UK arm suffers as Kuoni delivers ‘encouraging’ 2008 results
Kuoni saw pre-tax profits rise by 8.6% last year as the grouo undertook a group-wide revamp.
The Swiss-based operator described the results as “encouraging”.
Turnover was up by 3.3% to CHF 4,855 million, while earnings before interest and taxes (EBIT) rose by 8.6% to CHF 151.5 million.
But the UK arm of Kuoni saw a 28% drop in profit to CHF 31.5 million, with turnover down by more than 14%.
The company said the weakening of the pound, which saw its value against the Swiss franc drop by 17%, and the continuing economic crisis “weighed heavily on results”.
“The UK is the first Kuoni country suffering particularly deep recession, which is severely dampening consumer mood,” the company said.
“On a brighter note, costs were substantially reduced to stem margin decline. The first restructuring programmes were implemented.”
Looking forward, group CEO Peter Rothwell said: “Booking figures for 2009 suggest a reluctance among customers to make longer-term travel plans.
“They tend to book their holidays later and also make more last-minute holiday decisions.”
Bookings levels for the group’s tour operations up to March 15 were 24% down on the same period last year.
Chief financial officer Max Katz added: “the continuing global economic crisis will slow bookings in 2009.
“Late sales will not fully compensate the booking declines to date. But our business model of low vertical integration leaves us optimally placed to face a challenging year.”
The company’s strategic business units in Scandinavia, Asia, destination management and Switzerland made “particularly sizeable” contributions to the overall pre-tax result for 2008, the company said.
The net result for the year rose 12.1% to a record CHF 152.1 million.
Kuoni made seven acquisitions during the year, mainly in the premium and specialist and destination management segments, that will add CHF 308 million to annual turnover.
“The realignment that Kuoni has embarked upon to make itself a global travel brand is one of the most extensive transformations the company has ever undertaken,” a statement said.
“2008 saw the creation of new product lines and service offers, as well as new corporate values and a revised corporate identity.”
Phil Davies
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