Corporate travel specialist Hogg Robinson yesterday admitted cautious spending among its clients triggered a slide in sales and profits.
The Basingstoke-based firm, which provides travel services to businesses worldwide, said client spend fell 8 per cent in the six months to September 30 as customers opted for cheaper travel and accommodation and tightened travel policies.
Shares fell 5 per cent as Hogg, whose customers include the UK Ministry of Defence and Foreign Office, revealed a 7 per cent slide in bottom-line pre-tax profits to £15.3m.
Hogg chief executive David Radcliffe said companies were “understandably cautious in their approach to travel” but the group had managed to hold on to customers.
Hogg, which also counts Unilever, Volkswagen and Rolls-Royce among its customers, reported a 10 per cent slide in interim revenues to £168.9m.
It said half-year revenues in Europe dropped 9 per cent to £113.9m, while US sales plunged 20 per cent to £31.4m and Asia-Pacific fell 5 per cent to £14.8m.
The company said current trading was still under pressure, with revenue down 4 per cent in October.
Hogg said clients were turning to the company’s online self-booking tools as they look to make savings.
The group has taken action to cut costs in response to falling client spend, but said it had managed to uphold its customer retention rate and take on new business.
New clients signed up in the first half included Cricket Australia, the governing body of professional cricket in Australia, tyre firm Pirelli and Unilever.
It also expanded contracts with existing clients such as Ernst & Young and the UK Government while banks BNP Paribas, Deutsche Bank and Lloyds Banking Group renewed terms.
Andrew Fitchie, analyst at brokers Investec Securities, placed the group’s full-year forecasts under review to reflect the “uncertainty over the trading outlook”.
Meanwhile, Hogg and Citi Commercial Cards have entered into a preferred relationship to deliver enhanced travel programme solutions to the market. They will work closely to deliver a number of travel industry innovations that will combine Citi Commercial Card business’s leading solutions with HRG’s expert travel, meetings, expense, data and advisory management services.
This relationship provides the opportunity to further enhance the central travel account proposition.