MENU

Corporate Travel Management Ltd (ASX:CTD) delivers more impressive growth

Hot on the heels of the Helloworld Travel Ltd (ASX: HLO) result yesterday, corporate travel specialist Corporate Travel Management Ltd (ASX: CTD) released its full-year results on Wednesday.

Although the Corporate Travel Management share price only edged higher, don’t let that fool you into thinking this was a soft result. The fast-growing company certainly didn’t disappoint in FY 2018 and delivered yet another stellar result.

For the 12 months ended June 30, Corporate Travel Management achieved total transaction value growth of 19% to $4,958.3 million, revenue growth of 14% to $372.2 million, and underlying net profit after tax (excluding acquisition amortisation) growth of 34% to $86 million. The latter came in 29% higher year-on-year on a per share basis at 81.1 cents.

The board declared a final dividend of 21 cents per share, bringing its full year dividend to 36 cents per share.

The result was driven by strong performances from all regions, not least in Europe where revenue grew 61% and EBITDA increased 80%. As shown below, this was supported by another solid performance from the ANZ region. While revenues declined in Asia, improvements in its margins led to solid EBITDA growth.

Source: Company presentation

Managing director Jamie Pherous believes that this demonstrates that its business model and strategic investment decisions are working well. He added that: “These results support the strategy that we have taken to build a global network and apply the CTM business model around winning and retaining customers, driving internal automation and client innovation and ensuring high staff engagement and client satisfaction.”

As well as benefiting from acquisitions, Corporate Travel Management achieved solid organic profit growth of approximately $18.9 million in FY 2018. This equates to approximately 70% of its profit growth during the year. Management put this down to the company’s ability to win multinational clients who have recognised its international capabilities.

Outlook.

In FY 2019 management expects the company to generate underlying EBITDA in the range of $144 million to $150 million, representing year-on-year growth of approximately 15% and 20%.

This guidance is based on the Australian dollar trading at an average of 76 U.S. cents, HK$6, and 56 British pence during the 12 months.

Should you invest?

I think this result demonstrated why Corporate Travel Management is regarded as one of the best growth shares on the local market.

While its shares are expensive at 38x earnings, I feel the company is capable of growing earnings at a strong enough rate over the coming years to justify this premium.

However, my top pick in the industry remains Webjet Limited (ASX: WEB), which is scheduled to report its results tomorrow. I’m expecting another strong result from the online travel agent.

Finally, here are three more top buy rated shares that have been delivering strong growth this year.

The Disruptors: 3 Revolutionary Aussie Companies to Back for 2018

We’re living in one of the most exciting times in investing history. Innovation and a booming culture of entrepreneurship are constantly creating new companies with the potential to make forward-thinking investors very rich. Now more than ever, one small, smart investment could make a huge difference to your wealth.

That’s why at The Motley Fool we’ve been scrutinizing the ASX to uncover the kinds of companies that we believe could turn into the next Atlassian.

We’ve found three exciting companies that we believe re poised to perform in the new year. Click here to uncover these ideas!

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool Australia owns shares of Helloworld Limited. The Motley Fool Australia has recommended Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!