16 February 2021
Corporate Travel Management 2021 first-half results Positioned for recovery with robust revenue, strategic acquisitions creating a much larger business upon recovery
17 February 2021
Corporate Travel Management 2021 first-half results
Positioned for recovery with robust revenue, strategic acquisitions creating a much larger business upon recovery
Corporate Travel Management is well positioned to benefit from a recovery in corporate travel activity, with Group revenue growing through the first half of FY21 and expected to accelerate in the second half.
After the acquisition of Travel and Transport (T&T) in late 2020, North America was CTM’s largest region in terms of revenue and new client wins.
The Group reported revenue of AU$74.2m for the first half of the financial year. December, which is typically the lowest activity month in the first half, was the highest monthly revenue at AU$17.3m including the T&T contribution.
The first half underlying EBITDA loss of AU$15.7m was lower than expected after a resilient revenue performance, despite the worsening COVID-19 impact in the second quarter.
The acquisition of T&T was completed on 30 October 2020 and integration of the business is on track. With its strong balance sheet, CTM is expected to emerge from the COVID-19 pandemic in a position of strength with enhanced opportunities for organic growth in North America.
Kevin O’Malley, CEO North America said, “Our scale and financial strength post-acquisition, combined with CTM’s personalized service and tailored technology solutions, have driven new client wins and given us real momentum in the North American market.
“Both our customers and employees have embraced the exciting opportunities of an expanded CTM business, and we are in a strong position to grow market share as business travel returns to pre-pandemic levels.”
CTM has capacity to pursue more value-creating acquisitions after acquiring Travel & Transport and Tramada in the first half of the year, with no debt, AU$119m cash and an undrawn, committed AU$178m finance facility.
Managing Director, Jamie Pherous said, “We are in a good position to capitalise on a recovery in corporate travel activity. We are now very close to a break-even position with new client revenue momentum, and we remain most leveraged to the largest travel markets that are also the most advanced in rolling out vaccinations.
“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.
“We have maintained service levels throughout the pandemic and continued to invest in our proprietary technology to deploy tailored solutions at speed in response to the fast-changing needs of our customers and the travel industry. In fact, technology spend is returning to pre-COVID levels.”
The Group has continued to invest in its technology platform with capex nearing pre-pandemic levels, focused on traveller wellbeing, risk management, safety and hygiene information and budget optimisation tools.
CTM’s ability to leverage its proprietary technology to rapidly respond to changing client needs during the pandemic has been an important factor in growing market share in the reporting period.
Mr Pherous said, “The USA (population 329m) has surpassed 50m vaccinations and the UK (population 67m) has surpassed 15m vaccinations. Both countries expect to have the high-risk segment of their populations vaccinated in this quarter, potentially allowing a relaxation in travel restrictions. Given 70% of our pre-COVID revenue is derived from the UK and USA, we are well positioned for the incremental revenue gains from travel relaxations in these markets.”
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