recruiting additional staff to support this growth. Singapore is becoming a
key hub for travel consolidation in the region and we have recently opened a
new regional service centre to provide a multi-country service consolidation
for one of our larger clients.

Our joint ventures in Hong Kong and mainland China both grew nicely but, as
associates, their results are not included in the table above.

Spendvision

Six months ended 30 September 2010 2009 Change

Revenue GBP6.0m GBP5.7m +5.3%

Operating profit GBP0.3m GBP0.5m -GBP0.2m

Underlying operating profit (1) GBP0.4m GBP0.6m -GBP0.2m

Underlying margin (1) 6.7% 10.5% -3.8 ppts

(1) Before amortisation of acquired intangibles and exceptional items

Revenue was down 3.5% at constant currency. Underlying operating profit fell by
GBP0.2m, with little impact from currency movements, due to continuing investment
in product delivery and customer support. These investments are an essential
part of our growth plans for Spendvision.

The rollout of the Visa IntelliLink Spend Management product, a white-label
version of the Spendvision platform, is continuing and is expected to be
installed in all Visa commercial card issuing banks around the world by the end
of 2011. As part of the Visa contract, we signed an agreement with Barclaycard
for the implementation of card management and payment applications.

We also signed a contract with Rio Tinto for worldwide implementation of
Spendvision expense management.

Technology

Throughout the recession, HRG's technology became more important to clients as
they sought to manage their travel expenditure, and many changes in practice
have been retained as conditions have improved. HRG's technology is both
flexible and independent, with a clear focus of addressing client needs in a
dynamic market.

During the first half of the financial year, we released upgrades to all our
major technology products. Client adoption of HRG's i-SuiteTM, offering clients
a gateway to both HRG and third-party products, continues to grow rapidly, with
more than 500,000 users now having access.

We began development during the period of a white label version of HRG
OnlineTM, our internally-developed, proprietary online booking tool, following
a deal signed with Travelport at the end of last financial year. Recognising
the value of the application, the agreement enables Travelport to market a
fully-branded version of the tool to its corporate client base, thus extending
the reach of HRG corporate technology beyond its own in-house use.

In July, we announced a mobile technology partnership with Sabre Travel Network
which enables us to offer Tripcase, a mobile itinerary management application,
to our clients. In addition to location-based messaging capabilities, this
pioneering solution includes full integration of travel plans, which allows HRG
to enhance the traveller experience through the provision of timely and
relevant information delivered to a mobile device.

In August, we launched our innovative HRG Security SuiteTM at the Houston
conference of the National Business Travellers Association (NBTA). Managing
traveller safety and security is a key part of any corporate travel programme
and HRG Security SuiteTM delivers a full range of security services from
pre-trip destination intelligence, traveller tracking and security training, to
international emergency response services in association with global security
experts, red24.

In September, we launched a new cost saving function for corporate rail travel.
The new feature, unveiled within HRG OnlineTM version 8.6, enables clients to
view savings on ticket costs and manage UK rail spend more effectively.

Following an agreement reached last year with a global provider of broadband
and wireline/wireless communications, we have begun to consolidate our IP WAN
(voice and data traffic) as part of our unified communications strategy, with
successful deployment in Germany, the USA and Canada during the period.

We will continue to develop flexible technology, for access from any location
or mobile device, as part of our vision for leadership amongst global travel
management companies.

Additional Financial Disclosures

Revenue

Reported revenue increased by 9.0% to GBP169.2m, comprised of an increase of 5.8%
at constant exchange rates and an increase of 3.2% from favourable currency
movements.

Revenue per Employee

Reported revenue per employee increased by 13.9%, from GBP28.7k to GBP32.7k. At
constant exchange rates, the increase was 10.5%.

Operating expenses

Reported operating expenses increased by 2.4% to GBP151.7m.

Underlying operating expenses, before amortisation of acquired intangibles and
exceptional items, increased by 4.0% from GBP144.0m to GBP149.7m. This represents
an increase of 1.0% at constant exchange rates, comprising 0.9% for staff costs
and 1.2% for other expenses.

The increase of 0.9% in staff costs compares to a reduction of 4.3% in average
staff numbers, and reflects higher costs for staff incentives and UK pensions.

Underlying operating profit

Underlying operating profit, before amortisation of acquired intangibles and
exceptional items, increased by 73%, from GBP11.3m to GBP19.5m, and included a
benefit of GBP0.8m from favourable currency movements. The underlying operating
profit margin, which is not affected by currency movements, increased from 7.3%
to 11.5%.

Exceptional items

There were no exceptional items reported in the period. The GBP2.3m of cost in
the prior year related to planned cost reduction programmes in Europe.

