CTD’s Strong Half-Year Results Highlight Risks in Asia and European Transition

Strong Half-Year Financial Performance

Corporate Travel Management Limited (ASX: CTD) has unveiled a robust set of half-year results for the six months ending 31 December 2024, underscoring its strategic execution and operational resilience. The company reported an underlying EBITDA of $77.4 million, marking a 23% increase on the prior corresponding period, alongside revenue growth of 8% to $342.8 million. These figures reflect a steady recovery and expansion in the corporate travel sector amid evolving market dynamics.

Despite a one-off project impacting the year, CTD maintained a solid EBITDA margin of 23%, supported by disciplined cost management and productivity gains driven by automation and proprietary technology investments such as Sleep Space and Project Atlas.

Regional Highlights and Strategic Execution

The Rest of World (RoW) segment, encompassing Australia, New Zealand, North America, and Asia, was a standout performer with EBITDA surging 38% and margin expansion from 18% to 23%. ANZ and North America regions delivered particularly strong EBITDA growth of 53% and 49% respectively, buoyed by new client wins, returning customers, and increased adoption of CTD’s technology platforms.

Asia faced headwinds from price deflation and residual COVID-19 impacts, resulting in a 7% revenue decline and a 15% drop in EBITDA. However, transaction volumes grew 11%, indicating underlying demand strength and a stabilizing pricing environment.

Europe remains in a transition phase, moving away from one-off government projects towards steady business-as-usual growth. The company secured sole provider status for the UK Government’s Travel Management Services framework, a significant contract win expected to drive strong corporate client growth in the second half of FY25 and beyond.

Capital Management and Shareholder Returns

CTD’s capital management strategy continues to impress, with $52.3 million returned to shareholders in 1H25 through dividends and share buybacks. The company repurchased 4.4 million shares for $59 million, reducing shares on issue to 141.9 million and demonstrating confidence in its medium-term outlook despite current share price weakness.

CTD remains debt-free with a healthy cash balance of $75.5 million and an unused $100 million debt facility, providing ample financial flexibility. Capital expenditure was disciplined at approximately $20 million, focused on technology investments that drive long-term ROI.

Outlook and Growth Targets

Looking ahead, CTD reaffirmed its FY25 targets, aiming for approximately 10% revenue growth and an EBITDA margin of around 27.5%, with a continued focus on automation and productivity enhancements. The company also provided indicative FY26 targets, projecting sustained revenue growth near 10% and further margin expansion to about 30%, supported by a $40 million capex budget.

Management highlighted the ongoing global rollout of Sleep Space and the expected strong rebound in Asia during the second half of FY25. The European transition is anticipated to complete in FY26, contributing significantly to group growth.

CTD’s executive leadership team, led by Managing Director Jamie Pherous and Global CFO James Spence, remains committed to doubling FY24 EPS within five years, underpinned by strategic client wins, technology adoption, and disciplined capital allocation.