Offshore business leads Corporate Travel recovery

Corporate Travel Management booked a net loss, but Jamie Pherous says he’s taken 26 flights since January to win new business as its North American and European sectors fire up.

Corporate Travel Management CEO Jamie Pherous after their AGM, Brisbane. Picture: Liam Kidston

The North American and European businesses of Corporate Travel Management are outperforming pre-Covid conditions, but the Brisbane-based travel group still produced an after tax net loss of $400,000 for the half year.

Reporting its results on Wednesday morning Corporate Travel Management said it produced an underlying EBITDA (earnings before interest tax, depreciation and amortisation) of $18.2m for the half year compared with a $15.2m loss for the corresponding period.

The group’s shares jumped on the news, trading up 4.6 per cent at $1.25 in midmorning.

Speaking from Colorado, where he is based until at least the American summer, Corporate Travel Management managing director Jamie Pherous said Europe produced a record first-half profit of $21m.

“This shows just how much business the company has won during Covid. I have made 26 flights since January 1. We have won clients because we are prepared to get on a plane and have resolved supply chain constraints, which has been a great benefit to the business,’’ he said.

Mr Pherous said throughout covid talking to customers face-to-face had been invaluable in terms of getting the business back on track.

“Also talking to our key suppliers, such as airline carriers and hoteliers in person … it’s been invaluable to eyeball people.”

During covid there has been supply chain issues with clients not getting inventory on time which can affect their business. “We are seeing airline carriers in person and having strategic dinners with them. Our customers are also telling us how helpful it is to see their clients face-to-face.”

“We have been spending days and having dinners with key suppliers such as hotels and airlines,” he said.

Mr Pherous said he had won new business by visiting clients hence the 26 flights he has made since January 1.

“The fact is we have a lot of technology so we can develop what customers want such as (latest) covid information when they are travelling.

“Customers want a really good technology platform, underpinned by great expert service and in this environment that is playing to our strength.”

Billing itself as the world’s fourth largest business travel group, the company produced group revenues of $163m for the first half, which were 27 per cent down on pre-Covid revenues.

Corporate Travel Management did not provide annual profit guidance given the “uncertain short-term trading environment”.

Despite the strong European and North American performance, where revenues grew 206 per cent to $90.1m, Corporate Travel Management’s Australian and New Zealand operations dragged down global earnings. The region produced an EBITDA of just $900,000 for the first half while its before tax losses were $5.1m compared with $1.6m in losses for the previous half.

However, Mr Pherous said the result was due to the fact that the company used to get government support, but with Delta and Omicron travel conditions were worse and there was no state or federal support.

“There was no government support despite travel restrictions being much more dire than a year ago.”

Corporate Travel Management’s Asian divisions were buffeted by losses of $4.6m for the first half but the company said these were “well contained” and occurred due to travel restrictions across much of the region during the first half. “It is a difficult environment in Asia, things are still closed down, we expect it to be marginally loss making until travel reopens,” Mr Pherous said.

However, he said that Australia and New Zealand were rebounding really strongly.

“We are running at 55 per cent of pre Covid bookings for the whole Australia and New Zealand region compared to 34 per cent for the previous corresponding period.

“It shows how hard it is bouncing. There are no impediments to travel you can go to Brisbane, Sydney and Melbourne without a test.”

Mr Pherous also pointed to the potential of the North American businesses once the travel market fully recovers.

“Strategic mergers and acquisitions has made North America our largest region and integration execution is well advanced,” he added.

“Because of our expanded global footprint and strong financial position, we are targeting

EBITDA of $265m in full recovery compared with $150m pre-pandemic,” Mr Pherous said, adding that the company will continue to look for more acquisitions.

At least $8m in synergies are expected from Corporate Travel Management’s recent $150m acquisition of Helloworld Corporate which is strong on government contracts and events and conferences.

“What we love about their (Helloworld’s) business is the events in music and film that they do.

“Events and conference bookings are running at 150 per cent pre Covid, it’s a thematic we particularly like.

“We know that for musicians to make money they have to tour, we are going to invest in Helloworld’s Show Travel business heavily.

“Our aim is to potentially take it global. There’s more films being made than ever before. “If people want to get their people together conferences and events bookings are much higher than pre-Covid, which makes sense.”