Corporate Travel hired for Israel evacuation work

Corporate Travel chairman Ewen Crouch said asylum seekers had freedom of movement and their accommodation was audited, and Mr Pherous said it represented only a small portion of Corporate Travel’s $3.2 billion refugee program in the UK.

“We’re really comfortable with what we’re doing,” he said.

Corporate Travel also announced a $100 million share buyback on Wednesday, indicating a lower appetite for acquisitions for a company that forged its strategy buying smaller travel operators.

Mr Pherous said acquisitions were not a priority, with some potential targets having stocked up on debt during the pandemic. “It would be more like a turnaround job than an acquisition,” he said.

Mr Crouch did not rule out more such buybacks. He also said the use of a buyback reflected a divergence on views about capital management, given the company’s dividends often lacked the benefits of franking, and the board’s view the stock seemed “cheap”.

Corporate Travel shares rose 3.2 per cent to $17 on Wednesday, but the stock continues to see-saw, having been above $26 in April last year.

“Let the results speak for themselves,” Mr Pherous said, about market watchers who challenge the company’s accounting. He said their concerns were “invalid”.

Corporate Travel reported a statutory profit of $77.6 million last financial year, up from $3.1 million. It is on track to achieve the mid-point of full-year guidance for underlying earnings before interest, tax, depreciation and amortisation of between $240 million and $280 million.

“We’re off to a really good start,” Mr Pherous said.

But one investor at the meeting questioned the company’s focus on underlying EBITDA, which strips out costs including some technology expenses, rather than on statutory profit.

Mr Crouch argued underlying EBITDA was appropriate as this was how the business was run and gave management a clear “line of sight”. The company also spelt out the difference between underlying EBITDA and statutory profit, he said.

Divergent views emerged after Corporate Travel’s full-year accounts presented in August.

E&P Capital analysts argued any serious flaws in the company’s numbers “would have been exposed during COVID”, but CLSA analysts listed 15 concerns, including Corporate Travel arguing its rate of expected losses had fallen despite a big jump in overdue debtors.

Mr Pherous countered that the higher overdue debtors related to governments, which are regarded as customers with a low risk of default.

Shareholders waved through all resolutions at the meeting, with its remuneration structure rejigged after a protest vote last year.