Corporate Travel rides wave of UK contract to keep earnings afloat
The United Kingdom’s asylum seeker crisis has kept buoyant Corporate Travel Management’s earnings, as the travel agent banked “significantly larger” revenue from its European division to offset weakness back home.
Amid growing anger over the £1.6 billion ($3 billion) cost of a contract awarded to the Australian travel company to provide temporary housing on large vessels for those deemed to have arrived in the UK “illegally”, CTM said its earnings would be boosted by European earnings.
Corporate Travel Management boss Jamie Pherous. Attila Csaszar
CTM said it now expected to book between $165 million and $170 million in profit for the 12 months to June 30, after its underlying earnings before interest, tax, depreciation and amortisation more than doubled from the first half’s $51.3 million to between $113.7 million and $118.7 million.
It had previously guided profit to hit $160 million to $180 million.
While CTM said this indicated “strong momentum going into financial year 2024”, RBC Capital Markets analyst Wei-Weng Chen said the result was materially weaker for Australia and New Zealand.
“Europe is clearly significantly larger than the market is expecting (more than 50 per cent or $30 million larger in financial year 2023), which is materially positive,” Mr Chen said.
“However, where we previously saw the European opportunity as incremental upside to financial year 2024 guidance, we now see this as largely plugging a large, somewhat unexplained, earnings hole in ANZ.”
CTM said European EBITDA was more than double 2019 levels after it won an £800 million a year bridging accommodation and travel services contract from the UK Home Office to find temporary accommodation for asylum seekers caught up in its changing
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