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HOGG ROBINSON | Half Yearly Report | RNS

RNS Regulatory News



30 November 2011

Hogg Robinson Group plc

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

Results for the six months ended 30 September 2011

Strong first-half results

Continuing good prospects



Summary of results



Six months ended 30 September

2011 2010 Change

Revenue 186.8m 169.2m +10%

Underlying earnings (1)

- Operating profit 23.4m 19.5m +20%

- Operating profit margin 12.5% 11.5% +1.0 pp

- Profit before tax 18.7m 15.3m +22%

- Earnings per share 4.1p 3.3p +24%

Reported earnings

- Operating profit 21.3m 17.5m +22%

- Profit before tax 16.6m 13.3m +25%

- Earnings per share 3.6p 2.8p +29%

Interim dividend per share 0.6p 0.5p +20%

Net debt 68.9m 85.8m -16.9m

Free cash outflow (2) (0.7m) (6.1m) +5.4m




Financial Highlights

Revenue up 10% to 187m, up 6% at constant currency (2010: up 6% at constant
currency) with growth across all travel regions and Spendvision

Underlying operating profit margin up from 11.5% to 12.5%

Profitability up across all travel regions and Spendvision

Cost management demonstrates continued flexibility

Underlying EPS up by 24% to 4.1p

Free cash flow (2) improvement of 5.4m for the six months

Net debt down 16.9m from September 2010 at 68.9m; equivalent to 1.2x EBITDA
(3) (2010: 1.6x)

New UK triennial pension valuation finalised with a modest increase in cash
contributions

Interim dividend up 20% to 0.6p per share (2010: 0.5p per share)

Full-year dividend to be at least 1.8p per share (+20% over last year)



Operational Highlights

Client travel transaction activity up 7% (2010: up 18%)

Client travel spend up 13%, up 9% at constant currency (2010: up 18% at
constant currency)

Client retention rate remains above 90%

HRG enters exploratory discussions with American Airlines on 'direct connect'

New business wins including AIG, Allianz, CGI, CSL, MMG and Posten Norge

New sales pipeline provides further support for growth



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



"The strong first-half performance continues the momentum we reported earlier
in the year. This steady and consistent growth serves to highlight the
strength of our business model, which is underpinned by our ability to help
clients maximise the value of their corporate travel budgets.



"Our strong cash flow has reduced net debt over the last 12 months and recently
we have reached a positive agreement with the UK pension trustees which
provides greater certainty regarding funding.



"We remain mindful of prevailing macroeconomic uncertainty but have confidence
that our compelling customer proposition, strong foundations and momentum will
see HRG deliver a full year in line with expectations."





Notes:

(1) Before amortisation of acquired intangibles

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

(3) Earnings before interest, tax, depreciation and amortisation (EBITDA)





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

Stephen Malthouse

Martin Robinson






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) is the award-winning international corporate
services company. Established in 1845 and headquartered in Basingstoke,
Hampshire, UK, HRG specialises in travel, expense and data management
underpinned by proprietary technology solutions and products. With a worldwide
network that comprises over 120 countries, HRG provides unparalleled local
knowledge and global expertise in North America, Europe, Asia Pacific, Africa,
Latin America and MEWA.



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 report that HRG has produced another strong set of results.
The good momentum that we achieved last financial year has continued despite
the uncertain macroeconomic conditions. We have delivered steady and
consistent growth, providing further testament to the strength of the Group's
business model and strategy. This good performance is even more creditable
given the tougher year-on-year comparatives.



The corporate travel market has continued to recover from the effects of the
recession. Following growth of 8% in 2010, industry forecasts are for a
similar growth rate in 2011. We have seen our own business expand during the
first six months of our financial year, with client spend increasing by 13%.



As our interim results indicate, our clients are travelling more frequently and
spending more on their travel than they did a year ago. However, their focus
remains one of cost consciousness balanced with a stated aim of maximising the
overall value of their travel-related expenditure. With this has come a more
mandatory approach to travel policy compliance and a geographic consolidation
of service. The application of HRG's proprietary technology and its ease of
connectivity with third-party systems continues to play an important role here,
and the increasing use of lower-cost online self-booking tools is one example
of how clients are gaining better value in their travel spend.



We have maintained our client retention rate of over 90%. Amongst several new
clients secured during the first half were AIG, Allianz, CGI, CSL, MMG and
Posten Norge.



The breadth of the Group's service offering has widened as it has grown in
recent years. HRG is an international corporate services company specialising
in travel, expense and data management underpinned by proprietary technology
solutions and products. We remain focused on delivering value through
excellent service that is tailored to the specific needs of each client. This
approach enforces our reputation as a leading international corporate services
company and will help sustain a business which delivers value to all
stakeholders.



Financial results

Revenue of 186.8m was up 10% as reported, or up 6% at constant exchange
rates. Underlying operating profit, which is stated before charging the
amortisation of acquired intangibles, rose by 20% (3.9m) to 23.4m, showing a
margin improvement from 11.5% to 12.5% as a result of our continued focus on
operational efficiency and cost control. Favourable movements in exchange
rates contributed 0.8m to the operating profit improvement. Underlying profit
before tax was up by 22% to 18.7m and underlying EPS increased by 24% to
4.1p.



After reflecting the amortisation of acquired intangibles, reported operating
profit was higher by 22% at 21.3m, profit before tax was up by 25% to 16.6m
and EPS rose by 29% from 2.8p to 3.6p.



We continue to demonstrate strong cash flow generation. Net debt of 68.9m was
16.9m lower than September 2010 and represented 1.2x EBITDA for the last 12
months. This improvement has been achieved at the same time as reducing our
active working capital programme by 7.2m since September 2010.



We have noted in the past that inflation and discount rates are volatile and
that the current low interest rate environment increases the accounting
valuation of pension liabilities, even in our principal UK scheme which has
been closed to new entrants for several years and has benefit caps in place.
On an accounting basis, the Group-wide pre-tax pension deficits have increased
by 30.1m since the year end to 144.8m as the impact of a further reduction in
the discount rate and weak investment performance was only partially offset by
inflation rate changes. Importantly, the actuary for the principal UK scheme
estimates that the actuarial deficit at March 2011 was 21.5m lower than the
equivalent accounting basis and, therefore, in our latest triennial valuation
we have agreed a new ten-year recovery plan with the Trustees with annual
deficit reduction payments increasing by 0.7m to 7.3m in the current
financial year and in line with RPI thereafter. This relatively small increase
in cash contributions provides greater certainty for the funding requirements
whilst allowing HRG to retain balance sheet flexibility.



