In a dramatic return to trading, Corporate Travel Management Limited (ASX:CTD) saw its share price collapse by 81.3% on Thursday, settling at A$3.01 by 12:55 AEST. The severe sell-off followed the company's announcement that a surge in annual interest expenses—amounting to A$20 million—had completely eliminated its fiscal 2026 net profit.
The stock, which had been suspended for approximately one year, resumed trading on the Australian Securities Exchange at A$3.00. It briefly touched a high of A$3.40 before sliding to a session low of A$2.81. By the time of the quoted timestamp, more than 12.5 million shares had exchanged hands, reflecting the intense investor reaction.
Despite the devastating impact of financing costs on the bottom line, the company's operational performance showed notable improvement. Revenue and other income increased by 4% to A$669.9 million, while underlying EBITDA surged 36% to A$113.6 million, with the EBITDA margin expanding by four percentage points to 17.0% from 13.0% in the prior year. Statutory net profit after tax and amortization (NPATA) came in at A$17.7 million, a stark contrast to the A$348.5 million loss recorded in FY25.
However, the company's financing obligations have become a critical concern. CTD anticipates annual cash interest payments of approximately A$20 million in both FY27 and FY28, a figure that exceeds its FY26 net profit of A$17.7 million. This has raised serious questions about the sustainability of its earnings and the feasibility of a near-term recovery, particularly if interest rates remain elevated.
The company's balance sheet reveals additional challenges. As of June 30, customer-related liabilities stood at A$211.2 million, with additional refund liabilities of A$80.0 million. Cash reserves totaled A$106.9 million, but A$27.9 million of that was restricted, and A$15.8 million represented client funds, leaving just A$63.2 million in unrestricted cash. To address its funding needs, CTD secured A$175 million in new debt facilities, replacing a previous A$75 million corporate facility. The new terms feature a floating base rate and covenants tied to market value, exposing the company to potential rate increases.
Operationally, transaction volumes rose 13% to 18.3 million, but the total value of those transactions increased only 2%, implying a 9.6% decline in average transaction value to A$536. Revenue per transaction also fell 7.8% to A$36.61. Regional performance was mixed: Australia and New Zealand saw EBITDA jump 53% to A$39.2 million, Europe returned to profitability with A$24.7 million (after a A$1.2 million loss), and North America contributed A$62.3 million in EBITDA.
Chief Executive Ana Pedersen described FY26 as “an important step forward” while acknowledging that earnings remain below historical levels. The company secured A$669 million in new business during the year, but the path to full recovery is clouded by the heavy interest burden and ongoing market volatility.
Early signs for FY27 are cautious. In July, transaction volume increased 6.7% year-on-year, but total value declined 1.2% and revenue slipped 8.6%. Management attributed the softness to seasonality, client mix, and currency movements.
Investors are now eagerly awaiting further guidance at the annual meeting in November, where the company is expected to provide a profit forecast that fully accounts for its financing costs. The market's reaction on Thursday underscores the severity of the financial strain and the uncertainty surrounding CTD's ability to generate shareholder value in the near term.