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.
Trade wars, Brexit and the Hong Kong protests made for a particularly tough first half for Corporate Travel Management, but there are signs of life returning in the second half. The company has reiterated FY guidance and Morgans assumes modest first-half earnings growth followed by double-digit growth in the second half as macro headwinds gradually ease.
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.