Travelmole Q&A with HRG chief executive David Radcliffe

Hogg Robinson Group (HRG) announced plans this week for a flotation on the London Stock Exchange.

The travel management company went private in 2000 after a £400m management buyout backed by Permira, but now intends to raise £190m through the issue of new shares later this month.

It will use the proceeds to pay off part of its current debt, make a one-off payment of £28.5 million to the UK Pensions Regulator, and use the rest to finance its global expansion.

HRG chief executive David Radcliffe spoke to Travelmole.

Q. With the recent terror alert in the UK and volatile situation worldwide, is this the right time for a travel management company to be planning an IPO?

A. With reference to the recent Heathrow security events, none of us want them or like them, but the unhappy fact is they are a part of today’s world. They have caused disruption but they haven’t actually stopped anything. If anything, they have showed how we can add greater value, providing companies with data and giving them alternatives. That’s part of what we do. It hasn’t affected us financially.

Q. What does an IPO this mean for HRG?

A. The IPO gives us more fire power than before. Sure, we’re bridging the gap with our current debt and we’re making the one-off pensions payment, but we will also be able to accelerate the rate of acquisitions we’ve been making as a private company.

Q. What effect will it have on the travel management industry as a whole?

A. I guess you could argue that it’s a positive move as it reinforces the move towards a being a professional services industry. With the withdrawal of commissions, we are now far more linked to long-term contracts. We have to operate very differently. There are now two types of TMC – those that concentrate on low-cost transactions and offers basically a fulfilment service, with a lower skills base, stack it high sell it cheap. The others, like us, are investing in new technology, new services and buying consultancies and are moving far more into professional services.

Q. What else can you say about your expansion plans?

A. We’re already talking to a number of companies in the US, Europe and Far East and they’re not all TMCS. We’re growing all the time overseas and now only 31% of our revenues are driven out of the UK.
We operate in 96 countries across the globe with owned or controlled operations in 24 countries.

Q. Are there opportunities for your UK-based staff to work overseas?

A. Yes, we have a number of people who have taken on skilled jobs overseas. We actually run a programme called Interchange where every year we create 24 jobs and invite people to apply from our offices all over the world. Each job is for a month, and we put them up for a month in that area. So, you could get somebody from London working in New York or someone in Norway working in Hong Kong. The only thing that we ask is that they write a report on the intranet. It’s really ace and gives them a real flavour of working overseas. There is a great enthusiasm to work somewhere else and the last time we had nearly 500 people applying.

By Bev Fearis