Net finance costs

Net finance costs increased from GBP3.8m to GBP4.3m, reflecting the accelerated
amortisation of bank fees ahead of the renewal of the Group's funding
arrangements, and higher pension accounting charges. Net external interest
decreased by GBP0.3m, due to lower average borrowing and a modest reduction in
interest rates.

For the 12 months to September 2010, net external interest costs were covered
15.2 times by EBITDA (2009: 8.3x).

Taxation

The GBP4.1m charge for the current year represents the expected full-year
effective tax rate of 31%, and compares to an effective tax rate of 33% in the
prior year. The current rate of 31% includes a GBP0.2m charge relating to the
impact of a reduction in the UK corporation tax rate from 28% to 27%. An
additional charge of GBP1.4m is reflected in the Consolidated Statement of
Comprehensive Income in respect of deferred tax assets on pension liabilities.

Cash flow

Free cash flow, which includes all cash flow except acquisitions and disposals,
dividends and the impact of foreign exchange movements on debt balances,
improved by GBP2.6m from an outflow of GBP8.7m to an outflow of GBP6.1m, and was
primarily due to improved trading offset by increased working capital outflows.

In addition to free cash flow, the final dividend of GBP2.4m in respect of the
year ended March 2010 was paid to shareholders during the period. There was no
final dividend payment in the prior year.

Funding and net debt

The Group has recently completed the re-financing of its GBP220m committed credit
lines. The principal borrowing is a GBP190m multi-currency revolving credit
facility (RCF) that is committed until November 2014. The facilities are used
for loans, letters of credit and guarantees, with interest based on LIBOR/
EURIBOR plus a margin and costs. In addition, we have secured a GBP30m fixed rate
loan that is repayable by 2018 and have also retained uncommitted facilities,
amounting to around GBP23m at 30 September 2010, which are used for local
flexibility.

The principal covenants will continue to be measured twice each year, at the
end of March and the end of September, against EBITDA. 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. The definition of EBITDA for covenant
purposes is not materially different to the definition used in these financial
statements.

Net debt of GBP85.8m is GBP10.2m lower than the level at 30 September 2009 and
compares to GBP77.5m at 31 March 2010. This translates into gearing of 46% (31
March 2010: 45%), or 123% (31 March 2010: 99%) including the pension deficits
and related deferred tax assets. The Group has an active programme to reduce
working capital requirements at the end of each half-year reporting period.
This programme reduced working capital by approximately GBP26m in September 2010,
compared to GBP25m in September 2009 and GBP35m in March 2010.

Pensions

The Group pension deficits under IAS19 have increased by GBP28.7m from 31 March
2010 to GBP155.1m before tax (GBP115.3m after tax).

The deficit for the principal UK defined benefit scheme increased by GBP28.8m to
GBP144.7m over the same period, with a lower discount rate adding GBP39.9m and a
lower inflation rate reducing liabilities by GBP16.2m. 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 2010 there was a deferred tax asset of GBP39.1m (31 March 2010: GBP
32.4m) related to the UK deficit and GBP0.7m (31 March 2010: GBP0.7m) related to
the overseas schemes.

Foreign currency

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

Income Statement Balance Sheet

2010 2009 Change 2010 2009* Change

Euro 1.19 1.14 -4% 1.15 1.12 -3%

Swiss Franc 1.61 1.73 +7% 1.54 1.60 +4%

US Dollar 1.53 1.60 +4% 1.57 1.52 -3%

Canadian 1.59 1.79 +11% 1.62 1.54 -5%
Dollar

* As at 31 March 2010.

Going concern

The Board believes that the Group has access to adequate resources 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 2010 2009

GBPm GBPm

Revenue 169.2 155.3

EBITDA before exceptional items 24.3 15.8

Depreciation and amortisation (1) (4.8) (4.5)

Underlying operating profit 19.5 11.3

Amortisation of acquired intangibles (2.0) (1.9)

Exceptional items -- (2.3)

Operating profit 17.5 7.1

Share of associates and joint ventures 0.1 --

Net finance costs (4.3) (3.8)

Profit before tax 13.3 3.3

Taxation (4.1) (1.1)

Profit for the period 9.2 2.2

Summary balance sheet

30 September 31 March

2010 2010

GBPm GBPm

Goodwill and other intangible assets 249.5 253.5

Property, plant, equipment and 16.0 17.5
investments

Working capital (80.2) (101.2)

Current tax liabilities (net) (8.6) (8.4)

Net debt (85.8) (77.5)

Pension liabilities (pre-tax) (155.1) (126.4)