Dividend

In line with our progressive dividend policy and in recognition of our
continued strong performance and improved financial position, the Board has
declared an interim dividend of 0.6p per share, up 20% on the interim payout a
year ago. This dividend will be paid on 5 January 2012 to shareholders on the
register at the close of business on 9 December 2011. We expect the full-year
dividend to be at least 1.8p per share which would represent a 20% increase
over the 1.5p per share paid last year.



Outlook

Whilst we are mindful of the prevailing economic uncertainty, the Board is
confident that HRG will continue to progress and deliver profit before tax for
the full year in line with expectations.



David Radcliffe

Chief Executive





Operational Review



Market overview

The recovery in corporate travel which began in late calendar 2009 continued
during the first six months of our financial year. As we have stated before,
HRG's fee-based business model is not as cyclical as that of suppliers such as
airlines and hotel groups.



In its latest forecast, the IMF projects that global growth will be about 4% in
2011 and 2012, down from 5% in 2010, and notes that the outlook is for
continuing, but bumpy, expansion.



According to IATA, air travel expanded more strongly than expected during the
first half of this calendar year and airlines managed to restore asset
utilisation during the second quarter. For the six months to the end of
September, IATA figures show that the overall growth rate in passenger traffic,
which includes leisure travel, was 7%. HRG's client transactions were up 7%
during the period. IATA's forward view shows a weaker picture than this.



The hotel industry has shown greater robustness during the first six months of
our financial year, according to data published by STR Global. Globally,
year-on-year growth in monthly revenue per available room averaged 9% during
the period, similar to the growth of 10% in the same period last year.
Generally, room rates in Europe have risen sharply since last year while, in
contrast, those in the Middle East and Africa have fallen.



Following growth of 8% in 2010, the Global Business Travel Association
forecasts that global spending on corporate travel will grow by 9% in calendar
2011, while the World Travel & Tourism Council forecasts a 6% increase for the
same period.



IATA currently forecasts airline industry profitability of $6.9 billion in 2011
(2010: $16 billion) reducing to $4.9 billion in 2012.



Client activity

In general, business confidence has held up well across our global and
diversified portfolio of clients. While there remains a keen focus on
optimising travel expenditure and reducing costs, a majority of our clients are
keen to use our value-adding services to manage their total travel spend and
HRG continues to play a pivotal role in helping them achieve these objectives.



Client spend rose by 13%, or 9% at constant currency, during the first six
months of the financial year, while transaction activity rose by 7%. In the
prior year, spend rose by 22% (18% at constant currency) and transactions rose
by 18%.



There is increasing evidence of clients seeking to consolidate their travel
management through fewer locations. This is often part of a general move by
companies to move to a more centralised model for all outsourced services. In
the case of travel management, this trend is increasing as companies look for
greater policy compliance, security monitoring, consistency of service and
economies of scale. We anticipated this trend and continue to develop our
multi-country service capability through fewer locations.



Risk and security advice has also become a priority for many of our clients,
especially since the earthquakes and tsunami in Asia Pacific and during the
period of ongoing civil unrest in certain countries in the Middle East and
North Africa region.



Costs associated with corporate meetings have often been overlooked and we are
now helping our clients gain better control of this expenditure.



Demand for relevant data and analysis to manage these issues has increased.
These trends represent additional revenue opportunities for HRG and enable us
to demonstrate the true breadth of the Group's service offering using HRG's
proprietary tools and solutions.



HRG's business model is centred on providing excellent bespoke travel
management solutions to each of its clients. Our value proposition, delivered
through superior client service, has once again been rewarded in terms of
client retention and new business as our client retention rate remained above
90%.



We are very focused on our clients and value all of our relationships. One of
our key assets is the diversification of our client portfolio and the fact that
no one client has a material effect on our financial performance. Inevitably,
we lose some clients each year but we continue to attract new clients and
expand our relationships with existing clients.



We were pleased to welcome several new clients during the period including AIG,
Allianz, CGI, CSL, MMG and Posten Norge. These new client wins have added to
the great diversity of HRG's client base, in terms of both sector and
geography. In addition, we secured expanded contracts with existing clients
such as BG Group, Polarcus and Sweco. Notable amongst many clients renewing
their contracts with HRG in the first half were ABB, Agilent, Bloomberg, Ergon
Energy, Liebherr, Timberland, Weatherford and Wells Fargo. Earlier this month,
we were also awarded Lot 1 of the UK Central Government business which
represents those departments with predominance in international travel. This
renewal of our existing business also brings four new Government departments.



Corporate Travel Management



Europe

Six months ended 30 September 2011 2010 Change



Revenue 125.1m 115.1m +8.7%

Operating profit 13.4m 12.1m +10.7%

Underlying operating profit (1) 15.0m 13.6m +10.3%

Underlying margin (1) 12.0% 11.8% +0.2 pp




(1) Before amortisation of acquired intangibles



Revenue was up by 3.4% at constant currency. Underlying operating profit rose
by 1.4m, including a 0.7m benefit from currency movements. Client travel
spend rose by 6% year-on-year in real terms and travel activity was up 4%.



Our business in Europe returned another good set of results with strong
performances in each of our key businesses in the UK, Germany and Switzerland.
Our continuing commitment to improve efficiency has enabled the uplift in
revenue to help improve our operating margin.



We continue to rationalise our service network in Europe to focus, where
appropriate, on fewer service points or strategic hubs, and to seek further
service and cost efficiencies without compromising the excellent service
quality that is core to our business. Our investment in online self booking
offers scope for further efficiency.



In the UK, overall client transaction activity and spending was broadly
unchanged as we focused on delivering excellent service for our clients.



Client activity and spend rose sharply in Germany during the period, driven by
existing clients and Volkswagen, a major new client that commenced trading with
us in October 2010. HRG's sports-related business performed well against a
prior year that benefitted from the success of the national team in the
football World Cup and the Bundesliga teams in the Champions league.



Our business in Switzerland returned a typically robust performance, with a
majority of existing clients increasing their activity and spend. A key
development was the initiation of service for new client Novartis in June 2010.





North America

Six months ended 30 September 2011 2010 Change



Revenue 39.0m 38.0m +2.6%

Operating profit 6.4m 5.2m +23.1%

Underlying operating profit (1) 6.8m 5.6m +21.4%

Underlying margin (1) 17.4% 14.7% +2.7 pp




(1) Before amortisation of acquired intangibles



Revenue was up by 4.7% at constant currency. Underlying operating profit rose
by 1.2m with little currency impact. Underlying operating profit margin
showed strong improvement, up from 14.7% to 17.4%, with client spend up by 8%
in real terms and activity up by 6%.



