Corporate Travel Management flags recovery under way, led by North America and Europe

Corporate Travel Management is faring better than most of its competitor travel companies reporting a fourth quarter underlying profit of $13.6m.

Corporate Travel Management, led by managing director Jamie Pherous, is faring better than most of its competitor travel companies reporting a fourth quarter underlying profit of $13.6m. Picture: Liam Kidston.

Bolstered by the rapid recovery of its North American and European divisions, which account for 80 per cent of global revenue, Corporate Travel Managed fared better than most competitor travel companies as it reported a fourth-quarter profit of $13.6m.

“We are doing really well in the markets that have high vaccination rates,” said Corporate Travel Management founder and managing director Jamie Pherous, adding that North America and Europe were the markets that were the most open and were providing the most opportunities.

“Our largest regions such as Europe and the US have the most impact on future performance and are recovering the fastest consistent with the advanced vaccine rollouts.

“We have a path to recovery. I would not want to be dependent upon the Australian and New Zealand borders opening up to be successful,” he said, releasing the full-year results on Wednesday. “Thankfully we are not reliant on Australia and New Zealand opening their international borders for us to be successful in 2022.”

Mr Pherous said the “penny had dropped for the government” and it had accelerated its vaccination program.

“We must accelerate it, it’s the only way to get business and life back to normal,” he said.

“I think now the government is doing enough,” said the businessman who has long campaigned for faster vaccination rates.

But despite the government now fast-tracking its vaccination rollout, it will not be enough for international travel to resume this year for Australians.

“International travel is not going to happen this financial year in Australia or New Zealand, but we are not reliant on that,” Mr Pherous said. “Thankfully, our biggest catalysts for ­recovery are all located in North America and Europe.’’

On the employee vaccination front, Mr Pherous said most of his staff were fully vaccinated. “Our staff understand high vaccination rates are crucial to the recovery,” he said. “Our team understands that it is intrinsic to the future of the business. We encourage it, we don’t have to mandate it because our people are doing it voluntarily around the world … given that open and unrestricted borders are dependent upon high rates of ­vaccines.’’

Mr Pherous emphasised that CTM posted a $13.6m fourth-quarter profit although across the full year it sustained a $7.2m loss.

“We have been profitable in the fourth quarter, we expect that to continue and grow,” he said.

Bolstered by the rapid recovery of its North American and European businesses, Corporate Travel Management said it had fared better than most of its rival travel companies during Covid-19 with its fourth quarter profit representing a $19.1m turnaround on the previous quarter. But flush from the acquisition of the giant Travel & Transport group in October last year, CMT reported an earnings before interest and dividends loss of $7.2m for the full year.

The Brisbane-based group intends to pay dividends next year.

“We returned to positive underlying EBITDA in the second half because of a rapid turnaround in fourth-quarter activity from North America and Europe,” Mr Pherous said.

CTM finished the year with no debt and cash in hand of $99m. It did not provide earnings guidance.

In a note, Morgans said CTM was the only travel company to be EBITDA positive in the second half of 2021 “despite Australia going backwards from the end of May due to Covid restrictions”.

CTM’s shares closed 17c lower at $21 on Wednesday.