Deferred tax assets (net) 52.0 47.2

Provisions and other items (4.0) (4.0)

Net (liabilities)/assets (16.2) 0.7

Summary cash flow statement

Restated

Six months ended 30 September 2010 2009

GBPm GBPm

EBITDA before exceptional items 24.3 15.8

Cash flow from exceptional items (0.9) (4.6)

Working capital movements (19.4) (7.4)

Interest paid (1.4) (2.0)

Tax paid (2.3) (2.2)

Capital expenditure (3.9) (4.9)

Pension funding in excess of EBITDA (3.0) (3.7)
charge

Other movements 0.5 0.3

Free cash (outflow) (6.1) (8.7)

Acquisitions and disposals (0.3) --

Dividends paid to external shareholders (2.4) --

Currency translation 0.5 (0.9)

Other movements -- (1.1)

(Increase) in net debt (8.3) (10.7)

1. Excluding amortisation of acquired intangibles

The comparatives in the summary cash flow statement have been restated to
separately identify cash flow from exceptional items.

Hogg Robinson Group plc

Consolidated Income Statement

For the period ended 30 September 2010

Notes Half year ended 30
September

2010 2009

GBPm GBPm

Revenue 6 169.2 155.3

Operating expenses 7 (151.7) (148.2)



Operating profit 6 17.5 7.1

Analysed as:

Underlying operating profit 6 19.5 11.3

Amortisation of acquired intangibles (2.0) (1.9)

Exceptional items 7 - (2.3)



Operating profit 17.5 7.1



Share of results of associates and joint 0.1 -
ventures

Finance income 9 0.1 0.1

Finance costs 9 (4.4) (3.9)



Profit before tax 13.3 3.3

Income tax expense 10 (4.1) (1.1)



Profit for the period from continuing 9.2 2.2
operations



Profit attributable to:

Equity Shareholders of the Company 11 8.5 1.7

Minority interests 0.7 0.5



9.2 2.2




Note Half-year ended 30
September

2010 2009

pence pence

Earnings per share

Basic 11 2.8 0.6

Diluted 2.7 0.5

Hogg Robinson Group plc

Consolidated Statement of Comprehensive Income

For the period ended 30 September 2010

Notes Half year ended 30
September

2010 2009

GBPm GBPm

Profit for the period 9.2 2.2



Other comprehensive income

Currency translation differences 18 (1.2) (8.9)

Actuarial loss on pension schemes (30.2) (64.5)

Deferred tax movement on pension liability 8.4 18.0

Deferred tax movement on pension liability
attributable

to change in headline tax rate 10 (1.4) -



Other comprehensive loss for the period, net of (24.4) (55.4)
tax



Total comprehensive loss for the period (15.2) (53.2)



Total comprehensive loss attributable to:

Equity Shareholders of the Company (15.9) (53.7)

Minority interests 0.7 0.5



(15.2) (53.2)




Hogg Robinson Group plc

Consolidated Balance Sheet

As at 30 September 2010

Notes 30 31 March
September

2010 2010

GBPm GBPm

Non current assets

Goodwill and other intangible assets 13 249.5 253.5

Property, plant and equipment 14 13.3 14.8

Investments accounted for using the equity 2.7 2.7
method

Trade and other receivables 0.1 0.1

Deferred tax assets 53.9 48.8

319.5 319.9



Current assets

Trade and other receivables 107.8 115.4

Financial assets - derivative financial 0.1 0.2
instruments

Current tax assets 0.1 1.0

Cash and cash equivalent assets 15 53.3 58.8

161.3 175.4



Total assets 480.8 495.3



Non current liabilities

Financial liabilities - borrowings 15 (137.7) (135.1)

Deferred tax liabilities (1.9) (1.6)

Retirement benefit obligations 16 (155.1) (126.4)

Provisions (2.9) (3.5)

(297.6) (266.6)



Current liabilities

Financial liabilities - borrowings 15 (1.4) (0.4)

Financial liabilities - derivative financial (0.4) -
instruments

Current tax liabilities (8.7) (9.4)

Trade and other payables (188.1) (216.7)

Provisions (0.8) (1.5)

(199.4) (228.0)



Total liabilities (497.0) (494.6)



Net (liabilities) / assets (16.2) 0.7

Capital and reserves attributable to equity
shareholders

Share capital 17 3.1 3.1

Share premium 172.2 172.2

Other reserves 18 13.2 13.4

Retained earnings (208.5) (191.4)



(20.0) (2.7)

