In morning trade the Corporate Travel Management Ltd (ASX: CTD) share price has edged lower following the release of its full year results.
At the time of writing the corporate travel specialist's shares are down 2% to $20.17.
What happened in FY 2019?
For the 12 months ended June 30, Corporate Travel Management reported a 30% increase in total transaction value (TTV) to $6.46 billion. This was driven by market share gains in all regions that the company operates in.
Revenue came in 20% higher than the previous year at $446.7 million and underlying EBITDA also came in 20% higher at $150.1 million. The latter was at the top end of its guidance range. Statutory net profit after tax increased 12% to $86.2million.
And one key metric that everybody will have been looking out for was its cash flow conversion rate. The company recorded an operating cash flow conversion rate of 113% thanks to the timing of payment cycles against the reporting period.
This allowed the company's board to declare a final partially franked dividend of 22 cents per share, taking the full year payment to 40 cents per share. This was an increase of 11% on FY 2018's dividend.
What were the drivers of this result?
Whilst all segments delivered growth, the key driver of its TTV growth in FY 2019 was the Asia segment. It delivered a 70% increase in TTV to $2,519 million, making it Corporate Travel Management's biggest contributor to TTV with 39% of total TTV. Segment underlying EBITDA rose 27% to $24.7 million.
In North America the company saw its TTV rise 12% to $1,459.1 million and underlying EBITDA increase 15% to $43.5 million.
The ANZ segment was a positive performer again. It delivered a 16% increase in TTV to $1,335.5 million and a 17% rise in underlying EBITDA to $51.5 million.
Finally, the Europe segment was also on form, recording a 13% rise in TTV to $1,143.9 million and a 20% increase in underlying EBITDA to $40.9 million.
Outlook.
Corporate Travel Management's CEO, Jamie Pherous, was cautiously optimistic on the company's outlook.
He provided full year FY 2020 guidance for underlying EBITDA of between $165 million and $175 million excluding the impact of the new accounting standards. This equates to year on year growth of between 10% and 16.6%.
Mr Pherous said: "We recognise the volatility in the global market, and we have stress-tested our forward trading activity accordingly. The lower end of our guidance assumes there is a continuation of the current trading environment as a result of Brexit, the US-China trade tensions and the demonstrations in Hong Kong through to the end of the calendar year."
"An earlier resolution to any or all of these events will likely result in increased confidence and client activity above our low-end assumptions," he added.
Elsewhere in the industry today, the Helloworld Travel Ltd (ASX: HLO) share price has climbed 3.5% following the release of its full year results. Helloworld reported a 23.8% increase in profit after tax to $38.2 million.
Fellow travel companies Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB) are scheduled to release their results on Thursday.
