CTM’s ANZ and North America Drive 1H25 Growth Amid EU Transition

Strong Regional Performances Offset Group-Wide Decline

Corporate Travel Management (ASX: CTD) reported a mixed but strategically encouraging first half of FY25, with underlying EBITDA of $77.4 million, down 23% on the prior corresponding period. Despite this headline decline, the Rest of World (RoW) regions excluding Europe posted a 38% increase in EBITDA, driven by standout performances in Australia and New Zealand (ANZ) and North America.

ANZ delivered an impressive 53% EBITDA growth to $28.5 million, supported by new client wins, returning customers, and the rollout of proprietary technology such as Sleep Space. North America followed closely with a 49% EBITDA increase to $30.5 million, benefiting from rapid adoption of the Lightning OBT platform and ongoing automation through Project Atlas.

Europe’s Transitional Phase and Future Outlook

Europe remains in a transitional phase, winding down one-off war-related projects from FY24 and carrying a larger staff base to support record corporate client wins expected to transact in the second half. While revenue was impacted by reduced UK government travel spend, the region maintained a solid margin of 38.6% and is poised for a strong finish to the year. Notably, CTM secured sole provider status for the UK Government TMC travel services framework starting January 2025, a move expected to positively influence future volumes despite initial uncertainty.

Capital Management and Shareholder Returns

CTM’s balance sheet remains robust, with no debt and $75.5 million in cash as of December 31, 2024. The company returned $52.3 million to shareholders in the half through a combination of share buy-backs and dividends, including an interim unfranked dividend of 10 cents per share. The ongoing on-market buy-back program, reset to $100 million through June 2025, reflects disciplined capital management aimed at enhancing shareholder value.

FY26 Targets Signal Confidence in Growth Trajectory

Looking ahead, CTM previewed FY26 targets that underscore its ambition to double FY24 earnings per share within five years. The company aims for approximately 10% revenue growth and a 30% EBITDA margin, driven by market share expansion, automation, and operational efficiencies. Capital expenditure is expected to be around $40 million, down from $48 million in FY24, reflecting a focus on return on investment and technology-driven productivity.

Management highlighted that the RoW regions remain on track for about 10% revenue growth and a 27.5% EBITDA margin for FY25, implying a 35% EBITDA increase for the full year. North America is anticipated to be the largest contributor to second-half results, supported by continued momentum in client wins and technology adoption.

Challenges and Strategic Focus

While the overall group metrics showed declines, these were largely influenced by transitional dynamics in Europe and lower ticket prices in Asia, which saw a 7% revenue drop. Asia’s focus on automation and expanding corporate accounts in Singapore and Hong Kong aims to stabilize and grow profitability moving forward.

CTM’s Managing Director Jamie Pherous emphasized the company’s commitment to leveraging proprietary technology and disciplined capital management to sustain growth and profitability. The company’s ability to retain 97% of existing clients and secure new client wins with an annualized total transaction value surpassing $880 million as of mid-February 2025 provides a strong foundation for the remainder of the year.