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Cost cutting helps HRG protect profit despite falling revenues

Hogg Robinson Group, parent company of HRG, reports pre-tax profit of £26.7 million
24/05/2016

Pictured: Hogg Robinson Group CEO David Radcliffe

Hogg Robinson Group, parent company of travel management and meetings provider HRG, has reported a pre-tax profit of £26.7 million.

The 15 per cent increase in profitability has been attributed to growth from the company’s travel management tech platform Fraedom, despite a dip in annual revenue, which was down 4 per cent to £318m for the year-ended 31 March 2016. Booking activity in the UK increased by 2 per cent, while spend was down by 3 per cent – which was blamed for a 5 per cent decline in revenues alongside an increased trend towards online bookings. Continued cost-cutting measures included an ongoing move towards home working and hub staff locations. 

In its annual statement, the company said it anticipated a further squeeze on revenues for HRG, even though operating profit had increased by 3 per cent. 

CEO David Radcliffe said: "Hogg Robinson Group made good progress during the year. Our travel management business, HRG, which helps clients optimise their travel spend, continues to leverage its technology and service delivery platform to offer clients a better travel experience whilst also maintaining our profitability. At the same time Fraedom, our exciting technology business, is growing strongly and capturing the demand for disruptive technology.

“These are exciting times for our company, albeit as previously predicted, we continued to experience downward pressure on our revenue as aggressive competitive pricing continued alongside the ongoing move by our clients to online booking.  

“Work on restructuring the group's operations continued during the year as we sought to 'get ahead of the curve' through greater efficiency and lower operating costs. Over the past several years, we have steadily consolidated the group's network and moved to a structure whereby clients are increasingly serviced by HRG staff located in hub locations or by those working from home. 

"These changes, together with many other initiatives including optimising call centre and online services, are all designed to improve the group's competitiveness as we shape our business to match the evolving needs of our clients and the rapidly changing dynamics of our industry.”


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