Corporate Travel Management trading update
About the author:
- Author name:
- By Belinda Moore
- Job title:
- Senior Analyst
- Date posted:
- 30 October 2014, 11:27 AM
- Sectors Covered:
- Agriculture, Food & Beverage, Travel and Chemicals
Corporate Travel Management (CTD) has had a strong start to FY15 and already earnings guidance has
been upgraded. FY15 will benefit from record new client wins in
Australia and offshore, the scaling of the US and a full year of the
Westminster Travel acquisition.
In line with CTD's strategy, an
acquisition in Europe is also expected to be made. Hold on for the ride.
AGM: guidance is upgraded; all regions are performing well
- FY15 EBITDA guidance is now expected to be above A$41m (+41.8% on the pcp)
compared to A$38-41m previously
- Management said that it will refine this
guidance further at the 1H15 result. Given the strong momentum across the
business, we believe that new guidance could prove to be conservative. We have
increased our FY15 EBITDA forecast to A$43.4m
- CTD is currently
investigating a number of acquisitions opportunities across the UK/Europe and
the US. An acquisition in UK/Europe is expected to made during FY15. This
position, will allow CTD to compete in regional and global client tenders. The
regional and global client tender pool is worth US$200bn. If CTD can increase
its market share over the next few years, the upside is enormous.
New contract wins see material upgrades to FY16 & FY17
On the back of upgraded guidance, stronger operating conditions in Australia
and New Zealand, large new client wins in the US and a weaker AUD, we have
increased our FY15/16/17 NPAT forecasts by 5.8%/10.2%/10.6%.
Hold for now
We continue to rate this business highly and recommend that investors hold on
for the ride. Morgans clients should login to view our new DCF valuation and price target.
Alternatively, contact your Morgans adviser or nearest Morgans office for more information.
Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.
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