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Hogg Robinson

HRG 69p -1.0  -1.4%
26/05/17 5.00k

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HOGG ROBINSON | Interim Management Statement | RNS

16 February 2011

Hogg Robinson Group plc

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


Hogg Robinson Group plc, the international corporate travel services company,
today issues an Interim Management Statement for the year ending 31 March 2011,
covering the period from 1 October 2010 to date.

Group performance

Since the announcement of the half-year results on 30 November 2010, the Group
has continued to trade well and in line with management expectations, with no
material financial impact from the recent weather disruptions. For the four
completed months to the end of January, travel bookings were up by
approximately 15% and client spend rose by approximately 15% in real terms,
compared to the prior year. Our revenue increased by around 13% (up 10% at
constant currency). We are encouraged that corporate travel activity has
increased across all of our regions, with the highest growth in Asia Pacific.

We have continued to manage our cost base closely, taking into account that our
clients are travelling more, to ensure that our strategy of delivering value
through first-class service is met. As reported in our November interims, we
have been adding capacity to ensure that we continue to deliver excellent
service and to support the expected continuing growth.


We believe the key markets in which HRG operates remain attractive and will
continue to grow. We have a clear strategy and are well positioned to take
advantage of the increasing travel activity as the global economic recovery

The Board believes that HRG will continue to grow and now anticipates that
underlying profit before taxation for the full year will be slightly ahead of
previous expectations.

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

"I am pleased to report that the encouraging revenue momentum that we saw
through the first half of the year has continued. During a period that included
some exceptionally difficult weather conditions, HRG has been able to further
demonstrate its value to clients as we work to help them make alternative
travel arrangements. First-class client service is at the heart of the HRG
business model and our client retention rate remains high and the new business
pipeline is strong.

"HRG is also leading the way in the development and integration of mobile
technology in travel management and we continue to innovate and invest in our
technology to the benefit of our clients. We are confident that our clear
strategy, unwavering client focus, and global infrastructure will allow the
Group to take advantage of the improving climate and growth prospects available
to us."

Market overview

Conditions in our markets have continued to recover and this is supported by
recently published macro and industry data from a number of sources:

* The International Monetary Fund (IMF) has raised its global economic growth
forecast for 2011 to 4.5%;

* International Air Transport Association (IATA) statistics for international
passenger traffic, which includes both business and leisure travel, showed
further growth in the final quarter of 2010 such that passenger numbers are
now 4% above the pre-recession peak of early 2008. IATA has also upgraded
its financial forecast for aggregate airline profits as conditions have
continued to improve; and

* The latest global data on hotel occupancy, published by STR Global,
confirmed continued year-on-year growth in revenue per available room

Although our business does not correlate closely with any single set of data,
the figures from the IMF, IATA and STR Global show a consistent pattern of
general improvement and our business is trending similarly.

Client activity

As we noted in our interim results, client travel activity has continued to
recover, with many companies having a greater focus on travel policy compliance
and cost control. We believe that these trends are likely to continue and, with
an increasing willingness to consolidate travel activity for multiple markets
through common service centres, we look forward to the opportunities such
circumstances present.

Similar to last year, a short period of especially poor weather in Europe and
North America impacted our clients' ability to travel, although given the
diversification of our business this did not materially impact our performance.
Adverse weather conditions do provide an opportunity to reinforce the value of
HRG's service as we provide travellers with alternative itineraries. It is not
unusual for normal travel to be disrupted somewhere in the world and it is at
times like these that clients better appreciate the value of the service that
we are able to provide.

The Group's client retention rate remains high and our new business pipeline
remains strong. We have extended our relationships with Novartis, Syngenta and
Volkswagen amongst others. Noteworthy contract renewals include Atkins, BNP
Paribas, CBC, Diageo, Evonik, Magna, Procter & Gamble, Schaeffler, Siemens and
the UK Government's Ministry of Defence and Foreign & Commonwealth Office. We
have also added several new clients including Direct Energy.


HRG's technology continues to play an important role in the efficient
management of clients' travel programmes. In particular, our proprietary
Universal Super Platform should allow us to respond to the increasing use of
mobile technology. During 2010, we announced a mobile technology partnership
with Sabre Travel Network, which included TripCase, a mobile itinerary
management application. Earlier this month, we announced the extension of our
mobile capability, with an application to provide travellers with enhanced
functionality within the parameters of their own corporate travel policy,
including a hotel booking facility, flight and rail schedules, trip data,
profile and itinerary information.

Financial position

The Group's cash generation and balance sheet remain robust. Since 30 September
2010, average net debt has been approximately 14m lower than the same period
last year. There have been no material adverse events or transactions that have
impacted the Group's financial position since 30 September 2010, save for the
information provided in this statement.

Pension deficit

The Company's pension deficit remains volatile due to changes in interest rates
and inflation rates. Using assumptions based on the latest available
information, the UK deficit, which was 145m at the end of September 2010,
would have reduced by approximately 40m to 105m.


As announced at the time of the Group's interim results, we completed the
re-financing of our 220m committed credit lines in November 2010, with 190m
committed until November 2014 and 30m committed until November 2018. Based on
our current forecasts, the Board believes that these facilities provide the
Group with sufficient headroom.

- Ends -


Hogg Robinson Group +44 (0)1256 312 600

Julian Steadman, Group Finance Director

Angus Prentice, Head of Investor Relations

Tulchan Communications +44 (0)20 7353 4200

David Allchurch

Stephen Malthouse

Martin Robinson

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 over 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.


Forward-looking statements

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


Hogg Robinson Group plc is a United Kingdom-based holding company. The Company is an international corporate services company, which provides cloud-based software to help clients in travel, expense, payments and data management. It has two core activities: Travel Management, which is analyzed into three geographic segments, including Fraedom Travel, and Technology, which includes the Fraedom Payments and Expense operations. The Company is an international business-to-business (B2B) service company. The Company has three geographical corporate travel segments: Europe, North America and Asia Pacific. The Company's subsidiaries are engaged in the holding and financing, Technology, Travel Management and Support services. The Company's subsidiaries include HRG Debtco Limited, Farnborough Limited, Hogg Robinson plc, Hogg Robinson (Travel) Limited, Hogg Robinson Money Matters Limited, Farnborough Finance (2007) Limited, Fraedom Holdings Limited, Fraedom UK Limited and Wilson Albany Limited. more »

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