The boss of Travelzest has voiced cautious optimism despite reporting a 32% slump in underlying operating profit to £4.2 million in 2011.
Gross profit was down by 2% to £23.7 million although transaction value growth grew by a record 13% to £246.6 million, driven by agency growth in Canada where it has been focussing operations.
Revenue dropped by 14% to £37.7 million due to a 49% decline in UK merchant revenue partially offset by a 16% increase in agency revenue.
Travelzest announced an extension of its banking facility with Barclays to June 30, 2013 as it reported net debt declining marginally from £11.7 million to £11.2 million.
The group is in the process of selling UK brands and recently completed the sale of JMB Travel Consultants and assets related to Travelzest Holidays.
“We continue to explore options for the remaining brands,” the company said.
“The Canadian operations produced another successful year with revenue up 16% and now represent some 67% of group revenues.”
Chief executive Jonathan Carroll said: “We have had to make some difficult decisions in the period and have focused on those brands that we believe will drive both growth for the business and shareholder value in the longer term.
“The simplification of our business, post-rationalisation, will allow us to better focus on what makes us successful and we are already starting to see the operational and financial benefits of a more streamlined UK business.”
He added: “We are cautiously optimistic about our opportunities for growth, particularly at our flagship brand itravel2000.”
Non executive chairman Nigel Jenkins added: “The work that has been done over the year, although difficult, has positioned the business to better weather the continued economic headwinds in the UK and will set us on a path for improved profitability.
“We believe that the business has the right foundations to grow and the initial key indicators are positive in 2012.”
Jenkins added: “The UK economic climate is likely to remain weak during 2012 however current booking activity is ahead of the expectations we formed in late 2011.
“The Canadian economy has recently suffered from some weakening consumer confidence and in addition an unseasonably warm winter softened travel demand during the first half of our winter season.
“Bookings have however increased significantly in recent weeks and we are positive for the remainder of the year.
“Demand continues to grow for our luxury cruise offerings through The Cruise Professionals. As ever, the late booking market is important and we continue to focus marketing effort on this area.
“A streamlined product offering and more cost efficient base for servicing our customers will set us on a path for improved profitability.”