Niche cruise operator All Leisure Group returned to the black last year but remains cautious about the overall economic outlook.
The company turned a pre-tax loss of £2.1 million into a profit of £5.7 million in the year to October 2011.
Operating profits rose by £300,000 to £3.4 million as the core brands of Voyages of Discovery, Swan Hellenic and Hebridean Island Cruises saw a 7.1% increase in passenger nights.
Operator Discover Egypt remained profitable despite the effects of 'Arab Spring' uprising.
Revenues declined by 2.8% to £80.36 million as a result of issues involving the charter of the ship Alexander von Humboldt coupled with the Arab Spring impact on Discover Egypt.
Summer 2012 ocean cruise sales are down 7% on this time last year based on a 15% rise in capacity. But the selling price is up for Voyages of Discovery and Swan Hellenic by 4% and 11% respectively.
Chairman Roger Allard noted a growing trend towards late bookings for 2012 and said: “We are currently encountering many challenges as a result of geo-political events, difficult market conditions, inflation and the situation in the eurozone, together with the tragic events seen recently in Giglio, Italy.
“Nevertheless, the fact that we have reported a reasonable performance against a backdrop of unprecedented natural disasters and geo-political events pays testament to the strength of our brands and the dedication of our loyal staff.
“While we remain cautious on the overall economic outlook, we have taken some prudent action to ensure that we are best placed to continue to provide the best service possible to our customers and value to shareholders alike.”
He revealed that the group has “regrettably” had to bear a significant one-off cost arising from the bareboat charter of the ship Alexander von Humboldt to a third party operator.
“We have taken the prudent decision to provide for costs arising from a contractual arrangement of £0.75m,” said Allard.
The liability arose due to the charterer not paying for services ordered and delivered to the ship. As a result the suppliers are now seeking recompense from All Leisure.
“Having sought legal opinion, management remain of the view that these claims are unjustified, particularly when the charterer is still trading. However, it is probable that funds will need to be paid to the courts or, alternatively, directly to the suppliers, to withdraw these claims,” Allard said.
He continued: “In addition to these costs the group did not achieve the expected revenue from this charter.
“While it is very disappointing to incur such costs, they are indicative of the incredibly difficult current economic and geo-political environment all companies within the travel industry have to endure.”
Alexander Von Humboldt is to be renamed mv Voyager come under the Voyages of Discovery brand from next winter.
Allard added: “We have taken the strategic decision to manage our capacity and plan significant dry docks, refits, maintenance and upgrades during 2012.
“In addition, we will continue to develop new routes to market, for example via GDS and online to broaden customers' options and product offerings.”
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