Ann: Change of Director's Interest Notice, page-39

After watching from the sidelines for a while I am back in too.
Not sure why so many posters on here are saying CTD is following the rest of the travel stocks. None have fallen as hard as CTD. CTD is the odd one out making fresh 52 week lows on very large volumes. This is concerning as this sort of movement is often followed by bad news out of the company.
Having said that, the SP movement could just be a result of investment houses reducing positions as they believe a recession will lead to lower business travel spend.
I have entered assuming the fall in SP is associated with the latter. CTD has already had short reports published on it and these have been debunked by management so I can't see something really rotten coming out of the company. Another thing that concerns me about travel agents is whether they are a necessity i.e. will airlines keep paying them a commission. I have comforted myself with the fact that CTD has been making a commission for many years so why would this end now. Even so, this is the biggest concern I have - commission margins dropping.

AGM guides to EBITDA 143m, PBT 102m and NPAT (assuming 30% tax rate) of 71.4m 'as a starting point'. Assuming CTD can hit these numbers (according to the commentary this is implied to be the base case), it is currently trading a PE of 30 for FY23. There should be a considerable increase in earnings in FY24. Management is guiding to almost double EBITDA . Even if EBITDA increases by half the amount management is guiding to, CTD is currently trading at a PE of 20 for FY24. For a company that has a track record of growing EPS high single/ low double digits, a PE of 20 is good value.


Split in earnings expected to be 30%1H, 70%2H. So for 1H ending 31 December I am looking for a NPAT around $24m.