Minority interests 3.8 3.4

Total (deficit) / equity (16.2) 0.7


Hogg Robinson Group plc

Consolidated Statement of Changes in Equity

As at 30 September 2010

Attributable to owners of the
Company

Share Share Other Retained Minority Total
capital premium reserves earnings Total Interest 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 movement - - - 18.0 18.0 - 18.0
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



Transactions with
owners:

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

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



Total transactions - - - (1.1) (1.1) (0.5) (1.6)
with owners





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



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



Retained profit for - - - 13.4 13.4 0.9 14.3
the year

Other comprehensive
income:

Actuarial loss on - - - (66.0) (66.0) - (66.0)
pension schemes

Deferred tax movement - - - 18.7 18.7 - 18.7
on pension liability

Currency translation - - (11.8) - (11.8) - (11.8)
differences



Total comprehensive - - (11.8) (33.9) (45.7) 0.9 (44.8)
income



Transactions with
owners:

Dividends - - - (1.2) (1.2) (1.0) (2.2)

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

Share-based incentives - - 1.1 - 1.1 - 1.1



Total transactions - - 1.1 (2.3) (1.2) (1.0) (2.2)
with owners





Balance at 31 March 3.1 172.2 13.4 (191.4) (2.7) 3.4 0.7
2010



Hogg Robinson Group plc

Consolidated Statement of Changes in Equity (Continued)

As at 30 September 2010

Attributable to owners of the
Company

Share Share Other Retained Minority Total
capital premium reserves earnings Total Interest Equity

GBPm GBPm GBPm GBPm GBPm GBPm GBPm

Balance at 1 April 3.1 172.2 13.4 (191.4) (2.7) 3.4 0.7
2010



Retained profit for - - - 8.5 8.5 0.7 9.2
the period

Other comprehensive
income:

Actuarial loss on - - - (30.2) (30.2) - (30.2)
pension schemes

Deferred tax movement - - - 8.4 8.4 - 8.4
on pension liability

Deferred tax movement
on pension liability
attributable

to change in headline - - - (1.4) (1.4) - (1.4)
tax rate

Currency translation - - (1.2) - (1.2) - (1.2)
differences



Total comprehensive - - (1.2) (14.7) (15.9) 0.7 (15.2)
income



Transactions with
owners:

Dividends - - - (2.4) (2.4) (0.3) (2.7)

Share-based incentives - - 1.0 - 1.0 - 1.0



Total transactions - - 1.0 (2.4) (1.4) (0.3) (1.7)
with owners





Balance at 30 3.1 172.2 13.2 (208.5) (20.0) 3.8 (16.2)
September 2010



Hogg Robinson Group plc

Consolidated Statement of Cash Flows

For the period ended 30 September 2010

Notes Half year ended 30
September

2010 2009

GBPm GBPm

Cash flows from operating activities

Cash generated from operations 19 1.8 0.9

Interest paid (1.5) (2.4)

Tax paid (2.3) (2.2)



Cash flows from operating activities - net (2.0) (3.7)



Cash flows from investing activities

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

Purchase of property, plant and equipment (1.1) (2.1)

Purchase and internal development of intangible (2.8) (2.9)
assets

Proceeds from sale of property, plant and - 0.1
equipment

Interest received 0.1 0.2

Dividends received from associates and joint - 0.2
ventures



Cash flows from investing activities - net (4.1) (4.5)



Cash flows from financing activities

Repayment of borrowings (3.3) (13.7)

New borrowings 6.5 -

Cash effect of currency swaps 0.6 0.8

Employee Benefits Trust - (1.1)

Dividends paid to external shareholders (2.4) -

Dividends paid to minority shareholders (0.3) (0.5)



Cash flows from financing activities - net 1.1 (14.5)



Net decrease in cash and cash equivalents (5.0) (22.7)

Cash and cash equivalents at the beginning of 58.2 63.3
the period

Exchange rate effects (1.0) (0.3)



Cash and cash equivalents at the end of the 52.2 40.3
period



Cash and cash equivalent assets 53.3 41.4

Overdrafts (1.1) (1.1)



52.2 40.3




Hogg Robinson Group plc

Notes to the Consolidated Half-Yearly Financial Information

For the period ended 30 September 2010

1 General information

Hogg Robinson Group plc is a public limited company, incorporated in the UK
under the Companies Act 2006. 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 30 November 2010.

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 2010 were approved by the Board
of Directors on 26 May 2010 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 Chapter 3
of Part 16 of the Companies Act 2006.

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 2010 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 2010, 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 2010, as
described in those statements.

