The Corporate Travel Management Ltd (ASX: CTD) share price is bouncing between red and green today.
Shares in the travel management solution provider are reacting indecisively in the early hours following a guidance update. At the time of writing, the Corporate Travel share price is up 1.57% to $20.05. However, it opened 5.4% higher before reverting to a 2.7% fall.
Here’s a look at what the market is having a hard time making sense of today.
Second half travel bonanza
Corporate Travel Management has painted a rosy outlook today, providing strong guidance for the company’s full-year FY2023 results.
According to the release, the company’s earnings before interest, tax, depreciation, and amortisation (EBITDA) for FY23 are forecast to land between $165 million and $170 million. The fuel behind this guidance is an expected more than doubling in underlying EBITDA in the second half compared to the first.
The EBITDA range for the second half spans $113.7 million to $118.7 million. In quantifiable terms, this would represent an increase of 122% to 131% on the prior half-year result of $51.3 million in underlying EBITDA.
Additionally, the update pointed out strong momentum heading into the new financial year. For example, revenue in the fourth quarter surpassed 90% of the revenue achieved in FY19. At the same time, the company has retained 97% of its clients.
Other highlights outlined by Corporate Travel Management include:
- Averaging $16.5 million per month in profits before tax since February 2023
- EBITDA margin of 31.5% in the second half
- $2.95 billion of annualised new client wins in FY23
The company’s positive update follows similar statements from fellow travel shares, Flight Centre Travel Group Ltd (ASX: FLT) and Qantas Airways Limited (ASX: QAN).
Last week, Flight Centre upped its underlying EBITDA guidance by 7.1% at the midpoints. The travel agent stated that FY23 is poised to set a new record for global corporate total transaction value — slated to reach $11 billion.
Likewise, Qantas said “demand remains strong with consumers continuing to prioritise travel” in its industry update.
What’s next for the Corporate Travel share price?
Today’s guidance update is a precursor to the company’s upcoming full-year results. Now heading into ASX reporting season, shareholders can expect to see the official numbers soon.
Today’s release states the travel management company will dish out its results on 23 August 2023. In addition, investors will see what FY24 could look like as management provides the company’s outlook.
The Corporate Travel Management share price is up 35% year-to-date. For context, the S&P/ASX 200 Index (ASX: XJO) has rallied a lesser 8.05% over the same period.
