Corporate Travel Management chief executive Jamie Pherous.  Picture: Claudia Baxter
Corporate Travel Management chief executive Jamie Pherous. Picture: Claudia Baxter

Share’s slump after 20 ‘red flags’

SHARES in the $3 billion travel empire founded by Rich Lister Jamie Pherous slumped 11 per cent after short-sellers claimed the company wss overinflating its profit and operating "phantom" offices.

Sydney-based VGI Partners, renowned for shorting the stock of law firm Slater and Gordon, said on Sunday that Corporate Travel Management's financial perforrmance had raised 20 "red flags."

CTM shares dropped to $24.50 as of 9.21am this morning.

Founded in 1994 by Mr Pherous, CTM is a leading provider of travel to companies around the world, with a share price that has soared from $1 following its ASX listing in 2010 to $27.64 as of Friday.

Mr Pherous, whose hobbies include heli-skiing in Alaska, has a personal stake in the business worth more than $566 million.

VGI said it questioned claims of having achieved profit margin double that of its competitors, its strong organic growth and a global network of offices.

"Corporate Travel's reported margins (of 32 per cent) are surprising and we question whether the company is twice as profitable as its peers," VGI said..

VGI also alleged that CTM is overstating the number of offices it had around the world.

"We visited each of the 12 European office locations listed in the company's website and could find no trace of Corporate Travel at five locations," it said.

"Visits to the company's United States locations identified two locations that were vacant of unattended."

In statement released to the ASX this morning, the company rejected VGI's claims.

In an investor call this morning, Mr Pherous said he wanted to take the time to clear the air and it was business as usual.



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