The following amended standards and interpretations to existing standards are
mandatory for the first time for the financial year beginning 1 April 2010. The
adoption of these amendments and interpretations does not have a material
impact on the condensed consolidated half-yearly financial information:

* IAS 27 (revised), Consolidated and Separate Financial Statements, effective
for accounting periods beginning on or after 1 July 2009. The revised
standard requires the effect of all transactions with non-controlling
interests to be recorded in equity if there is no change in control and
these transactions will no longer result in goodwill or gains and losses.

* IFRS 2 (amendments), Group cash-settled share-based payments transactions.
The amendments expand on the guidance in the classification of group
arrangements.

* IFRIC 17, Distributions of Non-cash Assets to Owners, effective for
accounting periods beginning on or after 1 July 2009. The interpretation
was published in November 2008 and provides guidance on accounting for
arrangements whereby an entity distributes non-cash assets to shareholders
either as a distribution of reserves or as dividends.

The following standards, amendments to standards and interpretations have been
issued, but are not effective for the financial year beginning 1 April 2010 and
have not been early adopted. Unless otherwise stated, the Directors anticipate
that the adoption of these standards, amendments and interpretations will not
have a material impact on the Group:

* IAS 24 (revised), Related Party Disclosures, effective from 1 January 2011.
This supersedes IAS 24, Related Party Disclosures, issued in 2003.

* IFRS 9, Financial Instruments, effective from 1 January 2013, addresses the
classification and measurement of financial assets. The impact on the Group
of adopting IFRS 9 is yet to be assessed.

* IFRIC 14 (amendment), IAS 19 - Prepayments of a minimum funding
requirement, effective for accounting periods beginning on or after 1
January 2011.

* IFRIC 19, Extinguishing financial liabilities with financial instruments,
effective for accounting periods beginning on or after 1 July 2010,
clarifies the requirements of IFRSs when an entity renegotiates the terms
of a financial liability with its creditor and the creditor agrees to
accept the entity's shares or other equity instruments in full or partial
settlement of the financial liability.

The following amendments to standards and interpretations are effective for the
financial year beginning 1 April 2010 but are not relevant to the Group:

* Amendment to IFRS 1, Additional exemptions for first-time adopters

* IFRIC 18, Transfers of assets from customers

4 Risks and uncertainties

The principal risks and uncertainties affecting the Group were identified as
part of the Business Review, set out on pages 7 to 8 of the Hogg Robinson Group
plc Annual Report and Financial Statements 2010, a copy of which is available
on the Group's website www.hoggrobinsongroup.com. These remain the relevant
risks for the second half of the current financial year and comprise strategic,
financial, operational and external risks.

5 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 months of its
financial year, principally reflecting increased travel activity by its clients
during this period.

6 Operating segments

The chief operating decision-maker has been identified as the Executive
Management Team, which reviews 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
two core activities, Corporate Travel Management, which is analysed into three
distinct geographic segments, and Spendvision. The Group's internal reporting
processes do not distinguish between the numerous sources of income that
comprise revenue for Corporate Travel Management. The performance of the
operating segments is assessed based on a measure of operating profit excluding
amortisation of acquired intangible assets and items of an exceptional nature.
Finance income and costs and income tax are not included in the result for each
operating segment that is reviewed by the Executive Management Team. Other
information provided to the Executive Management Team, except as noted below,
is measured in a manner consistent with that in the condensed consolidated
half-yearly financial information.

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.

Corporate Travel Management

North Asia
Europe America Pacific Total Spendvision Total

GBPm GBPm GBPm GBPm GBPm GBPm

Half year ended 30 September
2010

Revenue from external customers 115.1 38.0 10.1 163.2 6.0 169.2

Underlying operating profit 13.6 5.6 (0.1) 19.1 0.4 19.5

Amortisation of acquired (1.5) (0.4) - (1.9) (0.1) (2.0)
intangibles

Operating profit before 12.1 5.2 (0.1) 17.2 0.3 17.5
exceptional items

Exceptional items - - - - - -

Operating profit 12.1 5.2 (0.1) 17.2 0.3 17.5

Underlying margin 11.8% 14.7% -1.0% 11.7% 6.7% 11.5%

Half year ended 30 September
2009 (restated)

Revenue from external customers 109.1 32.2 8.3 149.6 5.7 155.3

Underlying operating profit 8.9 2.3 (0.5) 10.7 0.6 11.3

Amortisation of acquired (1.5) (0.3) - (1.8) (0.1) (1.9)
intangibles

Operating profit before 7.4 2.0 (0.5) 8.9 0.5 9.4
exceptional items

Exceptional items (2.3) - - (2.3) - (2.3)

Operating profit 5.1 2.0 (0.5) 6.6 0.5 7.1

Underlying margin 8.2% 7.1% -6.0% 7.2% 10.5% 7.3%


The segmental disclosures for the half year ended 30 September 2009 have been
restated to reflect Spendvision as a separate operating segment.

