Bottom Line: Sense of timing

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HOGG Robinson, which sold its travel agents to Airtours last year, showed a fine sense of timing when it pulled out of estate agencies in 1989. Its decision to sell its retail travel agencies to Airtours last year and spend the proceeds on business service companies in its three main areas - travel, financial services and transport - could prove equally canny.

The 21 per cent rise in profits before tax and exceptionals last year was mainly due to its travel arm. Business class is filling up again, so margins have improved. New orders are strong and it is market leader, with 36 of the FT- SE 100 companies on its books.

The travel business should grow comfortably for another two years or so thanks to the economic cycle. Hogg Robinson is using its cash pile to buy businesses in its other two areas. In financial services it is strong in pensions administration and advice, and one of its four takeovers during the past 12 months built on this to make it the country's second or third largest.

In transport, where its main subsidiaries performed well, the group added a north-of-England trailer firm to complete its national network. Brian Parry, chairman, says it is now looking for distribution firms to provide customers with a full logistics service.

With none of the acquisitions greatly affecting profits for the year to 31 March, their contribution alone will boost the current year's results. Strategic benefits - as companies outsource more financial administration or logistics planning - will be a bonus. Profits in the current year are likely to reach pounds 20m, implying a forward price-earnings ratio of 13.