Global business travel management agency Corporate Travel Management (CTM) has reported underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of US$65m for the FY20 financial year. CTM management says the company’s rapid response to the impacts of Covid-19 has helped rationalise the cost base and maintain a strong liquidity position. There was an underlying net profit after tax of $32m.
Stronger corporate activity resulted in smaller than expected underlying EBITDA losses for 4Q20, CTM’s financial statement says, averaging $3m per month and the company reports no debt and an operating cash flow of $79.2m.
However, the deferred FY20 interim dividend was cancelled and there is no final dividend.
The financial report says the business is positioned for recovery: but that it could be profitable on domestic only model.
Managing director Jamie Pherous (pictured) says: “Revenue has been ahead of our May market update expectations with high exposure to domestic essential travel. This coupled with our flexible business model and rapid response to Covid-19 enabled CTM to deliver full-year results that exceeded our market update provided in May.
“Because we moved early and rapidly with redundancies and other cost reductions, we have been able to stem our losses very quickly, and do not expect any further significant one-off costs in the current FY21 financial year.
“Our business model also positions the business for a rapid return to profitability with only a marginal increase in domestic travel activity from current levels.”
Reported Q4 revenue averaged $11.5m per month compared with the May market update of $2-5m per month, as a result of CTM’s high level of exposure to clients in Essential Services industries who have been permitted to travel despite travel restrictions, supporting solid recurring earnings.
Travel restrictions and border closures dramatically reduced travel spend during the second half, with client activity reaching its lowest point in April 2020, CTM reports.
CTM benefited from its leverage to the largest travel markets, with the northern hemisphere representing 81% of Group Q4 revenue. Despite Covid-19, flight schedule activity is increasing in the key regions of North America and Europe.
Non-recurring costs after tax totalled $33.8m and related predominantly to Covid-19, including redundancy costs ($15.1m), bad and doubtful debts ($13m) and amortisation of intangible assets to reflect reduced client demand ($9.1m). No significant further one-off costs are expected in FY21.
As at 17 August, CTM maintains a strong liquidity position with net cash at $55m (net of client cash and client creditors), zero debt and undrawn committed facilities of $180m.