Hogg Robinson (HRG) 70p

Gain to date: 14.3%

Original entry price: Buy at 61.25p, 8 Oct 2015

Corporate travel management specialist Hogg Robinson (HGG) delivered another solid earnings and cash performance in full year results announced on 24 May.

Earnings per share on an underlying basis gained 9% to 7.2p and free cash flow was also strong at 8.8p a share as a result of one-off cash inflows in the year.

High cash conversion means the business is now below its target range of net debt to profitability, says chief financial officer Michele Maher. As a result, Hogg is looking at a range of options including increased shareholder returns, acquisitions or more direct business investment.

Sales, down 2% on an underlying basis, were a little disappointing.

Hogg is transitioning from consultant-heavy travel management services to a more online-focused offer.

Delivering this model generates lower headline sales but chunkier margins, meaning soft revenue numbers are not necessarily a cause for concern.

But performance deteriorated a little in the second half of Hogg’s financial year, according to our calculations and there is a danger that carries through into the next financial year, in our view.

‘Obviously it’s a little early in the year to make predictions,’ said chief executive David Radcliffe. ‘We expect markets to remain roughly the same, which is for the US and the UK to be positive, Europe to be a mixed bag and not a lot of excitement in the Asia-Pacific region.

‘If you put all of that together then you have our statement that we are confident and our focus will be on delivering earnings growth in the year ahead.’

Decent numbers in a difficult market. (WC)