Corporate Travel shares dive on FY25 earnings warning
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The news: Corporate Travel Management (CTM) was one of the worst performing ASX 200 companies in morning trade after forecasting a drop in earnings for the first half of the 2025 financial year having completed non-recurring projects in Europe.
The numbers: CTM shares lowered 6.5% to $11.70 by 11:30am AEST.
Underlying net profit after tax rose 22% year on year to $113.3 million, but fell short of its guidance range of $125 million to $140 million, and consensus forecasts of $125.7 million.
Full-year revenue was up 9% to $710 million but failed to meet guidance of between $730 million and $760 million, or average estimates of $746.7 million. EBITDA of $201.7 million rose 21% but failed to meet its guidance range of $210 million to $230 million or consensus projections of $215.4 million.
Final dividend per share of 12 cents was up 4% compared to a year ago, but short of average expectations of 23 cents.
CTM said it is targeting 10% revenue growth and 23% to 27% EBITDA margins growth in North America, Asia, and Australia and New Zealand in FY25. However it forecasts an 18% revenue decline and 49% EBITDA margins fall in Europe as non-recurring projects complete, driving a year-on-year downturn in group earnings.
The context: The Brisbane-headquartered group organises trips for business clients and provides accommodation for displaced persons.
It said the growth in revenue and earnings fell short of forecasts due to macro impacts in North America, a $1.5 billion contract in Europe falling "materially below forecast" due to changes in government policy, and one-off war-related humanitarian projects tapering off faster than expected in the second half.
What they said: "Another miss and there will likely be questions as to why this wasn't pre-announced given magnitude of NPAT miss and downgrade to FY25," Jarden analysts said.
"We expect shares to be weak today with a focus on what the underlying earnings base is and ability to monetise the $970 million of contract wins in FY24."
The sources: ASX announcement, Jarden research