Our business in North America performed steadily during the first half, with
top-line growth resulting from increased client activity and the provision of
additional travel management products and services to existing clients.
Meetings management is one example of a specialist area that is gaining
popularity with clients in this region, particularly with those with limited
internal resource. Our online self-booking solutions, using HRG's proprietary
technology or third-party booking tools, continue to prove attractive and
account for more than half of all client air transactions.



Our loyalty business in Canada, which manages the redemption of credit card
loyalty points programmes, continued to perform well. This business is
currently being restructured to take account of a significant move into an
online environment in cooperation with another supplier. We have recently
entered the loyalty market in the USA with new client Miles and More.



The North American travel market remains very competitive and we are continuing
to look for additional productivity opportunities to mitigate pressure on
margins. Our ongoing investment in efficient systems is enabling us to handle
high volumes of lower-priced transactions while continuing to grow our
operating margin.





Asia Pacific

Six months ended 30 September 2011 2010 Change



Revenue 15.6m 10.1m +54.5%

Operating profit / (loss) 0.7m (0.1m) +0.8m

Underlying operating profit / (loss) (1) 0.7m (0.1m) +0.8m

Underlying margin (1) 4.5% (1.0%) +5.5%




(1) Before amortisation of acquired intangibles



Revenue was up by 42% at constant currency with good growth across the region
while underlying operating margin climbed 5.5% into positive territory. Client
travel spend rose by 38% year-on-year in real terms and activity was up 49%.



Growth in Australia has been fuelled in recent years by the boom in its
resources sector with strong demand coming from the emerging economies of China
and India. Our business performed well during the period as we expanded our
service to existing clients and won several new clients. As in other parts of
the world, we are seeing a desire for more detailed data and analysis and this
is offering scope for additional revenue. Self booking of travel now accounts
for more than 50% of all bookings, and we continue to refine our service
configurations to take advantage of the opportunities that this trend offers.



Singapore has shown strong recovery in corporate travel since the end of the
global recession, with clients in the financial sectors leading the way. With
Singapore a natural key hub for client travel consolidation in the region, we
opened a regional after-hours service during the period. We also expanded our
events and meetings service to cope with a rise in demand.



Our joint ventures in China and Hong Kong also performed strongly benefiting
from a background of good economic growth. As associates, their results are
not included in the table above.





Spendvision

Six months ended 30 September 2011 2010 Change



Revenue 7.1m 6.0m +18.3%

Operating profit 0.8m 0.3m +166.7%

Underlying operating profit (1) 0.9m 0.4m +125.0%

Underlying margin (1) 12.7% 6.7% +6.0 pp




(1) Before amortisation of acquired intangibles



Revenue was up 16.6% at constant currency, largely driven by increased business
with clients in the banking sector. Underlying operating profit rose by 0.5m,
aided by 0.1m impact from currency movements. The sharp rise in underlying
margin is encouraging and has come as a result of much sharper focus within the
business.



Spendvision is a leading innovator in the development and support of
transaction management solutions, including end-to-end expense management and
payables automation. The online platform makes it easy for companies to
capture, pay for, manage and understand all their corporate transactions,
giving complete control over spend and increased cost efficiency. It also
automates expense claims processing for employees. The solution is available
to corporate clients directly and through banking partners. Spendvision
handles over 100 million transactions a year and its platform is accessed by
users in nearly 130 countries and is available in 16 languages.



The uptake of the Visa IntelliLink Spend Management solution, a white-label
version of the Spendvision platform provided through an alliance with Visa, has
been a major focus during the period with 65 issuers signed up for the
product. Spendvision has provided consultative support to assist Visa with the
roll-out to issuers and their customers.



Spendvision has a strong pipeline of new business opportunities, particularly
in the banking sector through white-label offerings. As part of an end-to-end
travel management and expenses solution, we see good opportunities for
contactless payments and eMoney, together with our payables financing
functionality.






Technology

The thirst for more and more information delivered in a convenient and timely
manner shows little sign of being quenched in the area of corporate travel as
in any other part of corporate life. Both travel managers and travellers
continue to seek more relevant information delivered faster, and the phenomenal
growth of smartphone usage, particularly in the corporate environment, is
testament to this trend. Our clients' dependence on HRG's technology was
heightened during the recession as they sought to manage their expenditure, and
we have seen many of the practices adopted during that period retained as
conditions have improved. HRG's technology is flexible and independent, and
focused on the needs of our clients. It is our ability to develop and adapt
our technology to changes in client requirements that is one of the key
attractions of our technology offering.



During the first half of the year, we released upgrades to several of our
technology products. HRG OnlineTM, our in-house developed online booking tool,
was enhanced with many client-driven new features and further integration.
This integration includes access to additional content from low-cost carriers
and high-speed rail providers through the new Travelport Universal application
programming interface as a complement to its core GDS content. The latest
version of HRG i-SuiteTM, our online portal offering clients access to both HRG
and third-party products, enables users within a company to share and write
reviews on their hotel stay with this social content only available to fellow
employees.



Provision of travel information and functionality via smartphone mobile devices
continued during the period. Pilot testing of TripCase, a mobile itinerary
management application developed through our partnership with Sabre Travel
Network, was extended to include clients in Australia and Germany in addition
to those in the UK. A version for Sabre and Amadeus is being developed.



One of the important debates in the travel industry is that of 'direct
connect', whereby an airline sells its inventory directly rather than via a
global distribution system. HRG's systems capability gives us an important
role in that debate. In August, American Airlines and HRG announced an
agreement to explore a long-term arrangement for the benefit of their corporate
clients, in which HRG would receive guaranteed direct long-term access to
American Airlines's fares, schedules, and customised travel products and
services. At this point, these are exploratory discussions.



Technology is a key element of our strategy and we continue to develop products
and processes that best serve the needs of our clients and HRG itself. We
believe HRG's technology is best in class amongst the global travel management
companies.


Additional Financial Disclosures



Revenue

Reported revenue increased by 10.4% to 186.8m, comprised of an increase of
6.4% at constant exchange rates and an increase of 4.0% from favourable
currency movements.



Revenue per Employee

Reported revenue per employee increased by 5.2%, from 32.6k to 34.3k. At
constant exchange rates, the increase was 1.5%.