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.

Corporate Travel Management

North Asia
Europe America Pacific Total Spendvision Total

GBPm GBPm GBPm GBPm GBPm GBPm

Total segment assets

30 September 2010 263.6 90.3 12.8 366.7 6.8 373.5

31 March 2010 272.0 95.7 12.1 379.8 6.9 386.7


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

30 September 31 March

2010 2010

GBPm GBPm

Total segment assets 373.5 386.7

Cash and cash equivalent assets 53.3 58.8

Current tax assets 0.1 1.0

Deferred tax assets 53.9 48.8

480.8 495.3


7 Operating expenses

Half year ended 30
September

2010 2009

GBPm GBPm

Underlying operating expenses:

Staff costs (note 8) 98.8 95.4

Amortisation of intangible assets, other than
acquired

intangible assets 2.2 2.1

Depreciation of property, plant and equipment 2.6 2.4

Operating lease rentals - buildings 7.3 7.1

Operating lease rentals - other assets 0.9 0.9

Currency translation differences 0.1 0.2

Other expenses 37.8 35.9

149.7 144.0

Amortisation of acquired intangibles:

Amortisation of client relationships 1.9 1.8

Amortisation of other acquired intangible assets 0.1 0.1

2.0 1.9

Exceptional items:

Restructuring costs:

Staff costs (note 8) - 1.8

Other expenses - 0.5

- 2.3

Total operating expenses 151.7 148.2


Restructuring costs during the half year ended 30 September 2009 related to
planned cost reduction programmes in Europe.

8 Staff costs

Half year ended 30 September

2010 2010 2010 2009 2009 2009

Before Before
exceptional Exceptional exceptional Exceptional
items items Total items items Total

GBPm GBPm GBPm GBPm GBPm GBPm

Salaries 82.7 - 82.7 80.1 - 80.1

Social security costs 9.4 - 9.4 9.9 - 9.9

Pension costs 5.1 - 5.1 4.5 - 4.5

Redundancy and 0.6 - 0.6 0.9 1.8 2.7
termination costs

Share-based incentives 1.0 - 1.0 - - -



98.8 - 98.8 95.4 1.8 97.2



Pension costs comprise:

Defined benefit schemes 2.0 - 2.0 1.3 - 1.3

Defined contribution 3.1 - 3.1 3.2 - 3.2
schemes



5.1 - 5.1 4.5 - 4.5



Half year ended 30
September

2010 2009

number number

Average monthly number of staff employed by the 5,183 5,416
Group



9 Finance income and finance costs

Half year ended 30 September

2010 2009

GBPm GBPm

Finance income - bank interest 0.1 0.1

Interest on bank loans and overdrafts (1.5) (1.9)

Amortisation of issue costs on bank loans (0.8) (0.3)

Expected return on pension scheme assets less

interest cost on pension scheme liabilities (1.9) (1.6)

Other finance charges (0.2) (0.1)

Finance costs (4.4) (3.9)

Net finance costs (4.3) (3.8)

10 Income tax expense

The tax charge is split as follows:

Half year ended 30 September

2010 2009

GBPm GBPm

United Kingdom 2.0 2.2

Overseas 1.9 (1.1)

Change in headline tax rate 0.2 -

4.1 1.1


Half year ended 30 September

2010 2009

GBPm GBPm

On recurring business 4.1 1.7

Exceptional items - (0.6)

4.1 1.1


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

Tax rate change

The UK government is reducing the rate of corporation tax from 28% to 27% with
effect from 1 April 2011. Consequently, the Group is required to revalue all of
its recognised UK deferred tax assets and liabilities. The revaluation is
anticipated to result in a full year deferred tax charge to the Consolidated
Income Statement of GBP0.2m, together with a charge to the Consolidated Statement
of Comprehensive Income of GBP1.4m in respect of deferred tax assets on pension
liabilities. The Group is reflecting the full impact of GBP1.6m in the first half
of the year.

Further proposals to reduce the UK rate by 1% per annum to 24% by April 2014
have not been substantively enacted at the balance sheet date and, therefore,
are not reflected in this condensed consolidated half-yearly financial
information.

