Travel Agents

CTM says latest attack from VGI shows “misunderstanding” of corporate travel sector

Corporate Travel Managers has responded to a second attack from VGI Partners, who last week published an extensive report on the company, raising many “red flags”.

The embattled travel management company reiterated VGI’s substantial short position in CTM, meaning that it can only profit from its investment if there is a decline in CTM’s share price.

“VGI has significant vested interest in promoting market uncertainty with respect to CTM and in refusing to accept CTM’s comprehensive rebuttal of the claims made by VGI in relation to its business model, governance and finance reporting,” CTM said via a statement on the ASX.

“Page 50 of the recent VGI report states that ‘… the information contained in it is inherently biased towards VGI’s short position in Corporate Travel.'”

VGI’s initial report, which raised questions about the company’s accounts and the true scale of their business, saw CTM’s share price tumble by 27 per cent.

On Monday, VGI told its investors CTM’s detailed response to their report did not adequately address many of their concerns.

“Every one of the 20 red flags in our previous presentation continues to concern us,” VGI said.

“After carefully considering the company’s response, we have increased our short position.”

For those not familiar, short selling involves betting a company’s share price will fall below a certain price.

CTM said VGI’s conclusions lack a fundamental understanding of the corporate travel sector and CTM’s business model.

“CTM’s view is that VGI’s latest report raises no new substantive issues,” the company said.

“CTM’s response to VGI’s original report addressed all claims by VGI. CTM refers shareholders to its initial response and sees no need to comment further on many of the points on VGI’s latest report.”

VGI’s initial report raised concerns about “phantom offices” and “aggressive accounting”.

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.

SEE WHAT PEOPLE ARE SAYING

Leave a Reply

Tourism

Flavour of the Week: RCL’s big restructure, Celebrity Cruises’ historic all-female team + MORE!

There are three things that matter most on a Friday: Flavour of the Week, industry gossip and a few bottles of rosé. Two of those come standard, but we suggest drinking the other while reading this.

Share

CommentComments

Aviation

Aussie and Kiwi couple tie the knot on Jetstar flight

An Australian man and a Kiwi woman have made a very unique compromise for their wedding location, tying the knot on a plane in between the two countries.

Share

CommentComments

Tourism

“Come live our cataustrophy”: The Chaser boys roast Tourism Australia campaign with hilarious parody ad

by Christian Fleetwood

Primetime piss-takers The Chaser have been at it again, this time taking aim at Tourism Australia’s controversial ‘Philausophy’ campaign.

Share

CommentComments

Cruise

“The ultimate aquadisiac”: Dream Cruises unveils saucy new entertainment

Yes, the word ‘aquadisiac’ was used and it just about made our whole week. Find out what all the fuss is about here.

Share

CommentComments

Travel Agents

Travellers Choice CEO says Tempo/Bentours collapse “the one blight” in a great year

by Christian Fleetwood

Christian Hunter has revealed just how much Travellers Choice and its customers were impacted by the tragic collapse of Tempo Holidays and Bentours.

Share

CommentComments

Technology

Airbnb inks massive Olympic deal

Did you happen to catch members of the hotel industry kicking cans down the street and muttering curse words to themselves? Find out why here.

Share

CommentComments

Travel Agents

Agent Wrap: Travellers Choice award winners, agents cruise Croatia, MTA conference speaker + MORE!

Congrats, folks – you made it to Friday! As a reward, here’s an extra-long Agent Wrap for you to peruse before knock-off drinks.

Share

CommentComments

Aviation

Businessman caught attempting aircraft pilot con

Ever watched ‘Catch Me If You Can’ with Leonardo DiCaprio and Tom Hanks? Well, this story has all the hallmarks of the Hollywood flick.

Share

CommentComments

Tourism

ONE WEEK TO GO: Last tickets for The Travel Awards!

Meanwhile, Travel Weekly’s editor is still tossing up whether to wear fur or feathers to the industry’s night of nights.

Share

CommentComments

Destinations

How a Swedish holiday island cut its emissions by 78 per cent

With small changes in energy production, heating, fuel and food, this island became carbon-neutral in less than 12 months – without skimping on the experience it offers visitors.

Share

CommentComments

Hotels

Industry bodies slam Sydney’s Star Casino Ritz-Carlton rejection

The Independent Planning Commission has rejected plans for a $530 million six-star hotel, and these industry players are not impressed.

Share

CommentComments

Destinations

STUDY: World’s riskiest destinations top most Aussie travellers’ wish lists

Australians are prepared to accept the risk and bypass Smartraveller ratings, according to this alarming new research.

Share

CommentComments