The Corporate Travel Management Ltd (ASX: CTD) share price has raced higher this afternoon following the release of a trading update ahead of its annual general meeting.
At the time of writing its shares are up 5.5% to $18.96.
How is Corporate Travel Management performing?
According to the release, as the corporate travel specialist expected, trading conditions have been challenging in FY 2020.
However, the company has been able to defy this by successfully executing its strategy. As a result, managing director Jamie Pherous has reaffirmed its full year underlying EBITDA guidance.
Corporate Travel Management expects to deliver underlying EBITDA of between $165 million and $175 million in FY 2020. This represents growth of approximately 10% to 16.5% on the prior year.
Though, it is worth noting that it is another company expecting a stronger second half to do a lot of the heavy lifting.
The reason for this is historically the second half is the strongest of the two halves. Furthermore, this year it expects the second half to be stronger than normal due to an improvement in macroeconomic factors in Europe and Asia.
In addition, the company is cycling a strong first half of FY 2019. Whereas the second half will see it cycle a very weak comparable period. This is particularly the case during March and June.
How are its segments performing?
The ANZ segment is performing well thanks to the combination of new client wins and momentum from wins in the prior financial year. As a result, another solid half year result is expected from the segment.
Things haven't been quite so good for the Asia segment. Due to largely to the Hong Kong protests, client activity is down financial year to date. But management appears confident it can deliver growth over the full year.
Over in Europe its business has performed well in challenging conditions. This has been driven by strong execution, record client wins, cost management, and diversity in its client portfolio. It expects EBITDA growth from the segment in the first half.
The United States segment is expected to deliver a slight decline in EBITDA during the first half. However, a stronger second half is expected due to client wins from technology and a planned reduction in costs.
Managing director Jamie Pherous said: "It is of no surprise that the macro environment is challenging and we indicated in August we expected this to be the case. In the face of this, our management continues to execute our strategy which pleasingly enables me to affirm guidance."
