Will The Corporate Travel (ASX:CTD) Share Price Soar On The FY19 Report?

The Corporate Travel Management Ltd (ASX: CTD) share price could be a big mover today after reporting its FY19 result.

Corporate Travel Management is a provider of travel management solutions to the corporate market. They pride themselves on personalised service excellence and client-facing technology solutions, and these traits have helped them to win AFTA’s award for Australia’s Best Corporate Travel Management Company twelve times. They are currently operating throughout Australia, New Zealand, North America, Europe and Asia.

Corporate Travel’s FY19 Result

Corporate Travel reported that its total transaction value (TTV) increased by 30% to $6.46 billion. The biggest driver of the result was a 70% increase of TTV in Asia to $2.52 billion.

Revenue also grew by a solid 20% to $446.7 million. Again, Asia was a driver of the result with Asian revenue increasing by 49% to $80.4 million. North American revenue also grew by 18% to $149.3 million.

Underlying EBITDA (click here to learn what EBITDA means) also rose by 20% to $150.1 million. Corporate Travel said this was at the top end of its guidance.

The travel company revealed that statutory net profit after tax (NPAT) for shareholders grew by 12% to $86.2 million. The market consensus was for net profit to come in at $102.4 million, so it appears to have undershot the expectations by a sizeable amount,

Corporate Travel blamed Brexit, the tensions from the China – US trade war and the demonstrations in Hong Kong for the slowdown. Even so, Corporate Travel was able to increase its market share.

Corporate Travel Dividend

The Corporate Travel Board decided to declare a 50% franked final dividend of 22 cents per share, bringing the total dividend to 40 cents per share for the year, up 11%.

Is The Corporate Travel Share Price A Buy?

The business continues to grow profit year after year. It has guided for underlying EBITDA to be between $165 million to $175 million, excluding the new accounting changes. This would be growth of around 10% to 16.6%.

Continuous growth is an attractive feature of a long term growth share, but I’m not sure what the right price is to pay for Corporate Travel, particularly if it’s volatile today.

For my portfolio I’d rather think about buying shares of the reliable businesses in the free report below instead.

At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.

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