Western & Oriental cuts losses despite ‘difficult’ year
Wednesday, 03 Dec, 2009
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Specialist luxury travel group Western & Oriental managed to cut full year losses by 80% during a period of “difficult” trading conditions.
The group’s overall pre tax loss for the year to September 30 was cut to £800,000 against £4.1 million the previous 12 months. Overall revenue was down by eight per cent to £57.6 million from £62.7 million.
W&O said trading conditions remained difficult throughout the year, characterised by global recession, poor consumer confidence, weak sterling and health scares caused by swine flu.
These factors resulted in a significant fall in consumer confidence and reduced advanced booking patterns.
Despite the tough trading environment, “significant improvement” was achieved year-on-year driven by “early and decisive action” taken to reduce costs and integrate products through brand rationalisation and internal efficiency.
Chairman David Howell said: “The group’s decisions to significantly reduce the cost base at the end of the 2008 financial year and integrate the product offerings, coupled with a degree of consumer confidence post August 2009, allows the board to view 2010 with some increased optimism.”
The outlook for 2010 shows some signs of an improving economy and “much improved” consumer confidence, he added.
“Based on these improvements the board has decided to invest in organic growth in the travel sector by spending more on marketing and recruiting highly qualified people to help grow the brand,” said Howell.
“Current trading is in line with the improving market conditions. We therefore view the outlook for 2011 and beyond with improved confidence.”
The group made “considerable progress” during the past year towards a “one brand” strategy, with a new generation of tour operating brochures now all under the W&O Travel brand.
A number of acquired businesses have been consolidated into a single brochure.
Tropical Locations, for example, now includes India, the Caribbean and Arabia, as well as its traditional outbound destinations in Asia and the Indian Ocean.
In the conference and incentive businesses W&O has also consolidated to a single brand, W&O Events, operated under one management team to improve the overall management and effectiveness of the division.
“It is anticipated that in addition to synergies, the above actions will provide a much improved platform for organic growth as we move into the 2010 financial year,” said Howell.
“During September and October 2009 consumer confidence appears to be improving and we are starting to see bookings return to more historic levels.”
by Phil Davies
Phil Davies
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