Luxury travel group Western & Oriental has managed to narrow annual losses despite falling revenues.

The company, whose subsidiaries include Made to Measure Holidays and Tropical Locations, said a series of cost-cutting and integration measures helped it narrow pre-tax losses to £785,000 from £4.1m in the year ending 30 September. The firm reported a pre-tax profit of £100,000 in the first half.

However shares slid sharply on the news, and were 15 percent lower in early trading.

The group said trading conditions remained difficult throughout the year, due to the global recession, poor consumer confidence, weak sterling and health scares caused by swine flu. This resulted in a significant fall in consumer confidence and reduced advanced booking patterns.

David Howell, Chairman, said: “Despite the difficult trading year the group has made material progress culminating in the delivery of a profit before tax and a positive EDITDA result for the year.”

He added: “The group’s decisions to significantly reduce the cost base at the end of the 2008 financial year and integrate the product offerings, coupled with a degree of consumer confidence post August 2009, allows the board to view 2010 with some increased optimism”.

Over the past year, the group made strides towards a “one brand” strategy, with a new generation of tour operating brochures now all under the W&O Travel brand.

W&O has also consolidated its conference and incentives business into a single brand, W&O Events, operated under one management team.

“It is anticipated that in addition to synergies, the above actions will provide a much improved platform for organic growth as we move into the 2010 financial year,” said Howell.