What: Business travel services provider Corporate Travel Management Ltd (ASX: CTD) delivered some spectacular full-year results this morning as revenue and underlying profit jumped 42% and 41% respectively.
Total transaction value was $1.38 billion up 57% on the prior year and a final dividend of 7.5 cents per share was declared. The full-year payout of 12 cents per share is up 1.5 cents on the prior year.
What now: Shares have roughly tripled in value over the last two years but the company may only be at the beginning of its growth runway given its international expansion plans and successful track record.
This year every operating region experienced record profits and all acquisitions saw organic profit growth. The business now has operations in 37 cities across 15 countries and appears to be in the middle of a growth sweet spot.
Apart from through acquisitions of smaller travel businesses, Corporate Travel grows business by attracting new corporate clients to its cost-saving travel services. In organising travel on behalf of big and small business clients it saves them money while taking a fee for itself. The founder-driven business also has a strong focus on using technology and social media to promote itself and its operational capabilities.
What of the outlook: Talk of the next Flight Centre Travel Group Ltd (ASX: FLT) may not seem so preposterous with Corporate Travel forecasting underlying earnings growth in the region of 32%-42% in FY15, excluding the potential benefits of any new acquisitions.
At $7.35 the group trades on 38.7 times 2014's statutory earnings per share of 19 cents and has confirmed FY15 is so far tracking to guidance.
As referenced before; in my opinion this business remains a strong buy.
