Managing Director, Jamie Pherous.
The Group is recovering faster than the broader corporate travel market through increased market share and 97% client retention, with revenue recovering to 69.5% of average FY19 pro-forma revenue1 in the fourth quarter, compared to IATA’s reported average of 60% across CTM’s regions.
CTM reported an underlying EBITDA for FY22 of $59.8 million, increasing from a loss of $7.2 million in FY21. While CTM has remained profitable at an EBITDA level since early 2021, the key driver of the FY22 result was the fourth quarter. In 4Q22, CTM earned revenue and other income of $140.8 million, underlying EBITDA of $35.7 million, underlying PBT of $25.5 million and underlying NPAT of $20.5m. The board has determined a 5.0c dividend (unfranked), payable 5 October 2022.
The Group is recovering faster than the broader corporate travel market through increased market share and 97% client retention, with revenue recovering to 69.5% of average FY19 pro-forma revenue1 in the fourth quarter, compared to IATA’s reported average of 60% across CTM’s regions. Momentum continued with revenue recovering to 74% of the pro-forma FY19 average in June 2022.
At 30 June 2022, the Group had no debt and $127 million corporate cash with strong operating cashflows enabling continued investment in proprietary technology.
Managing Director, Jamie Pherous, said, “Our customers are embracing the opportunity to return to face-to-face connectivity in a post-COVID world. Following the removal of most border and travel restrictions globally, the fourth quarter momentum makes us optimistic for the future, and we are pleased that the business has successfully translated that momentum into earnings.
“CTM is a different business than it was prior to the COVID-19 pandemic. We are larger, more diverse and more relevant to our market globally. This gives us an exciting platform from which to continue our organic growth trajectory in FY23 and beyond. Our results in FY22, and particularly in the fourth quarter, put us on a path to full recovery in the near-term.”
Travel industry resourcing challenges
The travel industry continues to face unprecedented resourcing shortfalls with corresponding challenges to service levels, airport and airline capacity.
Addressing this challenge within our operations remains the Group’s number one priority as it moves into the new financial year. The Group added 950 new employees during the financial year as part of its commitment to maintaining service levels to support customers’ travel needs in this complex and fast-changing environment.
Given the global shortage of travel-industry people, CTM has engaged in several initiatives to manage the shortfall, including innovative employee recruitment, training, on-boarding and retention initiatives to attract and retain the best talent in the industry. The Group continues to deliver enhanced internal efficiencies by implementing advanced automation and new technologies across its operations, giving employees more time to deliver personalised customer service.
Highlights of CTM’s internal VIBE employee survey in June 2022:
- All regions recorded staff engagement scores above 85%, CTM’s pre-Covid benchmark
- 99% score for staff prepared to ‘go the extra mile’ for clients and a 98% score for both empowerment and CTM being an inclusive workplace with equal opportunity for all in terms of progress and development.
Increasing scale and technology investments are driving productivity gains with improvements in revenue per FTE, which was 14% higher in 4Q22 than the FY19 average.
Trading Update and Outlook
Revenue in June 2022 equated to 74% of monthly average pro-forma revenue for FY191. Whilst the North American and European summer vacation period is typically quieter for corporate travel, forward bookings for September are strong. ANZ has shown continued resilience with no slow-down in travel activity, with TTV at pre-COVID levels. In Asia, a reduction in Hong Kong’s quarantine period from seven to three days from 12 August 2022 has created an immediate step-up in travel activity. The Group’s global customer survey, conducted in May 2022, found that 80% of respondents expect to travel as much or more in the coming 12 months as they did pre-pandemic.
CTM assumes a full recovery in FY24, referencing IATA’s projections for travel activity. Based on pro-forma numbers, known synergies and productivity improvements, this represents revenue of $810m and underlying EBITDA of $265m. The path to full recovery from an annualised 4Q22 underlying EBITDA of $143m to FY24’s $265m is not expected to be linear through FY23, due to capacity constraints and Greater China’s current travel restrictions.
However, CTM is confident of improving corporate travel demand in FY23 and expects both capacity constraints and China’s opening to be progressively resolved during FY23.
Tatiana is the news coordinator for TravelDailyNews Media Network (traveldailynews.gr, traveldailynews.com and traveldailynews.asia). Her role includes monitoring the hundreds of news sources of TravelDailyNews Media Network and skimming the most important according to our strategy.
She holds a Bachelor's degree in Communication & Mass Media from Panteion University of Political & Social Studies of Athens and she has been editor and editor-in-chief in various economic magazines and newspapers.
