All Leisure Group is being tipped for recovery by a leading City firm of leisure analysts.

Panmure Gordon, issuing a ‘buy’ notice for group’s shares, described half-year results issued earlier this week as “encouraging” with the narrowing of cruise losses by £3.5 million to a half year loss of £7.6 million while the tour operating business continued to trade well.

The firm said All Leisure was now “ripe for recovery” following a series of unprecedented trading disruptions due to one-off events including the Costa Concordia disaster, itinerary disruption and the impact of Egyptian civil unrest impact on the Discover Egypt brand.

“These factors have been unfortunate and completely out of management’s control and given the operationally geared nature of the industry has resulted in a significant deterioration in operating profits,” said Panmure Gordon.

“A full recovery in All Leisure cruise profitability to normalised range could potentially yield a c£11 million swing in operating profit.”

It described All Leisure as a business in a state of transition following the acquisition of over-55s specialist Page & Moy in May 2012

“The focus on niche holidays we believe significantly reduces operating risk, with higher barriers to entry and higher levels of repeat business,” the Panmure Gordon note said.

“We believe the Page & Moy acquisition comes at the right time, with the UK tour operating sector, after several years of significant capacity cuts, now finally seeing a stable balance of supply and demand in our view, with the number of UK holidays overseas stabilising after year-on-year reductions due to supply cuts (with a corresponding increase in price).”

It sees the Page & Moy business alone as being “arguably worth significantly more” than the £19 million market capitalisation of the overall business.