CNG Travel cuts pre-tax loss to $1.5m

Publicly-quoted online hotel reservations company CNG Travel Group had a pre-tax loss of $1.5 million (€1.23 million) in 2003, according to results published yesterday.

The Kenmare, Co Kerry-based company had sales of $28.2 million during the year, compared with $5.3 million in 2002. Its 2003 turnover included a $17.2 million contribution from its US acquisition, Tzell.

Losses before tax were reduced to $1.5 million in 2003 from $12 million the previous year. This was largely attributable to a $9 million cut in the level of write-offs against investments.

Total losses for the financial year were $2.57 million. This and a loss of $1.67 million in its foreign currency reserves left its profit and loss account $18.8 million in the red at the end of 2003, compared with $14.6 million a year earlier. The foreign currency loss was non-cash.

The company's balance sheet improved during the year. Current assets increased from $1.6 million to $10.4 million. This included an increase in cash at the beginning of the year to $3.4 million from $663,000. CNG reduced its shareholders' deficit to $4 million from $6.9 million.

CNG generated net cash of $187,761 from its operations. It had a net cash outflow of $9.9 million. Financing of $12 million ensured that it had an overall increase in cash for the year of just over $2 million. The company's net debt increased by over $10 million to $17 million in 2003.

The company also said yesterday that it had entered into a strategic partnership with Sojitz, a Japan-based company that sells flights and hotel reservations to travel agents. It will distribute CNG's hotel reservations software to agents in Japan.

CNG provides an online hotel-booking service for corporate travellers. The company says that four of the world's five largest travel agents use its software, Travel Lodging Connector (TLC).

It raised £22.1 million sterling (€33.2 million) through a flotation on London's Alternative Investment Market at the end of the first week in May. Its shares floated at £1.05, but have since fallen by more than 20 per cent.

Yesterday's news sparked some activity in the stock, which hit a high of 82 pence before slipping back to close at 80 pence, 0.5 pence ahead of its opening quote.

The Menolly Group, parent of Menolly Homes, holds a 29.9 per cent stake in CNG. Mr Séamus Ross jnr, son of Menolly Group founder Mr Séamus Ross, is a director of CNG.

The company's chief executive, Mr Finbarr Power, holds 12.09 per cent. Dr Michael Smurfit joined the board several weeks before CNG's flotation. The company began life in 1999 as CNG Hotels Ltd, and initially focused on leisure business before switching to the corporate market.