11 Earnings per share

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

Half year ended 30
September

2010 2009

pence pence

Earnings per share

Basic 2.8 0.6

Diluted 2.7 0.5

Half year ended 30
September

2010 2009

GBPm GBPm

Earnings for the purposes of earnings per share

Profit for the period 9.2 2.2

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

Total 8.5 1.7


Half year ended 30
September

2010 2009

number number

m m

Weighted average number of Ordinary shares in issue

Issued (for basic EPS) 300.7 302.3

Dilutive potential ordinary shares 11.7 9.6

For diluted EPS 312.4 311.9

Underlying earnings per share

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

Half year ended 30
September

2010 2009

pence pence

Underlying earnings per share

Basic 3.3 1.6

Diluted 3.2 1.5

Half year ended 30
September

2010 2009

GBPm GBPm

Earnings for the purposes of underlying earnings per share

Profit before tax from continuing operations 13.3 3.3

Add: amortisation of acquired intangibles 2.0 1.9

Add: exceptional items - 2.3

Underlying profit before tax 15.3 7.5

Underlying income tax expense (4.7) (2.3)

Underlying profit for the financial year 10.6 5.2

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

Total 9.9 4.7


Underlying earnings are earnings before amortisation of acquired intangibles
and exceptional items and related income tax expense.

12 Dividends

A dividend that related to the year ended 31 March 2010 amounting to 0.8p per
ordinary share (GBP2,405,819) was paid on 2 August 2010. The dividend was paid to
shareholders who were on the register at 2 July 2010. The Employee Benefits
Trust waived its rights to dividends in respect of 7,035,546 shares held in the
Company.

The Directors have declared an interim dividend in respect of the six months
ended 30 September 2010 of 0.5p payable on 6 January 2011 to shareholders who
are on the register at 10 December 2010. This interim dividend, amounting to GBP
1.5m has not been recognised as a liability in this half-yearly financial
report, in accordance with IAS 10, Events after the Balance Sheet Date.

13 Goodwill and other intangible assets

30 September 31 March

2010 2010

GBPm GBPm

Goodwill 219.6 221.8

Other intangible assets 29.9 31.7

249.5 253.5


Computer software

Externally Internally Client
Goodwill acquired generated relationships Total

GBPm GBPm GBPm GBPm GBPm

Cost

At 1 April 2009 252.0 16.9 12.1 38.1 319.1

Additions for the year - 1.6 5.1 - 6.7

Disposals for the year - (2.9) - - (2.9)

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

Exchange differences (3.6) 0.6 0.7 (0.7) (3.0)

At 31 March 2010 248.2 16.2 17.9 37.4 319.7

Additions for the period - 0.3 2.5 - 2.8

Reclassification of assets - (0.4) - - (0.4)

Exchange differences (2.2) (0.2) - (0.1) (2.5)

At 30 September 2010 246.0 15.9 20.4 37.3 319.6


Accumulated amortisation
At 1 April 2009 26.4 12.0 4.5 18.2 61.1

Amortisation charge for the - 1.9 2.6 3.6 8.1
year

Disposals for the year - (2.9) - - (2.9)

Exchange differences - 0.2 (0.1) (0.2) (0.1)

At 31 March 2010 26.4 11.2 7.0 21.6 66.2

Reclassification of assets - (0.3) - - (0.3)

Amortisation charge for the - 0.8 1.5 1.9 4.2
period

At 30 September 2010 26.4 11.7 8.5 23.5 70.1

Carrying amount

At 1 April 2009 225.6 4.9 7.6 19.9 258.0

At 31 March 2010 221.8 5.0 10.9 15.8 253.5

At 30 September 2010 219.6 4.2 11.9 13.8 249.5


14 Property, plant and equipment

Plant and
Properties equipment Total

GBPm GBPm GBPm

Cost

At 1 April 2009 10.6 46.4 57.0

Additions for the year 0.2 4.3 4.5

Disposals for the year (0.6) (2.2) (2.8)

Exchange differences 0.3 1.3 1.6

At 31 March 2010 10.5 49.8 60.3

Additions for the period 0.1 1.3 1.4

Reclassification of assets - 0.4 0.4

Disposals for the period - (0.6) (0.6)

Exchange differences (0.2) (0.7) (0.9)

At 30 September 2010 10.4 50.2 60.6

Accumulated depreciation

At 1 April 2009 6.6 35.3 41.9

Depreciation charge for the year 0.9 4.2 5.1

Disposals for the year (0.6) (1.9) (2.5)

Exchange differences 0.3 0.7 1.0

At 31 March 2010 7.2 38.3 45.5

Reclassification of assets - 0.3 0.3

Depreciation charge for the period 0.3 2.3 2.6

Disposals for the period - (0.5) (0.5)

Exchange differences (0.2) (0.4) (0.6)

