The collapse of UK travel company, Thomas Cook after 178 years in business will leave an impact across every part of the global holiday and business travel businesses, with costs estimated to easily top $A2 billion.
In a recent post here, we explored the Online Travel Agent (OTA) space and came away with a view that barriers to entry in the industry were arguably low, which went a fair way to explaining why there are so many agencies already in existence. It appears that this piece was unknowingly well-timed.
Corporate Travel Management (CTD) is in a sweet spot, substantially expanding its offshore platform to deliver growth that was above expectations in FY15. Having built a global network the business is now poised to win larger clients.
Corporate Travel Management (ASX: CTD) has discovered a profitable niche in the Australian corporate market, and has grown its Total Transaction Value (TTV) from $316 million to $1.44 billion in five years. To continue this growth, it will need to take on the “mega” travel agencies, but is there room at the top?
While acknowledging the headwinds from a stronger Australian dollar, Morgan Stanley is confident in an upgrade to guidance in FY18 as the company’s trading multiple, admittedly demanding at times, has de-rated.
Corporate Travel’s result missed the broker but met consensus, and beat guidance. It was another year of strong revenue, the broker notes, thanks to client wins, better margins thanks to efficiencies, and significant contributions from acquisitions.
Morgan Stanley expects Corporate Travel to deliver on its FY16 and FY17 forecasts. FY16 guidance has been reiterated at the same time other travel names were guiding the market lower. The broker expects new contract wins and a lower Australian dollar should provide upside into FY17.