Phoenix reshapes Expotel
PHOENIX Equity Partners has undertaken a debt-for-equity restructuring of its corporate travel bookings company Expotel.
Newly-filed accounts for the Stockport-based company reveal that a share issue undertaken in October last year saw £28.4m injected into the business through a new share issue. The proceeds were used to pay loan notes owed to Phoenix.
The new capital means the business moved from having a net deficit of £11.9m at the end of its last financial year to to a surplus of £12.5m at its year end.
Prior to the issue, Pheonix had owned over 64% of the shares in Expotel Group and almost 18% were in the hands of its former chief executive Ian Burnley, who was replaced in May 2011 by Ian Sparks.
Finance director Andrew Reynolds told TheBusinessDesk.com that the restructuring “puts us in a much stronger position” not only in terms of the company’s own finances, but also when bidding for new work.
“We’re in a better position when bidding for tenders and it gives reassurance to clients and our other suppliers of our financial strength.”
The accounts show that in the year to October 30, 2011, the total transaction values handled by the firm fell slightly to £175.3m (2010: £175.5m).
Despite this, the revenue it earned from bookings increased by 8% to £16.3m (£15.1m). Pre-tax losses climbed to £4.1m (£3.1m), including exceptional costs of £1m (£1.5m).
Around half of the exceptional costs relate to redundancy payments made during the year, and £334,203 related to the move of the company’s finance function from Northenden to Stockport last May.
Mr Reynolds explained that the lease at its Northenden base was due to expire so staff have been moved over gradually since May to the Stockport site, which is where its main call centre is based. The company operates other two other call centres in Glasgow and Leeds.
Its main subsidiary, Expotel Hotel Reservations, clocked up almost £60m worth of new business during the second half of the financial year, some of which was won at the year end.
This included a large tender for the whole of the Scottish government, including all central government departments, NHS Scotland and its universities.
However, the business also lost existing business with the UK government worth around £25m-£30m when the work was re-tendered.
Mr Reynolds said that the net impact for the coming years would be largely positive, however – particularly in 2012 as new work feeds in from its Scottish contract.
He added that the acquisition of Venues Event Management – for an initial £800,000, with a further £1.1m due if it hits targets – “strengthens the group’s operations and the platform for growth in this specialist business segment”.
“It’s won the best event management company for the last four years at the Meetings & Incentive Travel Awards,” he added. “It’s one of the best business in its space and it provide a very strong complimentary offer for a number of our corporate clients.”
Phoenix Equity Partners originally invested on Expotel in 2008 in a £38m deal which also saw it buy-out Manchester-based NIS Europe. Following the deal, Expotel moved its headquarters from Stanmore in North London to Northenden.