Operating expenses

Reported operating expenses increased by 9.1% to 165.5m.



Underlying operating expenses, which are before amortisation of acquired
intangibles and exceptional items, increased by 9.2% from 149.7m to 163.4m,
or by 5.2% at constant exchange rates. The 5.2% increase comprised of a 7.9%
increase for staff costs and a 0.2% decrease for other expenses; the increase
in staff costs reflects an increase of 5.1% in staff numbers and higher average
compensation.



Underlying operating profit

Underlying operating profit, which is before amortisation of acquired
intangibles, increased by 20% from 19.5m to 23.4m, including a benefit of
0.8m from favourable currency movements. The underlying operating profit
margin, which has not been materially affected by currency movements, increased
from 11.5% to 12.5%.



Exceptional items

There were no exceptional items reported in the current or prior period income
statements.



Net finance costs

Net finance costs increased from 4.3m to 5.1m, as a result of a refinancing
of the Group's credit facilities in November 2010. Higher lenders' margins
contributed to the increase of 1.9m in net external interest costs, partly
offset by a return to normal amortisation of bank fees following the
accelerated amortisation in the prior year ahead of the refinancing. The IAS
19 pension charge, which is based on the 31 March position, decreased by 0.7m.



Taxation

The tax charge of 5.0m for the current period represents an effective tax rate
of 30% compared to an effective tax rate of 31% last year, including a 0.1m
charge relating to the impact of a reduction in the UK corporation tax rate
from 26% to 25%. There was an additional charge of 1.3m in the Consolidated
Statement of Comprehensive Income in respect of the impact of this UK
corporation tax rate change on deferred tax assets. We anticipate an effective
tax rate for the full year of approximately 30%.



Cash flow

Free cash outflow, which is the change in net debt before acquisitions and
disposals, dividends and the impact of foreign exchange movements on net debt
balances, was 0.7m and represented an improvement of 5.4m from the prior
year.



The normal seasonal cash outflow from working capital improved by 3.3m over
the prior year. This improvement is despite 3.4m of lower cash flow in the
current year from the active working capital management programme described
below. The cash outflow related to borrowings was 3.4m (2010: 1.4m). Tax
paid in cash was 2.3m (2010: 2.3m) and capital expenditure, which is
primarily internal software development and office equipment, was 5.3m (2010:
3.9m). Cash costs for additional pension funding was 3.1m (2010: 3.0m).



In addition to free cash flow, the other major cash flow items are related to
dividends paid to shareholders during the period of 2.8m (2010: 2.4m) in
respect of the year ended March 2011 and share purchases made by the Employee
Benefits Trust of 2.4m (2010: nil).




Funding and net debt

The Group completed the refinancing of its 220m committed credit facilities in
November 2010. The principal borrowing is a 190m 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 a 30m fixed rate
loan that is repayable by 2018 and uncommitted facilities, amounting to around
23m at 30 September 2011.



The principal covenants are measured semi-annually, at the end of March and the
end of September, and require that net debt is less than 3.0 times EBITDA and
net external interest is covered at least 4.0 times by EBITDA, both on a
rolling 12-month basis. The definition of EBITDA for covenant purposes is not
materially different to the definition used in these financial statements. At
the end of September, net debt represented 1.2 times EBITDA (2010: 1.6 times)
and net external interest was covered 8.6 times by EBITDA (2010: 18.3 times).



At 30 September 2011, net debt of 68.9m was 16.9m lower than the prior year
and compares to 61.1m at 31 March 2011. This translates into gearing of 37%
(31 March 2011: 36%). Average net debt during the period, measured on a weekly
basis, was 21m lower than the first half of last year.



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
requirements by 18.6m in September 2011, compared to 25.8m in September 2010
and 31.1m in March 2011.



Pensions

The Group pension deficits under IAS19 have increased by 30.1m from 31 March
2011 to 144.8m before tax.



The UK scheme deficit increased by 30.2m to 134.3m over the same period, with
a lower discount rate adding 21.1m, a lower inflation rate reducing
liabilities by 9.7m and a reduction in assets of 11.1m. For several years,
the UK defined benefit scheme has been closed to new entrants and has capped
increases in pensionable salary. At 30 September 2011 there was a deferred tax
asset of 33.6m (31 March 2011: 27.0m) related to the UK deficit and a
liability of 0.9m (31 March 2011: 0.9m) related to the overseas schemes.



Foreign currency

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



Income Statement Balance Sheet

2011 2010 Change 2011 2010* Change

Euro 1.13 1.19 +5% 1.16 1.13 -3%

Swiss Franc 1.37 1.61 +15% 1.41 1.47 +4%

US Dollar 1.63 1.53 -7% 1.56 1.60 +3%

Canadian Dollar 1.58 1.59 +1% 1.62 1.56 -4%




* As at 31 March 2011.



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 2011 2010

m m

Revenue 186.8 169.2



EBITDA before exceptional items 28.7 24.3

Depreciation and amortisation (1) (5.3) (4.8)

Underlying operating profit 23.4 19.5

Amortisation of acquired intangibles (2.1) (2.0)

Operating profit 21.3 17.5

Share of associates and joint ventures 0.4 0.1

Net finance costs (5.1) (4.3)

Profit before tax 16.6 13.3

Taxation (5.0) (4.1)

Profit for the period 11.6 9.2



Summary balance sheet

30 September 31 March

2011 2011

m m

Goodwill and other intangible assets 247.9 249.9

Property, plant, equipment and investments 16.8 15.3

Working capital (83.6) (99.8)

Current tax liabilities (net) (6.3) (4.7)

Deferred tax assets (net) 44.7 38.9

Net debt (68.9) (61.1)

Pension liabilities (pre-tax) (144.8) (114.7)

Provisions and other items (1.9) (2.8)

Net assets 3.9 21.0



Summary cash flow statement

Six months ended 30 September 2011 2010

m m

EBITDA before exceptional items 28.7 24.3

Cash flow from exceptional items - (0.9)

Working capital movements (16.1) (19.4)

Interest paid (3.4) (1.4)

Tax paid (2.3) (2.3)

Capital expenditure (5.3) (3.9)

Pension funding in excess of EBITDA charge (3.1) (3.0)

Other movements 0.8 0.5

Free cash inflow/(outflow) (0.7) (6.1)

Acquisitions and disposals (1.4) (0.3)

Employee Benefits Trust purchases (2.4) -

Dividends paid to external shareholders (2.8) (2.4)

