Aussie travel company accused of running “phantom” offices

Aussie travel company accused of running “phantom” offices

A hedge fund has accused Corporate Travel Management (CTM) of running “phantom” offices among an alleged 20 other “red flags”.

The scathing 176-page presentation given by VGI Partners reports declining cash flows, despite claims of strong organic growth, overstating its global footprint and aggressive accounting, according to Fairfax.

“Some of the red flags, viewed in isolation, may be of no concern and others may be individually explainable. However, we believe in aggregate they paint a troubling picture,” the hedge fund said.

CTM announced on the ASX it would be placed in a trading halt, pending the release of an announcement or until Wednesday 31st October, the day of its annual general meeting.

VGI said it visited CTM offices in Glasgow, Paris, Amsterdam, Stockholm and Switzerland and found no signs of activity.

The US offices were also empty or staffed with a skeleton crew, even though the US makes up one-third of CTM revenues.

The hedge fund claims their analysis is at odds with the “rich valuation that the market currently places on Corporate Travel”.

VGI said CTM’s price to earnings multiple was well above similar companies, at 28.6 times, compared to Flight Centre’s 15.8.

In fact, their metrics even exceeded the likes of Amazon and Apple, according to VGI.

“Is Corporate Travel the next FAANG (Facebook, Apple, Amazon, Netflix and Google) stock?,” VGI said.

CTM said they were made aware of the report on Sunday afternoon and “took the claims seriously and we look forward to providing a detailed response as quickly as possible”.

Travel Weekly has reached out to CTM for comment but has yet to receive a reply.

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