Corporate Travel Management has reported that the six months ended 31 December, the company reported an 88% decline in total transaction value (TTV) to $403.8 million, leading to a 75% reduction in half year revenue (excluding government grants and other income) to $56.5 million, with including government grants of $13.7 million and other income of $4 million, revenue was down 67% to $74.25 million.
The company reported an underlying loss after tax of $26 million and a statutory loss after tax of $36.4 million, compared to a profit of $32.9 million in the prior corresponding period pre-COVID.
Corporate Travel Management though has net cash of $119 million, with this having educed slightly to $115 million as of 15 February, with the company also having a $178 million undrawn committed finance facility.
With the board not surprisingly not be declaring an interim dividend, the Managing Director, Jamie Pherous, remains positive on the future and notes that its operations are close to becoming break-even, saying, “We are in a good position to capitalise on a recovery in corporate travel activity because we have a strong balance sheet with excess cash for further opportunities”, adding, “We are now very close to a break-even position with new client revenue momentum and remain most leveraged to the largest travel markets that are also the most advanced in rolling out vaccinations.”
Mr Pherous also said, “We are positioned to be a significantly larger business post-COVID due to the strategic acquisition of T&T, the organic growth dynamics we are experiencing and a lower permanent cost base,” adding, “Significant new client wins across all of our regions supported a better than expected first-half earnings result and have given us revenue momentum into the second half,” and “We have maintained service levels throughout the pandemic and continued to invest in our proprietary technology to deploy tailored solutions to quickly address changing client needs. In fact, technology spend is returning to pre-COVID levels” and “Our scale and financial strength, combined with CTM’s personalised service and tailored technology solutions, have translated into new client wins and growing market share globally”.
The company also said that as a result of the continuing uncertainty regarding government travel restrictions and the efficacy of national vaccination programs, it is not in a position to provide earnings guidance for the second half, but it does expect its ANZ and European operations to be profitable during the half, thanks to vaccine rollouts, a lower permanent cost base, and ANZ domestic borders remaining largely open.
Mr Pherous added, “While Australia and New Zealand have not commenced their vaccination programmes, USA and UK are well advanced, with the UK population of 67m having passed 15m vaccinations and the USA with a population of 329m having passed 50m vaccinations, with both countries expecting to have the high-risk segment of the population vaccinated in this quarter, potentially allowing a relaxation in travel restrictions, much earlier than ANZ.
Given 70% of our pre-COVID revenue is derived from the UK and USA, we are well positioned for the incremental revenue gains from travel relaxations in these markets.”
A report by John Alwyn-Jones
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