Corporate Travel Management 

Going strong on expansion strategy: Corporate Travel Management Ltd.’s (ASX: CTD) stock has risen 22.67% in three months as on September 13, 2018 after the company for FY 18 delivered 27% rise in underlying EBITDA to $125.4m and 34% increase in underlying net profit after tax to $86m. Organic growth has contributed approximately $18.9 million to profit growth. Therefore, the performance has reinforced the company’s global expansion strategy. As a result, total transaction value is up 19 per cent to $4.95bn, and revenues up by 14 per cent to $372.2m in FY 18. Additionally, for FY 19, CTD expects underlying EBITDA to be in the range of $144-150 million, which represents approximately 15-20 per cent growth on the previous corresponding period. The company has declared a fully franked dividend of 36 cents per share, which is an increase of 20 per cent on the prior corresponding period, payable on 4 October 2018. The stock trades at a higher level and is close to its long-term resistance but has higher net margins and decent asset growth. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 31.490.


FY 18 Financial Performance (Source: Company Reports)
 

Experience Co

Decent Growth expected in FY 19: Experience Co Ltd (ASX: EXP) traded ex-dividend on September 14, 2018, and the stock still initially rose 5.56% before trading flat. Meanwhile, EXP stock has fallen 44.36% in three months as on September 13, 2018 as for FY 18, NPAT declined by 28.4% to $6.8m. However, in FY 18, revenue grew by 51.1% to $135.3m and EBITDAI rose 30.6% to $27.4m. In FY18, the Australian skydiving business declined year on year for the first time due to unseasonably adverse weather patterns including substantial amounts of rainfall. On the other hand, for FY 19, EXP expects the revenue to be in the range of A$165 – A$175m and normalised EBITDAI to be in the range of A$37m – A$41m. The company is expected to do well in FY 19 due to ongoing Australia’s tourism boom. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 0.370.
 

Flight Centre Travel Group 

Improving cost margins, dealing with problem areas by either removing or turning around loss making businesses: Flight Centre Travel Group Ltd (ASX: FLT) has reported 16.8% growth in the FY18 underlying profit before tax (PBT) to $384.7 million and 8.5% rise in Total Transaction Value (TTV) of $21.8 billion. The company has posted 6.5% rise in the total revenue to A$2,950m, reflecting a lower growth rate as expected, that led to 25bps decline in income margin. Further, the decline has been brought about largely due to business mix changes, as circa 30% of TTV is now coming from lower income margin businesses. The company is dealing with problem areas by either removing or turning around loss making businesses. FLT is also improving cost margins (slowing overall  cost growth) & enhancing productivity. FLT is decreasing the reliance on Australia to drive overall growth. Additionally, FLT expects further profit and TTV growth in 19. The company will provide forecasts for FY 19 at its Annual General Meeting in October. Meanwhile, FLT stock has fallen 10.47% in three months as on September 13, 2018  and is trading at a P/E of 21.41x. Based on the foregoing, we give an “Expensive” recommendation on the stock at the current price of $55.430.
 

Crown Resorts

New Share Buy-Back & suspension of Notes: Crown Resorts Ltd (ASX: CWN) belongs to entertainment industry and is expected to be at an attractive spot with a wave of boost in tourism sector. The stock has been noted to have a slow stochastic indicator which measures the oscillating movement of the stock for identifying overbought and oversold levels. Lately, the group announced the suspension of Notes (CWNHA) from trading effective from 5 September 2018, in accordance with Listing Rule 17.2. Moreover, CWN has only bought back approximately 1.43 million shares under the Current Share Buy-Back of approximately 29.3 million shares. The company planned to undertake a new on-market share buy-back of approximately $400 million of shares (the “New Share Buy-Back”), which was slated to commence on 30 August 2018. Additionally, for FY 18, the company has reported 12.7% growth in the Normalised NPAT attributable to the parent to $386.8 million. Reported NPAT attributable to the parent declined 70.0% after significant items to $558.9 million. The Group’s net cash position at 30 June 2018 is $221.0 million (excluding working capital cash of $130.9 million). In addition, CWN has declared a final dividend on ordinary shares of 30 cents per share (total full year dividend of 60 cents per share). Meanwhile, CWN stock has risen 0.60% in three months as on September 13, 2018 and is trading at a reasonable P/E of 16.58x. Therefore, we give a “Hold” recommendation on the stock at the current price of $ 13.500 while there is expected to be an uptick in performance in long term given the industry the stock belongs to.


FY 18 Financial Performance (Source: Company Reports)
 
 

 
Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.