(L-R): Pearl Peng, consultant, Aries Consulting, Mark Lee, executive director, Aries Consulting, Larry Lo, MD, Westminster Travel Ltd
THE TRAVEL INDUSTRY took a severe beating in late 2008 and in 2009 when corporates cut back on their travel budgets and leisure travelers postponed their holidays.

Despite this business downturn, a travel agency expanded its operations, moving into a swanking new office in Kwun Tong. That company is Westminster Travel Limited, listed on the Catalist Board of the Singapore Exchange.

“It was not an easy decision but we have plans to grow our operations to prepare for the next growth phase,” Dato' Dr SJ Wong, Chairman of Westminster, told 250 guests at the opening of the office recently.

Listed in January, Westminster and its subsidiaries (the "Group") was the first IPO on the Singapore bourse this year. The Group is a one-stop travel management and services group offering a wide range of travel products and services.

It is principally engaged in the provision of corporate travel services and the wholesale of air tickets, hotel rooms and travel packages. It also provides leisure travel services.

The Group generated revenue of HK$153.9 million and net profit of HK$16.5 million for the year ended 30 June 2009. Profit would have been higher but for a one-off expenses of HK$10.4 million pertaining to the IPO expenses.

The Group has declared a dividend of HK2.5 cents per share.  

Aries Consulting chatted with the Chairman, MD and Finance Director during the opening of their office: 

Aries: Why the decision to expand the office premises in a tough operating environment? 

Dato' Dr Wong (Chairman): This was a decision made based on the long-term sustainability of the business. We are expanding very fast and needed more space to group our operations together. When the suitable location came along, we quickly grabbed it. Besides, expanding in a difficult environment allows us to bargain for better rental rates. The rental for similar offices have shot up 10-15% since we signed the tenancy agreement. 

Aries: What’s the impact of the financial tsunami and the H1N1?

Dato' Dr Wong (Chairman): The impact differs across regions and business segments. The impact on the corporate travel segment was in general greater than that on the wholesale and leisure travel segments in the regions where we operate. As we have a strong distribution network and more product offerings, I like to think that our business is more resilient than that of our peers. 

At the office opening: Dato' Dr Wong is 4th from right while Henry Chu is third from right.
Larry Lo is on the extreme left

Aries: What is the key requirement to running a successful travel agency? 

Larry Lo (MD): Westminster Travel was awarded the “Best Travel Agency-Hong Kong” of TTG Travel Awards 2009 for the second consecutive year. Staff morale, service standards, quality of travel products and operational efficiency will continue to be enhanced to ensure that our core competences remain strong. 

Aries: Moving ahead, how would you navigate Westminster to the next phase of growth?

Larry Lo (MD): We are leveraging on our strength in the ability to generate high sales volume, our competitive edge in product sourcing and our efforts and investment in the information technology development.

We will continue to compete aggressively in the business-to-business market. Our target is to expand both our corporate and leisure travel businesses.

Concurrently, we will also be looking out for suitable acquisitions, joint ventures or alliances to extend our network of travel services in the region especially in the PRC. 

Recent stock price 18 cents
Market cap S$50.4 million
52-week high/low 25.5 cts/8.5 cts

Historical PE ratio

Aries: How’s the financial status of the
Company? Do you need additional funding?

Henry Chu (Finance Director):  As at 30 June 2009, the Group had cash and cash equivalents that amounted to HK$110.3 million (FY2008: HK$74.9 million), and had no borrowings from financial institutions.

This not only gives us flexibility in planning our growth but also puts us in a good position to consider any M&A opportunity. Regarding additional funding, we will take things one step at a time and evaluate the opportunities ahead.

Recent story: WESTMINSTER: Leading HK travel agency is first 2009 IPO 

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