Currency translation (0.5) 0.5

Decrease/(increase) in net debt (7.8) (8.3)




Excluding amortisation of acquired intangibles





Hogg Robinson Group plc

Consolidated Income Statement

For the period ended 30 September 2011






Notes Half year ended 30 September




2011 2010

m m



Revenue 7 186.8 169.2

Operating expenses 8 (165.5) (151.7)





Operating profit 7 21.3 17.5



Analysed as:

Underlying operating profit 7 23.4 19.5

Amortisation of acquired intangibles (2.1) (2.0)





Operating profit 21.3 17.5





Share of results of associates and joint ventures 0.4 0.1

Finance income 10 0.1 0.1

Finance costs 10 (5.2) (4.4)





Profit before tax 16.6 13.3

Income tax expense 11 (5.0) (4.1)





Profit for the period from continuing operations 11.6 9.2





Profit attributable to:

Equity shareholders of the Company 12 10.8 8.5

Non-controlling interests 0.8 0.7





11.6 9.2








Notes Half year ended 30 September




2011 2010

pence pence

Earnings per share 12

Basic 3.6 2.8

Diluted 3.4 2.7









Hogg Robinson Group plc

Consolidated Statement of Comprehensive Income

For the period ended 30 September 2011






Notes Half year ended 30 September




2011 2010

m m



Profit for the period 11.6 9.2





Other comprehensive income



Currency translation differences 19 0.4 (1.2)

Actuarial loss on pension schemes (32.2) (30.2)

Deferred tax movement on pension liability 8.4 8.4

Deferred tax movement on pension liability

attributable to impact of UK rate change (1.3) (1.4)





Other comprehensive loss for the period, net of tax (24.7) (24.4)





Total comprehensive loss for the period (13.1) (15.2)





Total comprehensive loss attributable to:



Equity shareholders of the Company (13.8) (15.9)

Non-controlling interests 0.7 0.7





(13.1) (15.2)













Hogg Robinson Group plc

Consolidated Balance Sheet

As at 30 September 2011




Notes 30 31
September March

2011 2011

m m

Non current assets

Goodwill and other intangible assets 14 247.9 249.9

Property, plant and equipment 15 12.9 12.9

Investments accounted for using the equity method 3.9 2.4

Trade and other receivables 0.1 0.1

Deferred tax assets 46.6 40.9





311.4 306.2





Current assets

Trade and other receivables 106.3 114.7

Financial assets - derivative financial instruments 0.4 -

Current tax assets 0.7 0.7

Cash and cash equivalent assets 16 47.4 70.5





154.8 185.9





Total assets 466.2 492.1





Non current liabilities

Financial liabilities - borrowings 16 (112.7) (128.0)

Deferred tax liabilities (1.9) (2.0)

Retirement benefit obligations 17 (144.8) (114.7)

Provisions (4.0) (4.2)





(263.4) (248.9)





Current liabilities

Financial liabilities - borrowings 16 (0.7) (0.3)

Financial liabilities - derivative financial (0.1) (0.3)
instruments
Current tax liabilities (7.0) (5.4)

Trade and other payables (190.0) (214.6)

Provisions (1.1) (1.6)





(198.9) (222.2)







Total liabilities (462.3) (471.1)





Net assets 3.9 21.0





Capital and reserves

Share capital 18 3.1 3.1

Share premium 18 172.3 172.2

Other reserves 19 12.2 14.0

Retained earnings (188.0) (171.9)





Attributable to owners of Hogg Robinson Group plc (0.4) 17.4

Attributable to non-controlling interests 4.3 3.6





Total equity 3.9 21.0











Hogg Robinson Group plc

Consolidated Statement of Changes in Equity

As at 30 September 2011




Attributable to equity holders of the Company




Share Share Other Retained Non-controlling Total

capital premium reserves earnings Total interests equity

m m m m m m m



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





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

Other comprehensive income:

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

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

Deferred tax movement on
pension liability

attributable to impact of - - - (1.4) (1.4) - (1.4)
UK rate change

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





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





Transactions with owners:

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

Share-based incentives - - - 1.0 - 1.0 - 1.0
charge for period





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





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







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





Retained profit for the year - - - 19.1 19.1 0.7 19.8

Other comprehensive income:

Actuarial gain on pension - - - 8.5 8.5 - 8.5
schemes

Deferred tax movement on - - - (2.4) (2.4) - (2.4)
pension liability

Deferred tax movement on
pension liability

attributable to impact of - - - (2.1) (2.1) - (2.1)
UK rate change

Deferred tax movement on
cumulative

share-based incentives cost - - - 0.3 0.3 - 0.3

Currency translation - - (1.6) - (1.6) 0.1 (1.5)
differences





Total comprehensive income - - (1.6) 23.4 21.8 0.8 22.6





Transactions with owners:

Dividends - - - (3.9) (3.9) (0.6) (4.5)

Share-based incentives - - - 2.2 - 2.2 - 2.2
charge for year





Total transactions with owners - - 2.2 (3.9) (1.7) (0.6) (2.3)





Balance at 31 March 2011 3.1 172.2 14.0 (171.9) 17.4 3.6 21.0





Balance at 1 April 2011 3.1 172.2 14.0 (171.9) 17.4 3.6 21.0





Retained profit for the period - - - 10.8 10.8 0.8 11.6

Other comprehensive income:

Actuarial loss on pension - - - (32.2) (32.2) - (32.2)
schemes

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

Deferred tax movement on pension liability

attributable to impact of - - - (1.3) (1.3) - (1.3)
UK rate change

Transfer from exchange reserve - - (0.9) 0.9 - - -
to retained earnings

Currency translation - - 0.5 - 0.5 (0.1) 0.4
differences





Total comprehensive income - - (0.4) (13.4) (13.8) 0.7 (13.1)





Transactions with owners:

Dividends - - - (2.8) (2.8) - (2.8)

New shares issued to satisfy - 0.1 - - 0.1 - 0.1
share-based incentives

Transfer from share based incentives reserve

to retained earnings - - (2.5) 2.5 - - -

Shares purchased by Employee - - - (2.4) (2.4) - (2.4)
Benefits Trust

Share-based incentives - - - 1.2 - 1.2 - 1.2
charge for period

Share-based incentives - - - (0.1) - (0.1) - (0.1)
exercise of CSOP options





Total transactions with owners - 0.1 (1.4) (2.7) (4.0) - (4.0)





