HOGG ROBINSON | Interim Management Statement | RNS
15 February 2012
Hogg Robinson Group plc
(`HRG', `the Company' or `the Group')
INTERIM MANAGEMENT STATEMENT
Hogg Robinson Group plc, the international corporate services company, today
issues its Interim Management Statement for the year ending 31 March 2012,
covering the period from 1 October 2011 to date.
Since the announcement of the half-year results on 30 November 2011, the Group
has continued to trade in line with management expectations. For the four
completed months to the end of January, travel bookings, client spend and our
own revenue were essentially the same as last year with particularly good
progress in Asia Pacific and Spendvision offset by a modest decline in Europe.
We continue to maintain tight control of our cost base while delivering real
value and excellent service that is tailored to the specific needs of each
The Board continues to believe that the long-term prospects for HRG remain
attractive, with good growth opportunities in its key markets. Despite the
uncertain macroeconomic environment, the Board remains confident that HRG will
deliver underlying profit before tax(1) for the full year in line with
David Radcliffe, Chief Executive of Hogg Robinson Group plc, commented:
"We are confident that our compelling customer proposition, strong foundations
and proven ability to tightly manage costs will see HRG deliver a full year in
line with expectations. HRG has demonstrated the robustness of its business
model which is underpinned by our ability to help clients maximise the value of
their corporate travel budgets. HRG has good long-term prospects and our focus
remains on the core drivers which have made us successful - a proven track
record of winning business and delivering an excellent, technology-led bespoke
service to help our clients reduce costs."
1. Before amortisation of acquired intangibles and exceptional items
As stated previously, our business does not correlate directly with any single
set of data. However, whilst we are mindful of the impact of the continuing
uncertainty in macroeconomic conditions, we have been encouraged by the latest
airline and hotel data.
International Air Transport Association (IATA) statistics for international
passenger traffic, which includes both business and leisure travel, shows
year-on-year growth in Revenue Passenger Kilometres (RPK) for each of the final
three months of 2011 which averaged approximately 4% over the period.
STR Global data shows continued year-on-year growth in monthly revenue per
available room (RevPAR), with average growth for the final three months of 2011
of about 4%.
Clients remain cost conscious and focussed on value for money. They are
increasingly receptive to our drive for consolidation of service centres and
this has started to gather momentum in Asia and Latin America. Tighter control
of compliance with mandated travel policies and improved security monitoring
also remain important priorities for clients.
We are also seeing opportunities to provide more consulting and other
value-added services for our clients. In particular, there is greater interest
in end-to-end solutions, including payment and management control processes,
and the management of corporate meetings and conferences. With the relentless
advances in technology comes an ever-growing number of options facing the
travel booker and clients are placing increasing reliance on the expertise and
experience offered by HRG.
We have added several new clients to our portfolio including DHL. Amongst those
that we have expanded our relationship with (through the provision of
additional services and products and/or via new geographies) are ABB,
Christies, DOF, Ericsson, Novartis, Volkswagen and the UK Central Government.
Noteworthy contract renewals/extensions include BG Group, BMW, Bridgestone,
Cond Nast, DIRECTV, Next, Smiths Group, Takeda, TeliaSonera, the UK
Government's Ministry of Defence and Foreign & Commonwealth Office, and the US
Embassy. HRG's recent success in securing additional business with the UK
Central Government is particularly pleasing with the prospect of extending its
existing travel management service to other departments over the coming months.
Inevitably, we did lose some clients during the period but we continue to
attract new clients and expand our relationships with existing clients. Client
tenders are continuing at a high level and our new business pipeline remains
UK pension scheme
We continue to look for ways to reduce the volatility of our pension
obligations. Following the completion of the recent funding agreement with the
UK trustees in November 2011, we have invited deferred members to transfer
their benefits out of the UK scheme in exchange for a higher capital sum, or an
alternative form of benefit, than would otherwise be available to them. In
total, these deferred members represented over 40% of the accounting
liabilities at 30 September 2011.
This offer, which expires on 31 March 2012, will be measured for accounting
purposes using bond yields at the time of acceptance by the member. We expect
to report any accounting gain or loss, including the costs of execution, as an
exceptional item in our full-year results.
Importantly, this offer will be fully funded without any increase in the
schedule of cash contributions that was agreed in November 2011.
The Group's cash generation and balance sheet remain robust. Since 30 September
2011, average weekly net debt has been approximately 17m lower than the same
period last year and there have been no material events or transactions that
have impacted the Group's financial position, save for the information provided
in this statement.
- 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
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.
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