16 February 2022
Corporate Travel Management - 1H22 Results
Ongoing earnings recovery and M&A execution drive first-half results
Corporate Travel Management (CTM, ASX: CTD) reported underlying EBITDA of A$18.2m (1H21: -A$15.2m) and a strong revenue rebound in the first half of FY22, building momentum in spite of the impacts of the Delta and Omicron COVID-19 variants.
Group revenue and other income increased by 120% to A$163.0m for the first half of FY22, compared to the prior corresponding period and only 27% below pre-COVID revenue.
CTM also maintained its strong balance sheet with no debt and sufficient cash to manage through to full recovery.
While the Omicron COVID-19 variant reduced travel activity from November 2021 to January 2022, CTM currently expects a significant ramp up in activity in regions where travel restrictions are relaxed or removed.
The United Kingdom and North America are experiencing a rapid rebound in client activity in February 2022 as restrictions have been lifted. The Group also expects to benefit from a greater than normal seasonal weighting of corporate travel activity towards the second half of the financial year.
CEO North America, Kevin O’Malley said, “Revenue is back above pre-CTM COVID levels, which points to how effectively we have integrated the Travel & Transport acquisition and the potential of the consolidated business as the travel market fully recovers.
“Our revenue rebound shows that clients highly value our model of personalized service and proprietary technology because it helps them navigate the current complexities of the travel environment. This is translating into record new client wins and strong revenue momentum.”
North America expecting early return to pre-COVID profitability
CTM North America reported positive underlying EBITDA for the period and expects an early return to pre-COVID profitability on the back of synergies and market share gains after integrating Travel & Transport.
North America reported a 213% increase in revenue to A$92.0m for the six months to December 2021 (1H21: A$29.4m) with both TTV (1H22: A$949.0m) and revenue back above pre-CTM COVID levels.
North America led the Group in new client wins, demonstrating growing client support for CTM’s service proposition and technology offering.
With domestic travel restrictions removed in February and international restrictions expected to wind back in 4Q22, CTM expects improving profitability in North America as a result of three drivers.
- Increased penetration of Lightning online booking tool – Lightning creates efficiency gains, freeing up expert travel advisors to service complex travel itineraries. The software has achieved solid client acceptance with a number of new blue-chip US and global clients implementing Lightning.
- Integration benefits – CTM’s integration of a single client system will be completed in June 2022 and is expected to create efficiency benefits on a full recovery of travel activity that is significant and beyond initial expectations. Full integration will improve productivity and allow advisors to focus on providing greater value for clients, as well as unlocking further automation in proprietary agent tools.
- Market share gains driven by superior technology, service, and sales investment –The Group’s financial strength allows the business to continue investments in enhancing client and agent solutions. CTM has also established a dedicated team focusing on global clients, with three new clients totaling more than US$80m in annual TTV won in 2Q22.
While CTM has not offered FY22 profit guidance because of the uncertain short-term trading environment, the Group expects underlying EBITDA will continue to build in February and March 2022 as organizations in North America, UK/Europe, and Australia/New Zealand return to working in offices after the Omicron variant subsides and restrictions are removed.
The Group will continue to assess acquisition opportunities that support the global strategy to create more levers for long-term organic growth.
For further information
Executive Director, Marketing
+1 301 941 0354
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