Balance at 30 September 2011 3.1 172.3 12.2 (188.0) (0.4) 4.3 3.9









Hogg Robinson Group plc

Consolidated Cash Flow Statement

For the period ended 30 September 2011




Notes Half year ended 30 September




2011 2010

m m

Cash flows from operating activities

Cash generated from operations 20 10.3 1.8

Interest paid (3.6) (1.5)

Tax paid (2.3) (2.3)





Cash flows from operating activities - net 4.4 (2.0)





Cash flows from investing activities

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

Acquisition of associates, joint ventures and other investments (1.4) -

Purchase of property, plant and equipment (2.7) (1.1)

Purchase and internal development of intangible assets (2.6) (2.8)

Interest received 0.1 0.1

Dividends received from associates and joint ventures 0.1 -





Cash flows from investing activities - net (6.5) (4.1)





Cash flows from financing activities

Repayment of borrowings (35.0) (3.3)

New borrowings 18.7 6.5

Cash effect of currency swaps (0.1) 0.6

Employee Benefits Trust (2.4) -

Dividends paid to external shareholders (2.8) (2.4)

Dividends paid to non-controlling interests - (0.3)





Cash flows from financing activities - net (21.6) 1.1





Net decrease in cash and cash equivalents (23.7) (5.0)

Cash and cash equivalents at the beginning of the period 70.4 58.2

Exchange rate effects (0.8) (1.0)





Cash and cash equivalents at the end of the period 45.9 52.2





Cash and cash equivalent assets 47.4 53.3

Overdrafts (1.5) (1.1)





45.9 52.2









Hogg Robinson Group plc

Notes to the Consolidated Half-Year Financial Information

For the period ended 30 September 2011





1 General information



Hogg Robinson Group plc is an international corporate services company and
specialises in travel, expense and data management underpinned by proprietary
technology solutions and products.



The Company 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 2011.



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 2011 were approved by the Board
of Directors on 25 May 2011 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
498 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 2011 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 2011, 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 2011, as
described in those statements.



Exceptional items are disclosed and described separately in the financial
statements where it is necessary to do so to provide further understanding of
the financial performance of the Group. They are material items of income or
expense that have been shown separately due to the significance of their nature
or amount.



Income tax expense in the half-year period is accrued using the tax rate that
would be applicable to expected total annual earnings.



The following amended standards and interpretations to existing standards are
mandatory for the first time for the financial year beginning 1 April 2011.
The adoption of these amendments and interpretations does not have a material
impact on the condensed consolidated half-yearly financial information:



IAS 24 (revised), Related Party Disclosures, effective for accounting periods
beginning on or after 1 January 2011. The revised standard clarifies and
simplifies the definition of a related party.



IFRIC 14 (amendments), Prepayments of a Minimum Funding Requirement, effective
for accounting periods beginning on or after 1 January 2011 and applies
retrospectively to the earliest comparative period presented. The amendments
correct an unintended consequence of IFRIC 14, IAS 19 - The Limit on a Defined
Benefit Asset, Minimum Funding Requirements and their Interaction. Without the
amendments, entities are not permitted to recognise as an asset some voluntary
prepayments for minimum funding contributions.



IFRIC 19, Extinguishing Financial Liabilities with Equity Instruments,
effective for accounting periods beginning on or after 1 July 2010, clarifies
the accounting by an entity when the terms of a financial liability are
renegotiated and result in the entity issuing equity instruments to a creditor
of the entity to extinguish all or part of the financial liability (debt for
equity swap).



The Group has not early adopted any standard, interpretation or amendment that
has been issued but is not yet effective.





4 Estimates



The preparation of condensed consolidated half-yearly financial information
requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from these
estimates.



In preparing this condensed consolidated half-yearly financial information, the
significant judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the same as those
that applied to the Consolidated Financial Statements for the year ended 31
March 2011, with the exception of changes in estimates that are required in
determining the provision for income tax expense.





5 Principal risks and uncertainties



The principal risks and uncertainties affecting the Group were identified as
part of the Business Review and the Financial risk management note set out on
pages 10 to 11 and 48 to 49 respectively of the Hogg Robinson Group plc Annual
Report and Financial Statements 2011, a copy of which is available on the
Group's website www.hoggrobinsongroup.com. The Board's view is that these
risks and the risk management policies in place remain substantially unchanged
for the second half of the current financial year. These risks and
uncertainties can be summarised as follows:



Operational risks

Loss of a major client

Volatility of client activity

Loss of a key supplier

Loss of key staff

Corruption or reputation risk

Technology or systems failure






Financial risks

The reported results of the Group could be adversely affected by:

Lack of access to adequate funding

Lack of cost and capital control

Increased pension funding

Foreign currency risk

Interest rate risk

Credit risk

Liquidity risk



External risks

Significant economic or other crisis

Competitive environment



There may be additional risks unknown to the Group and other risks, currently
believed to be immaterial, which could turn out to be material. These risks,
whether they materialise individually or simultaneously, could significantly
affect the Group's business and financial results.





6 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.





7 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
items of an exceptional nature. Finance income and costs and income tax
expense 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
included as part of the reconciliation to total Consolidated Balance Sheet
assets.




Corporate Travel Management




North Asia

Europe America Pacific Total Spendvision Total

m m m m m m

Half year ended 30 September 2011



Revenue from external customers 125.1 39.0 15.6 179.7 7.1 186.8







Underlying operating profit 15.0 6.8 0.7 22.5 0.9 23.4

Amortisation of acquired intangibles (1.6) (0.4) - (2.0) (0.1) (2.1)





Operating profit 13.4 6.4 0.7 20.5 0.8 21.3





Underlying margin 12.0% 17.4% 4.5% 12.5% 12.7% 12.5%







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 intangibles (1.5) (0.4) - (1.9) (0.1) (2.0)





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%








There is no material inter-segment revenue.



External revenue from clients by origin (where the Group's operations are
located) is not materially different from external revenue from clients by
geographical area (where the client is located) disclosed above.



