URGENT UPDATE: Corporate Travel Management is in hot water as a series of accounting discrepancies have triggered a suspension from the ASX. This shocking revelation comes amid a tumultuous period for the company, which boasts a market cap of $2.35 billion.
As of November 3, 2023, the company announced it is under investigation by its new auditor, KPMG, to clarify past financials previously audited by PwC. This suspension raises critical questions about the integrity of their financial reporting and the future of the company, which has not traded on the ASX since August.
Corporate Travel’s board, led by chairman Ewen Crouch, has made several statements over the past few months regarding issues primarily affecting its high-margin European operations. They claim that any necessary revisions to the financials will likely result in an upward adjustment of earnings, rather than a decline. However, skepticism is mounting as each trading day passes without resolution.
In a startling investor update released last Friday, Corporate Travel claimed that business operations remained “normal” and that supplier commitments were intact. The company reported remarkable growth in revenue and underlying EBITDA, but notably, these figures were based on “unaudited consolidated management accounts.” This raises alarms about the reliability of the data being presented.
Just three hours later, Corporate Travel issued a follow-up statement correcting previous revenue figures—down from an inflated $13.2 million increase to an actual $9.9 million increase, with underlying EBITDA corrected from $12.5 million to $9.2 million. This mishap, revealing a striking $3.3 million discrepancy in both figures, has left investors questioning the company’s competency during a critical time.
Adding to the complexity, Corporate Travel’s debt facility was recently extended from $100 million to $150 million. Although the company states it has $168 million in cash reserves and has not drawn any of the debt, the implications of its current suspension leave many wondering if they can even access these funds if needed.
A spokesperson for Corporate Travel has confirmed that the terms of its debt facility remain confidential, leaving analysts and investors in the dark about crucial financial obligations tied to the company’s survival.
Looking ahead, company leaders Jamie Pherous and Ewen Crouch have indicated they will provide a “further update” sometime in November 2023. However, with the suspension still in effect, shareholders are left anxiously awaiting news that could either restore confidence or deepen the crisis.
This ongoing saga raises significant concerns among investors as they grapple with the potential fallout from these accounting controversies. The urgency for transparency and clarity has never been more critical, as Corporate Travel attempts to navigate through this challenging period.
As the situation develops, stakeholders will be watching closely for any announcements from Corporate Travel’s management, hoping for a resolution that can restore trust in a company currently at the center of a financial storm.
