Corporate Travel Management (ASX: CTD) has responded a report published by VGI Partners (VGI), wherein it raised five concerns:
- VGI’s report claimed that CTD had “blamed” the company’s 1H20 result on the coronavirus
- VGI’s report claimed that volume-based revenue is in decline
- VGI claimed that CTD produced negative free cash flows to equity in 1H20 and is unable to reconcile its cash flow movements mentioned in the company’s investors presentation
- VGI’s report claimed that CTM has been increasingly capitalising software development, and amortisation of previously capitalised costs are an increasing drag on profits
- The report raised questions about intra-period borrowings, and raised the prospect of using credit cards to pay bills while repaying debt
CTM has rejected the claims of irregularities contained in the report.
At AEST 01:00PM the stock was trading at $13.130 per share, down by 5.811% from its previous close.