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



Corporate Travel Management




North Asia

Europe America Pacific Total Spendvision Total

m m m m m m



Total segment assets

30 September 2011 260.3 87.7 16.4 364.4 7.1 371.5

31 March 2011 268.2 89.4 15.8 373.4 6.6 380.0








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



30 September 31 March

2011 2011

m m



Total segment assets 371.5 380.0

Cash and cash equivalent assets 47.4 70.5

Current tax assets 0.7 0.7

Deferred tax assets 46.6 40.9





466.2 492.1











8 Operating expenses



Half year ended 30 September




2011 2010

m m



Underlying operating expenses:

Staff costs (note 9) 111.0 98.8

Amortisation of intangible assets, other than acquired intangible 2.6 2.2
assets

Depreciation of property, plant and equipment 2.7 2.6

Operating lease rentals - buildings 7.3 7.3

Operating lease rentals - other assets 0.9 0.9

Currency translation differences - 0.1

Other expenses 38.9 37.8





163.4 149.7



Amortisation of acquired intangibles:

Amortisation of client relationships 2.0 1.9

Amortisation of other acquired intangible assets 0.1 0.1





2.1 2.0





Total operating expenses 165.5 151.7








9 Staff costs



Half year ended 30 September




2011 2010

m m



Salaries 93.6 82.7

Social security costs 10.5 9.4

Pension costs 5.4 5.1

Redundancy and termination costs 0.3 0.6

Share-based incentives 1.2 1.0





111.0 98.8





Pension costs comprise:

Defined benefit schemes 1.9 2.0

Defined contribution schemes 3.5 3.1





5.4 5.1






Half year ended 30 September




2011 2010

number number



Average monthly number of staff employed by the Group 5,446 5,183









10 Finance income and finance costs



Half year ended 30 September




2011 2010

m m



Finance income - bank interest 0.1 0.1





Interest on bank loans and overdrafts (3.0) (1.5)

Amortisation of issue costs on bank loans (0.4) (0.8)

Expected return on pension scheme assets less

interest cost on pension scheme liabilities (1.2) (1.9)

Other finance charges (0.4) (0.2)

Interest on derivative financial instruments (0.2) -





Finance costs (5.2) (4.4)





Net finance costs (5.1) (4.3)








11 Income tax expense



The tax charge is split as follows:



Half year ended 30 September




2011 2010

m m



United Kingdom 1.2 2.0

Overseas 3.7 1.9

Change in headline tax rate 0.1 0.2





5.0 4.1








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. An effective tax rate of approximately 30% is anticipated for the year
ended 31 March 2012 (2011: 31%).



Tax rate change



The UK government is reducing the rate of corporation tax from 26% to 25% with
effect from 1 April 2012. 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 0.1m, together with a charge to the Consolidated Statement
of Comprehensive Income of 1.3m in respect of deferred tax assets on pension
liabilities. The Group is reflecting the full impact of 1.4m in the first half
of the year.



Further proposals to reduce the UK rate by 1% per annum to 23% 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.




12 Earnings per share



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



Half year ended 30 September




2011 2010

pence pence

Earnings per share

Basic 3.6 2.8

Diluted 3.4 2.7




Half year ended 30 September




2011 2010

m m

Earnings for the purposes of earnings
per share

Profit for the period 11.6 9.2

Less: amounts attributable to (0.8) (0.7)
non-controlling interests





Total 10.8 8.5






Half year ended 30 September




2011 2010

number number

m m

Weighted average number of Ordinary shares in issue

Issued (for basic EPS) 302.0 300.7

Dilutive potential ordinary shares 14.7 11.7





For diluted EPS 316.7 312.4








Underlying earnings per share



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



Half year ended 30 September




2011 2010

pence pence

Underlying earnings per share

Basic 4.1 3.3

Diluted 3.9 3.2





Half year ended 30 September




2011 2010

m m

Earnings for the purposes of underlying earnings per share

Profit before tax from continuing operations 16.6 13.3

Add: amortisation of acquired intangibles 2.1 2.0





Underlying profit before tax 18.7 15.3

Underlying income tax expense (5.6) (4.7)





Underlying profit for the financial year 13.1 10.6

Less: amounts attributable to non-controlling interests (0.8) (0.7)





Total 12.3 9.9






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





13 Dividends



A dividend that related to the year ended 31 March 2011 amounting to 1.0p per
ordinary share (3,022,355) was paid on 1 August 2011. The dividend was paid
to shareholders who were on the register at 1 July 2011. The Employee Benefits
Trust has waived its rights to dividends in respect of 6,490,647 shares held in
the Company and subsequently repaid an amount of 0.2m in respect of previous
dividends.



The Directors have declared an interim dividend in respect of the six months
ended 30 September 2011 of 0.6p payable on 5 January 2012 to shareholders who
are on the register at 9 December 2011. This interim dividend, amounting to
1.8m has not been recognised as a liability in this half-yearly financial
report, in accordance with IAS 10, Events after the Balance Sheet Date.


14 Goodwill and other intangible assets



30 September 31 March

2011 2011

m m



Goodwill 221.1 221.0

Other intangible assets 26.8 28.9





247.9 249.9








Computer software




Externally Internally Client

Goodwill acquired generated relationships Total

m m m m m

Cost

At 1 April 2010 248.2 16.2 17.9 37.4 319.7

Additions - 0.8 4.6 - 5.4

Exchange differences (0.8) - 0.1 0.7 -





At 31 March 2011 247.4 17.0 22.6 38.1 325.1

Additions - 0.3 2.3 - 2.6

Disposals - (0.1) - - (0.1)

Exchange differences 0.1 (0.3) (0.1) 0.4 0.1





At 30 September 2011 247.5 16.9 24.8 38.5 327.7





Accumulated amortisation

At 1 April 2010 26.4 11.2 7.0 21.6 66.2

Amortisation charge for the - 1.5 3.2 3.7 8.4
year

Exchange differences - 0.1 (0.1) 0.6 0.6





At 31 March 2011 26.4 12.8 10.1 25.9 75.2

Amortisation charge for the - 0.8 1.9 2.0 4.7
period

Disposals - (0.1) - - (0.1)

Exchange differences - (0.2) - 0.2 -





At 30 September 2011 26.4 13.3 12.0 28.1 79.8





Carrying amount

At 1 April 2010 221.8 5.0 10.9 15.8 253.5





At 31 March 2011 221.0 4.2 12.5 12.2 249.9





At 30 September 2011 221.1 3.6 12.8 10.4 247.9





15 Property, plant and equipment



Plant and

Properties equipment Total

m m m

Cost

At 1 April 2010 10.5 49.8 60.3

Additions for the year 0.8 3.0 3.8

Disposals for the year (0.7) (0.8) (1.5)

Exchange differences - 0.3 0.3





At 31 March 2011 10.6 52.3 62.9

Additions for the period 0.1 2.6 2.7

Disposals for the period - (2.2) (2.2)

Exchange differences (0.1) (0.5) (0.6)





