Travel specialist Hogg Robinson (HRG) has been struggling against fears that the vote to leave the European Union would hurt HRG travel management, which accounts for 90 per cent of turnover. Revenues for the division fell by 5.4 per cent in constant currencies in the year to March 2017, although the operating margin expanded 30 basis points to 13.6 per cent. Transaction activity declined 7 per cent year on year, while client travel spend dropped 10 per cent in constant currencies.
Expense and payment management division Fraedom performed better, increasing constant currency revenues and operating profit by 13 per cent and 22 per cent, respectively. Alongside its results, the group also announced the acquisition of travel management company eWings, which already has the omni-channel capability it has been developing and offers "technology opportunities and new client advantages".
The group is now two years into its three-year restructuring programme. During this time it claims to have stripped out £17m of a targeted £20m in annualised savings so far and reduced net debt by more than 75 per cent since 2013 - it's down 38 per cent to £21m this year alone.
Analysts at Investec are forecasting adjusted profit before tax of £33.3m and adjusted EPS of 7p in 2018 (from £37m and 7.6p in 2017).
HOGG ROBINSON (HRG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 70p | MARKET VALUE: | £228m | |
| TOUCH: | 69-70p | 12-MONTH HIGH: | 82p | LOW: 60p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 10 | |
| NET ASSET VALUE: | * | NET DEBT: | £21m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 343 | 30.9 | 6.9 | 2.10 |
| 2014 | 341 | 25.3 | 5.3 | 2.21 |
| 2015 | 330 | 23.2 | 4.6 | 2.32 |
| 2016 | 318 | 26.7 | 5.8 | 2.51 |
| 2017 | 335 | 33.1 | 6.9 | 2.64 |
| % change | +5 | +24 | +19 | +5 |
Ex-div: 29 Jun Payment: 1 Aug *Negative shareholder funds | ||||
