Corporate Travel Management misses guidance

The travel company has failed to meet its bullish forecasts, saying its one-off war related projects in the Middle East and Europe had tapered off faster than expected.

Corporate Travel Management boss Jamie Pherous. Picture: Claudia Baxter

Corporate Travel Management failed to meet its bullish forecasts for the financial year, saying its one-off war related projects in the Middle East and Europe had tapered off faster than expected in the second half.

The Brisbane-based global travel business group also disappointed the market by lowering its outlook for the current year.

However, the group posted positive revenues, underlying EBITDA and net profit for the 12 months to June 30.

Revenue grew by 9 per cent to $710.4m, missing market expectations, while underlying EBITDA jumped 21 per cent to $201.7m.

Underlying profit before income tax jumped 26 per cent to $156.7m.

Corporate Travel Management also reported a one-off project underperformance in the second half in Europe, with EBITDA down 48 per cent in the second half.

“We managed people fleeing war zones, we are really proud of that,” Corporate Travel Management managing director Jamie Pherous said in an interview with The Australian. “It’s now business as usual.”

“The Europe project is coming off, it was based in the Middle East, Afghanistan and Ukraine, we were helping people flee war torn countries and housing them and 90 per cent of those people are now in long term housing solutions in Europe. They were pretty large projects, it’s private and government work. The reality is, it’s now largely finished.

“The underlying business has performed really well. But it’s been masked by the fall off by the work in Europe.”

Investors sold off on the profit miss, with shares down 7 per cent to $11.61 during intraday trade.

Analysts such as RBC Capital Markets said the market “would not like the result”, noting that the 2024 financial year revenue and EBITDA both came in well below the bottom end of guidance which was last provided at the company’s first-half results in February.

“Full-year 2025 guidance also appears to be a 13 per cent downgrade … while the unwinding of one-off work in Europe was offered as a reason for the downgrades, we note that misses were geographically across the board,” RBC said in a note.

Corporate Travel Management CEO Jamie Pherous.

Mr Pherous would not disclose the profits CTM made from the various European contracts, citing the sensitivity of the government and corporate customers.

CTM also noted that greater China was also slower in its post covid recovery in the second half because of its slower outbound airline capacity coupled with 21 per cent ticket deflation, but that was partially offset by an 11 per cent jump in transaction growth.

Led by North America, Mr Pherous said growth in the rest of the world had been very strong, with momentum in Australia also solid.

“Australia and North America in the second half both grew 39 per cent, which brings us good momentum.”

“The rest of the world is very strong. We are expecting 10 per cent revenue growth.”

“It will be business as usual, we are flush with cash, we extended a buyback, for $100m which shows the healthy position we are in.”

Asked if Corporate Travel Management would be purchasing any more companies, he said “we are always looking,” adding that “we have no debt.’’

“North America is doing the best – in the last quarter, profit was up 46 per cent on the quarter.” North American revenues grew 2 per cent to $309.2m.

“Our biggest regions are performing the best,” he said.

Shareholders will receive an unfranked total dividend of 29c for the full year.

Originally published as Corporate Travel Management misses guidance