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Corporate Travel Management (ASX: CTD) has made a flying start to the new financial year with revenue up 36 per cent in the first quarter compared with a year earlier.
The Brisbane-based travel services company, which also announced a $100 million share buyback plan today, says that while it is expecting a stronger first half than previously forecast, it has not changed its forecast FY24 guidance range.
The company is still targeting EBITDA of between $240 million and $280 million with revenue of between $770 million and $850 million.
Corporate Travel Management told shareholders at its annual general meeting today that is targeting record earnings per share in FY24, noting robust conditions amid forecasts by the Global Business Travel Association of 7.9 per cent growth per annum for the sector between 2023 and 2026.
“CTM has entered FY24 with strong revenue and earnings growth momentum, building on our strong operational performance in FY23,” Corporate Travel Management’s chairman Ewen Crouch told shareholders.
“Our annual Global Customer Survey, which was conducted in May 2023, indicates a growing appetite for corporate travel.”
The company closed out FY23 on a strong note, with a 367 per cent increase in underlying net profit after tax to $92.5 million.
The result was driven by a 70 per cent surge in group revenue to $660.1 million as demand for corporate travel globally surged across all of the company’s geographic divisions.
Corporate Travel Management today revealed that revenue for the first quarter of FY24 rose 36 per cent to $187.9 million.
Underlying EBITDA has spiked 157 per cent to $56.6 million as margins almost doubled to 30.1 per cent from 15.9 per cent the same time last year.
The latest figures look set to meet forecasts by founder and CEO Jamie Pherous, when announcing the FY23 results, that the company will deliver a record profit in FY24.
The company says it has secured about $500 million in new business so far this year, which it categorises as ‘verbal wins’, implying that contracts have yet to be signed.
The company also reveals that business from large clients, a sector that has been a ‘recovery laggard’ until now, is ‘gradually improving’.
Corporate Travel Management, which now generates 80 per cent of its business from its offshore divisions, is forecasting a stronger first half than previously expected.
The first half is usually softer due to the traditional northern hemisphere summer holiday period with the expected one-third skew of its business during the period coming in higher than expected.
Corporate Travel Management has 5,700 clients globally, with 40 per cent of them in the government and essential travel sector. The company expects to make over 17 million transactions in FY.
The strength of the company’s balance sheet, with zero debt, has led the company to launch a $100 million on-market share buyback to enhance shareholder returns. The 12-month buyback will start 15 November 2023.
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