CNG racks up €9m losses

29 Sep 2004

Online travel and technology business CNG Travel Group has announced pre-tax losses of €8.9m for the six months ended 30 June 2004.

The firm, which raised US$38.8m following an AIM flotation in May, attributed the loss mainly to higher investment in technology, expenses associated with the flotation and a one-off non-cash financing charge.

Turnover for the period was US$26.87m, compared with US$5.8m for the same period in 2003, which was before acquisition of New York-based Tzell Travel. The latter’s revenues jumped 23pc to US$20.8m, yielding a pre-tax profit of US$4.6m.

Group pro-forma operating profit was US$2.08m and earnings per share 12.34 cents.

CNG signed a deal with Sojitz Corporation expanding CNG’s business into the lucrative Japanese corporate travel market. It also continued its rollout of TLC booking engine, reaching 600 agents by 30 June and a projected 2,000 agents by the end of September. Gross bookings using TLC increased from US$600k per month in May to over US$7m in September.

Commenting on the results, Finbarr Power, CEO, said: “CNG has made considerable progress during 2004. Beyond listing on AIM in May this year, the rollout of TLC has progressed in line with our expectations. Tzell continues to maintain its growth and a joint venture has been successfully established in Japan. Since the period in question we have acquired, which has provided CNG with a strong retail orientated product which will complement our corporate business, as well as increase our penetration into new growth markets through greater distribution and product offering.”

He added: “We remain on target to becoming the de-facto method for booking hotels by corporate travel agents. This is being made possible by virtue of our extensive stock of hotels and our distribution agreements with the top travel distributors in the US, all brought together by a technological platform that is unique and already has been widely accepted as groundbreaking.”

The company also announced that it would be launching TLC Prompt Pay – the latest version of its booking engine – at the World Travel Market Trade Show in London on 8 November. Prompt Pay automates the financial processing of reservations between travel agents and hotels. The Company said it was in negotiations with several major chains to deploy the technology and expected to announce partners shortly.

By Brian Skelly