Corporate Travel Management (ASX:CTD): Its management has lot of work to do, just to resume trading

No matter how impressive an underlying thematic of an individual may be, Corporate Travel Management (ASX:CTD) depicts to investors that a company’s financial position does matter.

Shares are suspended from trading and have been since the end of August 2025. The longer things go on, the more worried investors get because they feel it is more and more unlikely this will be resolved well. Even if shares do resume trading, they will inevitably plunge upon the resumption of trading and the reputation will take many months to repair.

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Overview of Corporate Travel Management (ASX:CTD)

The lure of Corporate Travel Management was that it was not just another travel agency. It served as a travel manager focused on business travellers – particularly those that spent 6-7 figures (i.e. hundreds of thousands or millions of dollars) on travel. Customers want to give themselves the best chance of everything going smoothly but having issues (i.e. delays, cancellations or rerouting) resolved.

CTD purports to have a 24/7 service staffed by Australian employees and it helped thousands of customers during Cyclone Alfred alone. Even in good times, it can go above and beyond by pre-checking into hotels or ground transportation. Don’t just think of high-flying executives but even companies with FIFO workforces such as the mining sector.

And the promise is that AI can automate mundane manual tasks to free up time for interaction (i.e. it could check if a customer is a loyalty member of that hotel/airline and automatically sign them up). It could even track carbon emissions for those situations where they need to be sorted.

Always battling the skeptics

CTD has been in business for over 30 years, founded by Queenslander James Pherous in 1994 when he was a 23-year old accountant. CTD expanded over time through organic growth and M&A. …Well, actually, it was mostly the latter. The company was listed on the ASX in 2010.

It has long battled skeptics in the media and the markets, ever since late 2016 when Perpetual portfolio Anthony Aboud declared at the first Sohn Hearts and Minds conference he was shorting it. At that time, the share price had increased by several times (i.e. more than a dozen) since 2010. A further blow came in 2018 when VGI Partners issued a 178-page critique and VGI came back again in early 2020. But the company kept rebutting the shorters. In many ways, it is little different to the debates around WiseTech (ASX:WTC) and DGL (ASX:DGL).

The pandemic was a big blow, but it did not need to raise capital, unlike many of its peers because its contracts with government and business remained. It bought Travel & Transport in September 2020 for $274m and Helloworld’s corporate unit for $175m in 2022. Investors kept asking questions like why it suddenly stopped reporting Total Transaction Volumes, why things were so volatile in Europe.

CTD’s most recent results were its FY24 results, during which it made $716.9m revenue, $201.7m underlying EBITDA and an $84.5m statutory NPAT. What about its FY25 results? Funny investors should ask.

The current standoff

CTD’s FY25 results were due by the end of August, but are still not out. Shares were halted on Friday August 22 when Deloitte announced it would delay the release of the full-year accounts. CTD has tried to persuade investors it is not as bad, but the longer the delay, the more difficult it is to make that case.

Oh, and also the more auditors get involved, the more investors have a right to be suspicious. It replaced PwC with Deloitte and it was the latter that uncovered the current issue. And CTD had to bring in KPMG as a third party to help resolve the situation (in other words, determine whether PwC or Deloitte were right). If you know another ASX company that has had that many (3) auditors get involved in exactly as many months, let’s hear it. And if there is one, what about an ASX 200 company?

But it doesn’t matter who is the auditor. They need to sign off that the accounts give a ‘true and fair view’ of the company’s position and whether or not they think the company can continue as a going concern. And so far, this has not happened. You cannot blame auditors for wanting to be cautious because it is their employees’ careers at stake. Those who assert people will do anything for money are wrong (or at least Big 4 accountants won’t).

Initially, it was believed it wasn’t a big problem – all that would eventuate would be that FY24’s profit would be adjusted up at the expense of this year’s profit as revenues for FY25 were more appropriate to recognise then.

But now it seems this is a broader issue as to when all revenues and costs are recognised, specifically in the European division. And this issue could go back several years. For the lay person, we will state that companies can choose between cash/accural accounting, either recognising revenue when cash flows come in or when a deal is signed that will see cash flows come in down the track. But in the latter scenario, the question is will those cash flows come in?

Not getting much (if anything) right

It is now late October, 2 months since the suspension, and there is no certainty about when shares will resume trading. But there is certainty that if they ever do, there’ll be a massive rush to get out. And even CTD’s PR exercises have fumbled investors.

Last Friday (October 24), it released a quarterly update in which it said it was business as usual, only that revenue was up 6%, underlying EBITDA by 29% and cash balance by 83%. Guidance for the full year was promised at the release of FY25 results…whenever that will be.

Investors wanting running commentary of any kind only had to wait a few hours or so, as there was another announcement to correct the previous announcement. Although the revenue and EBITDA figures were right (as well as the percentage gain), the company overstated the numerical movements. Revenue was $9.9m higher rather than $13.2m, and EBITDA was only up $9.2m instead of $12.5m. Yes, investors needed only look for themselves at the first announcement to determine it was wrong, but correcting it so soon was embarrassing.

Investors were promised an update during November’ without being specific as to the timing. So perhaps we could see an update as early as this Monday, or perhaps up to 4 weeks from now.

Conclusion

It is too early to say,’ All over Red Rover’, just yet. But it could be an ugly drop if/when shares resume trading. And regaining investor confidence could take many, many months. Some may think it’ll be a buying opportunity when it resumes trading…whether you agree with that or not, let’s just remind everyone that you cannot buy CTD as long as it is suspended.