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Weak pound sees profits fall at Worldspan in 'satisfactory' year

The weakness of the pound and the cost of setting up a London office saw profits at Worldspan more than halve

Pictured: Worldspan chairman Jason Wilcock

The weakness of the pound and the cost of setting up a London office saw pre-tax profits at Worldspan more than halve last year.

Pre-tax profit fell to £174k in 2017 from £405k the previous year, according to accounts filed at Companies House. Turnover at the North Wales-based company dipped from £7.9 million in 2016 to £6.1m for the year ended 30 June 2017.

However, chairman Jason Wilcock, said that increased levels of activity mean that the firm expects to see a strong result for the 2017-18 financial year.

He said: “Once again, our exceptional team delivered excellence for our clients across a wide range of event, creative and digital projects. Within our last financial year, we did experience some reduction in event activity, primarily due to the weakness of sterling, and this, together with the increased costs associated with setting-up our London office, has reduced profit. However, as we track the six-month mark of our current financial year, we are seeing increased levels of activity and expect to report a strong performance at our year-end (30 June 2018).”

Gross margin increased from 26.4 per cent to 32 per cent as the mix of business changed throughout the year, but gross profit fell from £2.1m to £2m in the same period.

The strategic report filed with the accounts said: "The company performed satisfactorily against a background of uncertainty within the general economy and the significant weakening of sterling against the Euro and US dollar caused by the vote to leave the European Union. Certain clients experienced a substantial reduction in their profitability resulting from higher import prices, and this forced them to reduce the number and scope of previously planned projects which has caused the turnover and overall profit to fall from 2016

“Whilst our gross margin percentage increased, turnover and gross profit both fell as a result of the above external considerations and the cyclical nature of certain other projects. Whilst there was a reduction in event activity from certain clients, the company won new accounts within the international association, automotive and financial services sectors.

“As part of our medium and long-term strategy, we continued to make investments in the year and expenses increased as a result of investment in staff and the full year impact of having a London base. The decision to open an office in London is a key part of the plan to develop the company over the coming years and good progress has been made in raising the company’s profile.”

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