Corporate Travel Management profits from UK asylum seekers, says Jamie Pherous
Partially aided by its $3bn two-year contract with the British Foreign Office to house asylum seekers, Corporate Travel Management’s earnings have more than doubled.
Partially aided by its $3bn two-year contract with the British Foreign Office to house asylum seekers on a barge in Portland, Dorset, Corporate Travel Management’s annual underlying earnings have more than doubled.
Managing director Jamie Pherous said he could not comment on the arrangement with the Foreign Office to house the migrants. But he later sought to soothe investors, claiming to The Australian that just one per cent of the UK’s 50,000 asylum seekers would inhabit the barge known as the Bibby Stockholm.
“This one vessel can hold up to 500 of them … the contract is for two years with a one-year extension,” he told The Australian.
“I can’t talk for the British Government, but our responsibility is limited to the accommodation allotments, transport, hotels, and that is where our responsibility stops.
“We are not responsible for duty of care, security, infrastructure, and vessel designs. “We are very comfortable with what we are doing, it supports humanitarian standards,” he said, adding that “it was part of the remit.”
Mr Pherous said the asylum seekers had freedom of movement, and that all accommodation has got oversight of internal audits. “That one vessel has only housed 20 people so far.”
Moving forward, Mr Pherous told an investor meeting that the Brisbane-based company would concentrate on winning and retaining new business, leveraging its scale with new technology, and reinvesting with its people, by further training and developing staff.
CTM’s underlying earnings soared to $167.1m for the year ended June 30 from $59.8m a year earlier on the back of a 70 per cent jump in revenue to $660.1m, which exceeded the company’s forecasts.
Total transaction values jumped 77 per cent to $8.95bn from $5.07bn, while client retention stood at 97 per cent for the 2023 financial year, accounting for $2.95bn worth of business.
However, Barrenjoey’s Annie Zhu said the result was weaker than expected given operating cash flow from Australia and New Zealand and North America missed earnings and lower revenue guidance.
But Mr Pherous said CTM was at the midpoint of guidance which was roughly $110m with profits of $265m.
RBC Capital Markets said CTM’s results were broadly in line with expectations, however, its 2024 financial guidance and trading commentary will be a point of market contention.
“From an earnings perspective, the key positive is that UK Government work is expected by CTM to result in European EBITDA exceeding $100m in FY24.
“However, market opinions on CTM’s humanitarian work undertaken are mixed. Strength in Europe and largely unchanged guidance (at the midpoint) imply that Australia and New Zealand and North America appear to be taking longer to get back to proforma-pre-Covid levels,” said RBC Capital Markets in a note.
In North America, CTM averaged $6m a month in underlying earings since March due to new client wins.
An unfranked dividend of 22 cents was declared for the full year.
CTM shares were down 9.9 per cent at $17.50 in a higher market late Wednesday morning.
More Coverage
Lessons learnt from mixing business with pleasure
If Richard White had been granted a court suppression order his private life would have stayed private but the fact he didn’t and its fallout is a lesson for people in positions of power.
Administration the go-to rescue plan for growing number of execs
The number of Australian executives putting their companies into voluntary administration in a bid to turn their flagging fortunes around is growing, ASIC figures show.