Intrepid Travel set to buy two London travel businesses after surprise profit growth

Australian travel company Intrepid Travel is in negotiations to buy two London travel businesses, with founders Darrell Wade and Geoff Manchester set to sell 20% of the company in next three weeks in order to fund mergers and acquisitions.

Wade told SmartCompany that Intrepid has bounced back strongly from the downturn in the first half of calendar 2009, after the company was forced to ask staff to take pay cuts in December last year.

While the company had initially expect sales would be flat in 2008-09, the company finished up reporting revenue growth of 15% to around $130 million. It is expected to deliver a profit of $3.5 million.

The recovery has left Wade hungry for growth.

“It’s almost embarrassing how well we are doing, given how we felt nine or even six months ago, in terms of profitability and sales,” Wade says.

“We are expecting very healthy growth going forward… we will be hiring soon because of the M&A work we are doing.”

He says Intrepid is in active negotiations with two London companies, which will be funded through a 20% capital raising with an undisclosed buyer. Wade excepts to make an announcement on both deals, with an announcement expected in three or four weeks, he says.

Earlier this year, the company closed its London volunteer tourism business Mad Venturer (where customers pay to be involved in overseas aid work). Wade says Intrepid was unsatisfied with Mad Venturer’s products and sales.

The higher than expected growth allowed Intrepid to reinstate full pay from 1 July for its 130 staff who took pay cuts in December 2008. It also gave staff bonuses of 25% of the money they lost.

The pay cuts were part of an extensive restructure to cut costs. Wade says the restructure included the closure of a separate marketing and sales division, which was merged with the existing company.