Contributing Members
Content is delayed by one month. Upgrade your membership to unlock all content. Click for membership options.
#ASX Announcements
Added a month ago

CTD reported today.

Share price has been smashed - down 18% at time of writing.

Result was a bit disappointing but the correction is overdone in my view.

The background here is that CTD grew very strongly until COVID hit and the travel industry got hit hard. CTD made a big US acquisition at that time, which good companies do when competitors struggle. CTD were able to do that because they had such a strong run leading up to COVID.

Of course, their results in COVID got hit and they are still recovering.

The share price correction is a reaction to the results not returning as quickly as the market would like.

1H24 result

  • revenue was +25%
  • Underlying EPS +160%

As you can see these are strong numbers.

Full year result has been downgraded for the following reasons

  • UK migration contract not delivering expected revenue
  • US market revenue constrained by continuing hire air fares which have now reduced by 20%

Full year underlying NPAT is being revised down to $125-$140M. FY23 was $92M.

So we are still talking full year result of +30% for a company on current P/E of 28. Forward P/E will be about 19.

Looking at it another way. Full year result will take EPS back to 2019 levels when the share price varied from $19 - $33. At time of writing it is $16.

Read More
#Industry/competitors
Last edited 5 months ago

Had an interesting meeting yesterday where this came up - not a company I know much about at all but there were some strong views. Not sure if this is common knowledge or not - nor have i quantified it by actually looking at CTD.

From what I understand most of their most lucrative contracts and profits has come from government contracts. Think the repatriation flights from Israel currently (coordinating Qatar/Qantas/Emirates for Australian citizens) and the ongoing work in transporting and housing refugees to the UK - Fallout looms for Corporate Travel over Bibby Stockholm UK asylum barge contract (afr.com)

Essentially a reason they did so well during COVID and avoided a cap raise (unlike FLT and WEB) was not the narrative they did essential business travel - it was all the COVID repatriation flights that they must make massive margins on (though not disclosed for obvious reasons).

In short the narrative for this stock I think has been wrong for years - the government repatriation and other special flights are a big driver of profits - not typical business travel. This is not what they told the market of course.

Explains the empty locations and discrepancy in the financials form what they say they do that was in the short report years ago etc. As long as you think these government contracts continue then profit should continue but don't think the big driver is business travel.

Read More
#Financials
Added a month ago

CTD was smashed on Thursday after releasing half year results.

Full year results were expected to double NPAT. Announced on Thursday that full year expected to be $40m less due to weaker December and a UK contract that didn’t yield expected revenue (I think the UK is a bit of a basket case atm for a few co’s).

Reported January showed more promise.

For a still growing company paying a dividend, a forward PE of under 20 and a chart that looks like this (taking into account COVID)8af74e27f4692f8db755bb1c32d03914b0b722.jpeg, I think it’s worth a look

Read More
Valuation of $21.00
stale
Added 12 months ago

Valuation is hard. At $21.60 the P/E is 92! However, forecast PBTA is $120-140 before the big contract announced. Let's ignore that since not long before EOY. A PBTA of $120-140 compares to last years ttm NPAT of about $30m. How big is the jump in profit? Depends on how much tax and amortisation they have.

I'm going to punt with $21 (just below the current share price) since surely NPAT will double from $30m to $60m bringing the P/E down to a more reasonable (but not cheap) 46. BUT there is high degree of uncertainty.

Read More
Valuation of $31.00
stale
Added 5 years ago
Refer my notes "BULL CASE" but in essence this is a valuation buy as I feel the s/p has been oversold. However, there remains uncertainty therefore suggest the August 21st report is watched carefully.
Read More
Valuation of $25.00
stale
Added 6 years ago
Applying a lower EBITDA multiple to reflect cyclicacilty of the earnings to general economic activity.
Read More