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viewCorporate Travel Management Ltd

Corporate Travel shares surge as it dismisses shortseller’s second report

Shortseller VGI Partners revealed it had increased its short position to 2.5 million shares.

EY sign on building
EY has been engaged due to its specialty experience in the travel sector

Corporate Travel Management Ltd (ASX:CTD) lifted its trading halt pre-market this morning stating that shortseller VGI Partners misunderstands its business model.

Shares in the company hit an intraday high of $23.06 this morning, up over 15% from the price they last traded at before being halted on Monday morning.

READ: Corporate Travel enters trading halt to address second report from shortseller

Corporate Travel’s response today stated that view is that VGI’s latest report raises no new substantive issues and that its response to VGI's original report addressed all claims by VGI.

The company sees no need to comment further on many of the points repeated in VGI’s latest report, other than in respect of revenue recognition and its office footprint and staff numbers.

Impact from change in revenue recognition immaterial

Corporate Travel said the change in revenue recognition in FY18 did not reverse the change in policy made in FY14 but resulted in a slightly earlier revenue recognition point in instances where commission is confirmed by the third party responsible for collecting and remitting commission, prior to cash receipt.

The impact of $0.5 million was immaterial hence no further disclosure was given in FY18 and it is not expected to be material in FY19.

Corporate Travel breaks down office footprint and staff numbers

In response to VGI’s claims regarding staff numbers – Corporate Travel confirmed that its total full-time equivalent (FTE) headcount at 5 November 2018 was 2,666.

It also broke the headcount down by region.

EY engaged for ongoing support

Corporate Travel also revealed that last week it engaged big-4 accounting firm EY due to its experience in the travel sector.

EY is the auditor of Flight Centre Ltd (ASX:FLT), Helloworld Travel Ltd (ASX:HLO) and auditor and advisor to other global travel sector participants.

Quick facts: Corporate Travel Management Ltd

Price: 17.92 AUD

ASX:CTD
Market: ASX
Market Cap: $1.95 billion
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