What is the stock?
Corporate Travel Management (CTD).
How long have you held the stock?
We initially acquired Corporate Travel Management in August 2017.
What do you like about it?
Corporate Travel Management is a provider of corporate travel solutions with a focus on growing its global platform to provide better service to its customers. It achieves its goals by increasing inventory levels, investing in technology and providing high quality service. Over the past few years, the company has invested heavily into the IT platform to ensure they provide cutting edge service to their customers.
How is it better than its competitors?
Corporate Travel Management uses its own proprietary technology and tools to facilitate leverage of existing staff and offerings to grow earnings and margins. They uniquely focus on ROI outcomes for the customer and this has been a key driver of their success.
What do you like about its management?
Corporate Travel Management has a strong founder-led management team with a service/customer led culture. While it has grown strongly via acquisition, it has a well thought out long-term strategy and we believe management is capable and incentivised to continue the excellent execution seen to date. Management’s focus on achieving the best customer outcomes has been a critical success factor for the business.
What is your target price?
We do not have price targets. We buy or sell based on our expected risk-adjusted relative return within the portfolio over our five-year investment horizon.
At what point would you sell it?
When the Internal Rate of Return falls below our threshold, which is the risk-free rate plus an equity risk premium. Other reasons to sell may be due to a significant, unexpected change in the management team or a change to the business model.
How much has it added (subtracted) to your overall portfolio over the last 12 months?
Corporate Travel Management has been a strong performer since it listed and is up approximately 35% since we acquired it.
Where do you see the value?
Corporate Travel Management is building a strong competitive moat around its business, driven by a client-centric philosophy that is best summarised as helping advisers serve clients better, automate more workflow, reduce administration and compliance burdens. The sales culture in the business has been responsible for much of the success and it has also been critical in terms of facilitating additional transactions. We also believe that management’s ability to identify and acquire good businesses will help in their global expansion and overall offering.
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