Corporate Travel Management (CTM) has hit back at VGI Partners, answering questions around their global footprint and accounting practices.
At the end of last month, VGI released a report which raised questions about the company’s accounts and the true scale of their business which saw CTM’s share price tumble by 27 per cent.
A CTM spokesperson told Travel Weekly that its clear VGI doesn’t understand the corporate travel segment or CTM.
“Global accounting firm EY has confirmed our financial reporting is accurate and is consistent with general market practice,” the spokesperson told Travel Weekly.
“CTM has a clear strategy to establish a global footprint and generate scale, but is not intending to do this by building a costly and less productive small office ‘bricks and mortar’ empire.”
VGI’s initial report raised concerns about “phantom offices” and “aggressive accounting”.
VGI said it visited CTM offices in Glasgow, Paris, Amsterdam, Stockholm and Switzerland and found no signs of activity.
The US offices were also empty or staffed with a skeleton crew, even though the US makes up one-third of CTM revenues.
“In order to comply with regulatory requirements, CTM maintains office addresses in key European countries where required to service clients,” the spokesperson said.
“This allows CTM to have access to local travel content and issue tickets in the local currency without requiring a ‘bricks and mortar’ office in that location.”
“CTM’s teams who service these customers are physically located in the London office (Eurocentre). Our customers understand this and it provides us with a competitive advantage.”
CTM said last week that VGI has a short position in the company, which means they can only profit from their investment if CTM shares go below a certain price.
“VGI has significant vested interest in promoting market uncertainty with respect to CTM and in refusing to accept CTM’s comprehensive rebuttal of the claims made by VGI in relation to its business model, governance and finance reporting,” CTM said via a statement on the ASX.
“CTM is proud of its people, who deliver outstanding customer service, whether they are working from a CTM office, from home or at client premises,” the spokesperson told Travel Weekly.
“CTM has a strong business model and a strong competitive position. Nothing VGI has said changes that. We’re getting on with business and focusing on our customers.”
