20 February 2019

CTM delivers strong 2019 half-year results

CTM on track for top end of guidance after strong 1H growth

Total Transaction Value      $2,951.5m       +31%
Revenue and other income $212.2m          +23%
Underlying EBITDA             $64.6m            +21%
Underlying NPAT                $42.6m            +20%
Underlying EPS                   39.4c/share     +17%
Dividend payable                18c/share        +20%
All figures $AUD

Corporate Travel Management (CTM, ASX: CTD) today reported its 2019 half-year results, with earnings (EBITDA) of $64.6 million reflecting a 21 per cent increase on the previous year. The company is now trading at the top of its previous guidance range, at $150 million.

CTM Managing Director and founder Jamie Pherous said the strong performance highlights the company’s strategy to build a global network by applying a high-quality growth business model.

“Our value proposition remains as compelling to our customers today as it did when we began operations 25 years ago,” he said. “CTM’s unique blend of service, technology and delivering a return on investment is a key driver of our ongoing success.”

CTM’s global operations continued to grow, recording $2.95 billion in total transaction value, up 31 per cent, with revenues up 23 per cent. Organic growth contributed $9.4 million to the company’s profit growth, reflecting the efforts of CTM’s hard-working team to win and retain customers.

“Our diverse business model and global footprint gives us a competitive advantage, while our proven M&A strategy is also providing strong returns,” Mr Pherous said. “Our win and retention rates are at historically high levels, and this includes several multinational customers that recognise our international capabilities.”

Regional performance

CTM’s founding region, Australia and New Zealand, continued to outperform, reporting an 18 per cent increase in underlying EBITDA to $22.3 million. This result was secured with record win and retention rates, while approximately 80 per cent of customer transactions are now completed online.

Europe delivered an underlying EBITDA of $16.8 million up 30 per cent on the prior corresponding period. The region continues to outperform the market despite patchy activity related to Brexit.

North America provided steady revenue and profit contributions, with underlying EBITA at $17.9 million. Revenue was up 18 per cent on the previous corresponding period and CTM is expecting a strong second half with its technology suite ready for ongoing roll-out

Asia is performing well across all segments, delivering underlying EBITDA of $12.5 million, up 34 per cent. Superior technology is securing further customer wins and growing the sales pipeline, while the Lotus integration is achieving early revenue and cost synergies.

Global presence and technology

Mr Pherous said CTM has been winning significant global customers because of its innovative SMART Technology suite.

“Our technology development strategy and regional tech hubs are paying dividends as they allow us to customise the global technology platform for local market needs,” he said. “This provides us with a distinct competitive edge and there are a number of exciting opportunities in all of our operating regions, particularly North America and Asia. We will continue to deliver further enhancements to our technology suite based on customer needs.”

Mr Pherous said CTM’s employees remain central to the company’s ongoing success, with staff engagement levels continuing to outperform benchmarks.

Looking ahead

Mr Pherous said CTM would continue to focus on successfully executing its value proposition in every global market, delivering customer service excellence and industry-leading technology solutions that demonstrate a return on investment.

“CTM has been delivering travel management services for 25 years and we have great relationships with our customers who trust in our ability to look after them. We remain focused on executing our strategy to establish a global footprint and generate scale, creating opportunities for long-term, sustainable growth. We will also pursue acquisition opportunities that will further enhance our offering to customers throughout the world.”

The CTM Board has declared an interim fully franked dividend of 18 cents per share an increase of 20 per cent on the prior corresponding period. It will be paid on 12 April 2019.