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- Shares in Corporate Travel Management (CTD) were up almost 4 per cent this morning on the back of a positive outlook for international travel
- While revenue fell 75 per cent and the company reported a loss of $36.4 million, it said the results were better than anticipated
- Vaccine rollouts in the U.S. and U.K. are expected to accelerate the revival of international travel, but business in Asia is likely to remain bleak for the next six months
- As of February 15, the company had $115 million in cash and $178 million on an undrawn credit facility
- Corporate Travel Management is up 3.69 per cent to $18.68 per share
Shares in Corporate Travel Management (CTD) were up almost 4 per cent this morning on the back of a positive outlook for international travel.
While revenue fell 75 per cent from $222 million last year to $56.5 million and profits dropped from $32.9 million to a loss of $36.4 million, the Brisbane-based provider of business travel solutions said the results were better than anticipated.
Despite the drop in financial performance, client acquisitions continued across North America, thanks in part to the purchase of Travel & Transport (T&T) in late October last year. Corporate Travel Management said the integration of T&T is on track with $25 million in duplicated costs eliminated.
“We are positioned to be a significantly larger business post-COVID due to the strategic acquisition of T&T, the organic growth dynamics we are experiencing and a lower permanent cost base,” said Jamie Pherous, Managing Director of Corporate Travel Management.
“Significant new client wins across all of our regions supported a better than expected first-half earnings result and have given us revenue momentum into the second half,” he added.
Given the prevailing uncertainty surrounding travel restrictions, the company said it was not in a position to provide earnings guidance for the next six months and elected to withhold the distribution of dividends.
However, Pherous noted that Corporate Travel Management was “very close to a break-even position” with operations in Australia, New Zealand and Europe expected to be profitable in the second half.
2020 was a dismal year for the tourism and aviation sectors, with the number of Australians returning from short-term overseas trips falling to its lowest level in 24 years.
But with an accelerated rollout of vaccines in key markets like the U.K. and the U.S. — which accounted for roughly 70 per cent of the company’s pre-COVID revenue — Corporate Travel Management maintains it’s “well positioned for the incremental revenue gains from travel relaxations in these markets.”
The impending recovery is bolstered by a strong balance sheet, with $115 million in cash and $178 million on an undrawn credit facility as of February 15.
Corporate Travel Management is up 3.69 per cent to $18.68 per share at 1:50 pm AEDT.
