CORPORATE Travel Management (ASX: CTD) is flying high today across all scores and delivering record profits, with investors seeing nothing but blue skies for the company.
The Brisbane travel company posted a statutory net profit after tax of $42.1 million, up 60 per cent on its previous full year result.
CTM's share price kept bouncing to all-time highs in the lead-up this week, to open at $17.70 today, before dropping below $17 and creeping above $17.50 again before midday.
Managing director and founder Jamie Pherous says the result is 'excellent' for his company, which operates in 53 countries, especially in light of a challenging global environment.
Every region CTM operates in delivered record profits over the period.
Revenue was up 34 per cent to $264.8 million, falling 2 per cent shy of guidance. Brexit seemed to have only a slight impact on the company, which is exposed to all continents bar Africa, with Pherous believing CTM missed out on 'at least $1 million' due to a 20 per cent slowing in the four months leading up to the global event.
"We have continued to expand through increasing market share. Organic growth contributed to approximately 80 per cent of our profit growth, reflecting the efforts of our hard working team to win and retain clients, including multinational clients who have recognised our international capabilities," says Pherous.
"In fact, we have been winning a regional account every 4 weeks because of the CTM global network we have built.
"Most pleasing was the operating cash flow conversion, which was over 120 per cent during the year, reflecting the success of the business model despite significant expansion."
Australia and New Zealand are mature markets for CTM, and despite a decline in resource clients, the company here saw its underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) rise 10 per cent to $28.3 million for the period.
Pherous says CTM 'had a cracking second half' in North America, a region he sees as having great potential for the business going forward. He expects CTM's recent cash-funded acquisition of Travizon in Boston to deliver in the next half.
Underlying EBITDA was up 123 per cent in North America, and 41 per cent across the group.
"Everything we said would happen in the US, has happened," says Pherous.
"We won clients, had integration success, and the acquisition of Montrose in California has really helped them and helped us. We have the right shape, size and scale. We are in the game now in the States.
"We have a real low exposure to Brexit, with no finance, property and construction clients - a bit lucky and a good place for us to be. Client activity post the Brexit has largely recovered. Brexit could throw up some opportunity though and we are opportunistic."
The Australian dollar is currently being a 'bit stubborn', he says, but CTM is still assuming a foreign currency of 74c across FY17.
CTM has forecasted a full year underlying EBITDA in the range of $85 to $90 million, representing 23 to 30 per cent growth on the prior corresponding period.
CTM is paying a fully franked final dividend of 15c per share, which shareholders will receive on October 6.
Read and watch Business News Australia's exclusive interview with Jamie Pherous, on why it pays to keep business simple.
Corporate Travel Management ranked at number 13 on Brisbane Top Companies 2016.
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