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CORPORATE Travel Management (ASX: CTD) has reported its strongest ever full-year results, with a net profit increase of 42 per cent to $67 million thanks to strong growth across Europe and the US as well as Australia and New Zealand.
The Brisbane-based company's underlying EBITDA of $98.6 million, a 43 per cent increase on the previous year, and revenue increase to $325.9 million (23 per cent) means its FY17 results are its 23rd consecutive year of growth.
Founder and MD of Corporate Travel Management (CTM) Jamie Pherous says the company's global expansion strategy had driven the result along with organic growth which contributed to $16 million of its profit.
"What we're really happy about is that we're taking a great value proposition, which is an Australian business, around the globe and we are outperforming the market everywhere we go and that's our aspiration," Pherous says.
"The highlights were excellent organic growth particularly where we've rolled out the technology which is giving us good results and just reaffirms the value proposition we've created is relevant not just in Australia but also overseas."
CTM's North American business proved to be a major contributor to both revenue and growth while Europe was the top performing region by growth percentage with underlying EBITDA of $18.4 million which was a rise of 202 per cent.
"In US and Europe, we are only at the base in terms of growth in these markets which are huge and we are tiny player in that market, well we are actually a top 10 player in each market so maybe not so tiny, but these markets are so huge and fragmented that it offers such an opportunity," Pherous says.
Although CTM has clearly focused its growth on overseas markets, its founding regions, Australia and New Zealand, reported a 28 per cent increase in underlying EBITDA to $36.3 million, resulting from a highly optimised business model and an 80% uptake in its technology solutions by customers.
With an underlying EBITDA of $35.9 million, up 69 per cent (75 per cent on a constant currency basis), CTM's North American business was only marginally behind Australia and New Zealand as its largest profit contributor, which recorded an underlying EBITDA of $36.3 million, up 28 per cent.
CTM reported that it was winning significant global clients off the back of its increased global presence and award-winning SMART Technology offering, now established in all regions and with a large flow of developments scheduled for FY18.
"We had record client wins and retention and this was all around the world and this was about 97 per cent, and this was all about automation," Pherous says.
"At the end of the day the automation to scale is getting us results as well so we're winning a lot of business but that's translating down to the bottom line.
"That's because we're so obsessed with giving customers tools that will help them as well as stripping away non-client facing processes from our staff so they have more time to service and through that become more productive."
CTM expects full-year underlying EBITDA for FY18 to be in the range of $120 to $125 million, representing 22 to 27.5 per cent growth on this financial year.
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