At 30 September 2010 7.3 40.0 47.3

Carrying amount

At 1 April 2009 4.0 11.1 15.1

At 31 March 2010 3.3 11.5 14.8

At 30 September 2010 3.1 10.2 13.3


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

15 Financial liabilities - borrowings

30 September 31 March

2010 2010

GBPm GBPm

At amortised cost

Current (due within one year)

Overdrafts 1.1 0.6

Bank loans 0.1 0.2

Unamortised loan issue costs - (0.6)

Finance leases 0.2 0.2

Total current 1.4 0.4

Non-current (due after more than one year)

Bank loans 137.7 135.2

Unamortised loan issue costs - (0.2)

Finance leases - 0.1

Total non-current 137.7 135.1

Total 139.1 135.5

Net debt

Total financial liabilities - borrowings 139.1 135.5

Add back: Unamortised loan issue costs - 0.8

Cash and cash equivalent assets (53.3) (58.8)

Net debt 85.8 77.5


16 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 a maximum of the Retail Prices 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

2010 2010

GBPm GBPm

UK scheme:

Defined benefit obligations (350.3) (319.3)

Fair value of plan assets 205.6 203.4

Deficit - UK Scheme (144.7) (115.9)

Deficit - Overseas Schemes (10.4) (10.5)

(155.1) (126.4)


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

Half year ended 30
September

2010 2009

GBPm GBPm

Current service charge 1.3 0.7

Expected return on scheme assets (7.1) (6.0)

Charge to finance costs 8.7 7.4

Total charge to the Consolidated Income Statement 2.9 2.1


The current service charge is computed based on the actuarial assumptions in
place at the beginning of the financial year and translates to 20.6% of
pensionable salaries (2009: 10.5%).

The key assumptions used for the UK Scheme were:

30 September 31 March

2010 2010

Rate of increase in final pensionable salary 3.00% 3.50%

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

Rate of increase in pensions in payment - accrued 3.00% 3.50%
after 1999

Discount rate 5.00% 5.50%

Inflation 3.00% 3.50%

Expected rate of return on plan assets:

Equity instruments 7.50% 8.00%

Debt instruments 3.50% 4.50%

Property 7.50% 8.00%

Other assets 3.80% 4.40%

17 Share capital

30 September

2010

number

Authorised

Ordinary shares of 1p each 513,808,171

Issued, called up and fully paid

At 1 April 2010 and 30 September 2010 307,762,884

30 September

2010

GBPm

Issued, called up and fully paid

Ordinary shares of 1p each 3.1


18 Other reserves

Share-based Exchange Other
incentives reserve reserves

GBPm GBPm GBPm

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

Balance at 1 April 2009 2.1 22.0 24.1

Other comprehensive income:

Currency translation differences - (11.8) (11.8)

Transactions with owners:

Share-based incentives 1.1 - 1.1

Balance at 31 March 2010 3.2 10.2 13.4

Balance at 1 April 2010 3.2 10.2 13.4

Other comprehensive income:

Currency translation differences - (1.2) (1.2)

Transactions with owners:

Share-based incentives 1.0 - 1.0

Balance at 30 September 2010 4.2 9.0 13.2


19 Cash generated from operations

Half year ended 30 September

2010 2009

GBPm GBPm

Profit before tax from continuing operations 13.3 3.3

Adjustments for:

Depreciation and amortisation 6.8 6.4

Net increase in provisions 0.7 3.2

Share of results of associates and joint (0.1) -
ventures

Net finance costs 4.3 3.8

Other timing differences 1.2 0.1

26.2 16.8

Cash expenditure charged to provisions (2.0) (4.8)

Change in trade and other receivables 6.1 3.2

Change in trade and other payables (25.5) (10.6)

Pension funding in excess of charge to (3.0) (3.7)
operating profit

Cash generated from operations 1.8 0.9


20 Related party transactions

There have been no material changes in the nature of related party transactions
since 31 March 2010 as reported in note 28 of the Group's 31 March 2010 Annual
Report and Consolidated Financial Statements.

21 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 2010 Annual Report and
Consolidated Financial Statements.

Hogg Robinson Group plc

Statement of Directors' Responsibilities

The Directors confirm that, to the best of their knowledge, 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
information, 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 as follows:

J D Coombe(1) Chairman

D J C Radcliffe Chief Executive

J A Steadman Group Finance Director

K A Ruffles Chief Operating Officer (appointed 1 October 2010)

A E Isaac(1) (2)

(1) Non-Executive Directors

(2) Senior Independent Director

By Order of the Board

Keith Burgess

Company Secretary

30 November 2010

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 2010, 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 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 ended 30 September 2010 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
London

30 November 2010

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