At 30 September 2011 10.6 52.2 62.8





Accumulated depreciation

At 1 April 2010 7.2 38.3 45.5

Depreciation charge for the year 0.8 4.5 5.3

Disposals for the year (0.3) (0.7) (1.0)

Exchange differences (0.1) 0.3 0.2





At 31 March 2011 7.6 42.4 50.0

Depreciation charge for the period 0.4 2.3 2.7

Disposals for the period - (2.2) (2.2)

Exchange differences (0.1) (0.5) (0.6)





At 30 September 2011 7.9 42.0 49.9





Carrying amount

At 1 April 2010 3.3 11.5 14.8





At 31 March 2011 3.0 9.9 12.9





At 30 September 2011 2.7 10.2 12.9








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




16 Financial liabilities - borrowings



30 September 31 March

2011 2011

m m

At amortised cost

Current (due within one year)

Overdrafts 1.5 0.1

Bank loans - -

Unamortised loan issue costs (0.9) -

Finance leases 0.1 0.2





0.7 0.3





Non-current (due after more than one year)

Bank loans 114.6 131.2

Unamortised loan issue costs (2.0) (3.3)

Finance leases 0.1 0.1





112.7 128.0





113.4 128.3





Net debt

Total financial liabilities - borrowings 113.4 128.3

Add back: Unamortised loan issue costs 2.9 3.3

Cash and cash equivalent assets (47.4) (70.5)





Net debt 68.9 61.1








17 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, with benefits based
on final pensionable salary. The increase in final pensionable salary since 31
March 2003 is predominantly limited to the lower of the increase in the Retail
Prices Index and 5% per annum.



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




The provision in the Consolidated Balance Sheet arising from obligations in
respect of defined benefit schemes is as follows:



30 September 31 March

2011 2011

m m

UK scheme:

Defined benefit obligations (343.4) (324.3)

Fair value of plan assets 209.1 220.2





Deficit - UK Scheme (134.3) (104.1)

Deficit - Overseas Schemes (10.5) (10.6)





(144.8) (114.7)








The following amounts have been included in the Consolidated Income Statement
in respect of the UK Scheme:



Half year ended 30 September




2011 2010

m m



Current service charge 1.1 1.3

Expected return on scheme assets (7.7) (7.1)

Charge to finance costs 8.8 8.7





Total charge to the Consolidated Income Statement 2.2 2.9








The current service charge is computed based on the actuarial assumptions in
place at the beginning of the financial year and translates to 18.4% of
pensionable salaries (2010: 20.6%).





The key assumptions used for the UK Scheme were:



30 September 31 March

2011 2011



Rate of increase in final pensionable salary 3.00% 3.40%

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

Rate of increase in pensions in payment - accrued after 1999 3.00% 3.40%

Discount rate 5.20% 5.50%

Inflation - RPI 3.00% 3.40%

Inflation - CPI 2.50% 2.90%



Expected rate of return on plan assets:

Equity instruments 8.00% 8.00%

Debt instruments 4.95% 4.50%

Property 8.00% 8.00%

Other assets 3.65% 4.90%




18 Share capital and share premium account



Share capital

30 September

2011

number

Authorised

Ordinary shares of 1p each 513,808,171





Issued, called up and fully paid

At 1 April 2011 307,781,171



Shares issued in the year 1,028,194





At 30 September 2011 308,809,365





30 September

2011

m

Issued, called up and fully paid

Ordinary shares of 1p each 3.1








The Company issued 1,028,194 shares for a total consideration of 131,403
during the period ending 30 September 2011 on the exercise of options under the
Company Share Option Plan (CSOP).



The HRG Employee Benefits Trust acquired 3,784,111 of the Company's Ordinary
shares through purchases on the London Stock Exchange in the period. The total
amount paid to acquire the shares in the period ended 30 September 2011 was
2.4m and has been deducted from retained earnings. The total number of Ordinary
shares in the Company held by the HRG Employee Benefits Trust as at 30
September 2011 was 6,490,647 (31 March 2011: 6,302,678) with a market value of
3.3m (31 March 2011: 3.7m). 3,596,142 shares have been used during the period
to satisfy vesting of certain share-based incentives.





Share premium account

m



At 1 April 2011 172.2

Shares issued in the year 0.1





At 30 September 2011 172.3







19 Other reserves



Total

Share-based Exchange other

incentives reserve reserves

m m m



Balance at 1 April 2010 3.2 10.2 13.4



Other comprehensive income:

Currency translation differences - (1.2) (1.2)

Share-based incentives - charge for period 1.0 - 1.0





Balance at 30 September 2010 4.2 9.0 13.2







Balance at 1 April 2010 3.2 10.2 13.4



Other comprehensive income:

Currency translation differences - (1.6) (1.6)



Transactions with owners:

Share-based incentives - charge for year 2.2 - 2.2





Balance at 31 March 2011 5.4 8.6 14.0







Balance at 1 April 2011 5.4 8.6 14.0



Other comprehensive income:

Transfer from exchange reserve to retained - (0.9) (0.9)
earnings

Currency translation differences - 0.5 0.5



Transactions with owners:

Transfer from share-based incentives reserve (2.5) - (2.5)

to retained earnings

Share-based incentives - charge for period 1.2 - 1.2

Share-based incentives - exercise of CSOP (0.1) - (0.1)
options





Balance at 30 September 2011 4.0 8.2 12.2





20 Cash generated from operations



Half year ended 30 September




2011 2010

m m



Profit before tax from continuing operations 16.6 13.3



Adjustments for:

Depreciation and amortisation (notes 14 and 15) 7.4 6.8

Net increase in provisions 0.2 0.7

Share of results of associates and joint ventures (0.4) (0.1)

Net finance costs (note 10) 5.1 4.3

Other timing differences 1.4 1.2





30.3 26.2



Cash expenditure charged to provisions (0.8) (2.0)

Change in trade and other receivables 6.4 6.1

Change in trade and other payables (22.5) (25.5)

Pension funding in excess of charge to operating profit (3.1) (3.0)





Cash generated from operations 10.3 1.8








21 Related party transactions



There have been no material changes in the nature of related party transactions
since 31 March 2011 as reported in note 28 of the Group's 31 March 2011 Annual
Report and Consolidated Financial Statements.





22 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 2011 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

A E Isaac(1) (2)

P Williams(1)





(1) Non-Executive Directors

(2) Senior Independent Director







By Order of the Board





Keith Burgess

Company Secretary





30 November 2011




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 2011, 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 2011 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 2011



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