Shares in Western & Oriental, the acquisitive specialist luxury travel group, have wandered higher on an upbeat AGM announcement.

Chairman David Howell flagged up a good start to the year, with organic growth in line with expectations and margins maintained, despite ‘some evidence of pressure on pricing’.

The Ski Dream tour operation has had a strong start to the season, particularly in North America, and all of Western & Oriental’s conference and incentive (C&I) businesses are performing well. Howell added that the integration of the company’s tour operations brands ‘continues at pace’ – Western & Oriental has integrated 12 businesses and brands over the past 18 months alone. The benefits of added scale, synergies and better terms with suppliers are helping the group uphold margin in a competitive market.

Investors were also treated to positive comments on the order book, which has increased ‘very significantly over the same point last year’, both organically and with the help of acquisitions. In addition, African tours specialist Rainbow, bought in December for an initial £4.17m in cash and shares, is showing year-on-year growth despite the current situation in Kenya.

Back in December, Western & Oriental announced a 148% surge in turnover to £35.8m for the year to September, driven by a spate of acquisitions, although losses at the pre-tax line widened to £1.9m (2006: £1.3m). While we like its focus on specialist, niche tours, its strong order book and plentiful pipeline of deals, Western & Oriental operates in a sector linked to the vagaries of consumer spending and continues to digest acquisitions. For now it is a speculative share price recovery play, rather than an outright buy.

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Western & Oriental	AIM	£8.55m	3.75p	0.00p
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