The impact of the Costa Concordia disaster and the cancellation of a ship charter sent 2012 profits tumbling at All Lesiure Group.
Pre-tax profits came in at £800,000 for the year to October against £5.7 million for the previous 12 months.
The acquisition of Page & Moy Travel Group for £4.2 million saw revenues rise by more than 58% to £127.4 million.
Chairman Roger Allard said: The tragic events that occurred in Giglio, Italy in January 2012 allied to the eurozone crisis and geo-political events throughout the world have all provided a challenging backdrop to the year.
“2011/12 was a year that also saw trading adversely affected by persistent low interest rates, a weak pound, high oil prices and reduced discretionary customer spending. In spite of this, I am pleased to announce that the group has delivered a modest profit for the year.”
He added: “The outlook for the industry in general over the next 12 months remains challenging and we are actively managing the impact on trading by reducing committed capacity in the cruising division.”
All Leisure is continuing to focus on the closer integration of its tour operating and cruise businesses and has already implemented a number of group-wide cost and operational efficiencies.
Integration plans are well advanced and synergy benefits of more than £1 million for 2012/13 have already been identified followed by savings of £1.5 million in 2013/14, Allard added.
He said that the acquisition of Page & Moy enabled the group to provide an increasing choice of niche holidays to the over-55s market, while at the same time reducing the proportionate level of committed risk.
"This year we have added strength and depth to our management team and with this high level of experience we are clearly focused on the priorities of addressing the challenges presented to our industry by the current economic climate and geo-political events,” Allard said.
“Furthermore the acquisition of Page & Moy has given us the opportunity to offer a range of escorted tours that complement our existing cruise products to a combined active database of c881,000 households of similar demographic.
“It is our intention to ensure that the Group is optimally structured to derive maximum benefit from our scale, to create a stronger business centred on our core operations with a view to delivering sustainable growth for the longer term."
He confirmed that operations director Tracey McKinnon, sales director Colin Wilson and marketing director Andrew Dufty have all been appointed to the All Leisure board while Geoff Lawrence, Colin Stone, Mike Deegan, Gill Harvey and Sally Carrol have all left.
A number of underperforming products and business lines have been discontinued for 2013 including ex-UK coaching holidays and part of the Christmas programme. The Page & Moy brand is being phased out with the profitable components being incorporated into Travelsphere's portfolio of tours.
The re-launch of Travelsphere as a value for money, yet quality product was described by chief executive Ian Smith as being “very successful”.
He added that going forward, “the flexible business model of our tour operating division allows us to align our capacity to fluctuating demand. Across the cruising division we have also taken the strategic decision to reduce our committed capacity”.
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