This ASX top stock set a goal of doubling FY24 Earnings per share in five years. Its strategy of a continued strong discipline in capital management being a key focus, it has reported that all metrics were on track.
Corporate Travel Management Ltd (ASX: CTD)
Corporate Travel Management Ltd (ASX: CTD) delivered a robust performance over the past twelve months, providing a solid foundation for future growth across its key regions. FY24 saw a 9% revenue increase, translating into a substantial 21% uplift in underlying EBITDA, underscoring the effectiveness of CTM’s focused investment in technology, service improvements, and productivity initiatives. Impressively, CTM converted 61% of incremental revenue directly into EBITDA, reinforcing the efficiency and impact of its strategic approach.
Regional performance was particularly strong in North America and ANZ, where EBITDA rose 39% in the second half compared to the prior year, reflecting notable momentum through Q4 that has continued into early FY25. This achievement comes despite some headwinds. Specifically, policy changes in the UK impacted the Bridging Accommodation contract, reducing anticipated revenues. Additionally, UK humanitarian projects related to Ukraine, Afghanistan, and the Middle East concluded faster than expected in Q4, which contributed to a modest adjustment in CTM’s FY24 outlook during its first-half results. CTM’s commitment to sustainable revenue growth was evident through the reorganization of sales teams across all regions, aiming at a double-digit growth target. The company secured substantial new client wins, with an estimated annual transaction value of $970 million, while retaining 97% of its existing clients. CTM has set a target to double its earnings per share over the next five years, anchored by strategic initiatives aimed at long-term gains.
Key initiatives include Sleep Space, a proprietary hotel content platform that enhances customer and supplier engagement, improving revenue yield. Project Atlas focuses on back-end standardization and automation, with projected cost savings of $10 million in FY25, increasing to $20 million annually by FY29. Project Scout, another significant project, is automating thousands of previously manual, low-value tasks, enabling consultants to focus on more complex customer needs. These projects have already contributed to higher customer satisfaction scores and are expected to drive further improvements in productivity and client experience over time. CTM’s capital position remains robust, with $134.8 million in cash, no debt, and $100 million in committed facilities maturing in July 2025. The company returned $68.3 million to shareholders through dividends and share buybacks during FY24, reflecting a solid capital return policy. In FY24, CTM declared a final dividend of 12 cents per share, bringing total dividends for the year to 29 cents per share (unfranked), representing 50% of the Group’s net profit attributable to shareholders.
CTM’s results affirm the positive impact of its technology-driven strategy and ongoing investments in productivity. While external challenges persist, particularly in the UK, the company’s proactive adaptations and innovative solutions position it well to capture future growth and deliver consistent returns to shareholders.
Source: Company’s Report
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