CTD had a number of misses in terms of results, and then you add the European contract (which was a one off) seemingly rolling off, the UK deal perhaps under jeopardy (given change in govt) and on top of that you have a number of other companies in the travel sector signaling weakness in their results and market (Flight Centre and Webjet)........all of this is impacting sentiment and although CTM is not exactly in that retail sector, it still is being impacted (lower airline flight costs means lower turnover and hence lower fees for CTM).
Added to that is that China & Europe is still very much in the doldrums and you have a decent chunk of their market where things are not back to pre covid levels.
The biggest risk here is that Jamie is too confident of things bouncing back (as he was for 1H24 and 2H24) and the market bakes that into the price, and it disappoints.
If I do the maths on their 2025 forecast (ROW grows 10% and margin improves; Europe falls 18% and margin compresses) then we get a FY25 underlying EBITDA of ~210m which is not very different from the ~201m for FY2024......well maybe a 5% improvement.
So looking at the statutory EPS of ~58c, you get a PE of ~20 and on underlying EPS of ~78c you get a PE of ~15 (historical or future earning the same given not a significant change).
Not expensive at the current level, but also not cheap given the growth in ROW is going to offset the one-off projects in Europe where they seemed to have made outsized profits.
CTD Price at posting:
$11.70 Sentiment: Hold Disclosure: Held
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