Following Hogg Robinson Group’s (HRG) announcement that expected earnings for the year ending 31 March 2008 would be down 10% to £45m ($90m), shares in the travel management company (TMC) tumbled.

Having started the week at 58.75p, shares fell 17.25p – nearly 30% - to 41.5p. Today (20 March) they were trading at 41p, down 0.5p. A year ago they were at 98p.

Weak demand in unmanaged small and medium sized business and events is a key problem, while there have been ‘delays’ to new clients signing contracts for the company’s Spendvision expense management operation and - for those that have signed  - implementation of contracts has taken longer than expected.

“This trading setback is disappointing,” said HRG CEO David Radcliffe, “but we are taking, and will continue to take, decisive action to mitigate the effects of the economic downturn and to ensure that the Group is positioned well for next year.”

A spokesman told ABTN: “In regards to Spendvision, that’s coming from nothing to become a big part of the business in a short time – so while it wasn’t great this year, the company has a lot of confidence in the strength of that business stream.”

The TMC is restructuring its European business at a cost of £2m, but this is expected to save £5m, and a further £1m of restructuring will now take place in other parts of the company.

Core clients continued to trade in line with expectations however, and following a favourable arbitration decision against Kuoni – following a breach of agreement – HRG is expecting ‘some additional financial benefit in the coming months.’ A figure has not been given, but it is thought to be a multi-million pound settlement.