It’s all in the name – Corporate Travel Management | Summer Series

Bryce: [00:00:16] Welcome to the Equity Mates Summer Series, proudly brought to you by CommSec, the home of investing over 12 episodes where deep diving into some of the most exciting, interesting and well known companies from around the world. Each episode will be unpacking one company with one expert investor who will be learning from their process, and we'll be hearing why they like the company. My name is Bryce and as always, I'm joined by my equity buddy, Ren. How are you?

Alec: [00:00:40] Bryce, I'm very excited. I'm looking forward to this episode. The Motley Fool is certainly divisive, divisive or

Bryce: [00:00:47] Divisive. Divisive, divisive.

Alec: [00:00:49] Either way, let's have.

Bryce: [00:00:50] That's a divisive one

Alec: [00:00:53] On one hand, the ads are

Bryce: [00:00:56] effective.

Alec: [00:00:57] Effective but mocked. But on the other hand, I think they've produced some of the best finance content producers in Australia. Owen Rask from Rask Australia is Motley Fool. Claude, from, a Rich life. Andrew Page from Strawman, Matt Joass at Maven Funds Management. We're not going to speak to any of the same today. But I think, what you can say from that is that The Motley Fool is really good at teaching their employees, their analysts how to analyse companies. Yeah. And we're speaking to the head honcho of The Motley Fool Australia here. He's the chief investment officer at The Motley Fool Australia. You've probably seen him in the media. It's Scott Phillips. Yeah. And he's joining us to take us through Corporate Travel Management. So hopefully we can learn and become as good an expert as all of those that I just listed. 

Bryce: [00:01:54] I love hearing from Scott. Now, the Equity Mate Summer series is proudly supported by CommSec. The beauty of investing is that you do not need a degree to get started and to be successful, you can educate yourself. CommSec has a rich library of resources for you to stock up on tips and tools to help you find and research a stock and understand the stock market. Get $0 brokerage on your first ten trades for the Australian market when you join. Download the CommSec app today or visit CommSec.com.au. CommSec T&Cs and other fees and charges apply.

Alec: [00:02:26] Now we need to remind you that while we are licensed, we are not aware of your personal financial circumstances. Any information on this show is for education and entertainment purposes. Any advice is general, except if Scott tells us what the next Afterpay is. Well Bryce, before we speak to Scott Phillips and ask if Corporate Travel Management is the next Afterpay. Let's unpack a little bit about Corporate Travel Management. Good news, there's a lot of what the company is in the title. 

Bryce: [00:02:55] That's right. Corporate Travel Management are a travel management company that is co-created. 

Alec: [00:03:00] No. Wall. Yes. Corporate for corporate. 

Bryce: [00:03:03] Yes. Yeah. Started in Australia. Now they're in the US and the UK. 

Alec: [00:03:08] They're all over the world. 

Bryce: [00:03:09] Yeah. It's been a, it's a, a global company and one that to be honest, I think as far as I remember investing they have been around always up there. It's like keep an eye on it. 

Alec: [00:03:22] Yeah. As long as I remember Scott Phillips, he has spoken about Corporate Travel Management. That was like a moment of nostalgia when he said, this is a company he was going to do, because I feel like he's had his eye on this one for a while.

Bryce: [00:03:35] Yeah, well, he's a shareholder. 

Alec: [00:03:38] Okay. Cool, right? All right, so. Let's take a step back. For people who work at big corporates, you probably have used this system or a system very similar to it. To talk about my experience, whenever you had to book travel, you. It was essentially like a search function. And you searched for flights, or you searched for hotels, or you searched for higher cards, and if you didn't take the cheapest option that was presented, you had to get GM approval and explain why you didn't take the cheapest option. But it was like, you know, so Woolworths is quite closely tied with Qantas, two bad companies. Coles was quite closely tied with Virgin. And so, you know, like we only saw Virgin flights and stuff like that. And so that travel booking system, that corporate booking system is essentially what Corporate Travel Management is. Yeah. And then, you know, you try and buy it, be sent off for approval. And then you travel.

Bryce: [00:04:42] And that's it. 

Alec: [00:04:42] That's it. 

Bryce: [00:04:43] They do it for you.

Alec: [00:04:44] Well, then. Then then down to the back end of like, costs as well, like, receipts and stuff as well. Oh, is that a difference? 

Bryce: [00:04:52] A tax like that. You mean for like, like account keeping? 

Alec: [00:04:55] No, it's like I bought lunch. Can I get reimbursed for that? 

Bryce: [00:04:58] Oh, I see, can't remember when we did that. I think we just flick a message through to the boss is our receipts anyway. Ren, the company's been around for over 30 years. I think they're in their 30th year of operation at the moment. As we said, they're very much a global company. Now they have a client base of 5700 clients around the world, 17 million transactions in FY 24. I mean, this is just a long term compound. And I think, you know, it's one of those companies that got really smashed up in Covid. Because obviously corporate travel was a thing of the past. No one was flying anywhere. 

Alec: [00:05:38] Yeah, yeah. It's like the travel they got knocked as a travel stock. And then they got an additional knock because of the question around the long term effect on corporate travel. Yeah. Yeah yeah. 

Bryce: [00:05:49] That whole you know this is just proven people don't need to fly business to. Yeah. Yeah. For a lunchtime meeting. 

Alec: [00:05:55] Like for every headline that zoom got, Corporate Travel Management was kicked in the guts again.

Alec: [00:06:00] Yeah, it's not too graphic, you know.

Bryce: [00:06:03] However, that has changed. We know that more and more people are flying and, things are much more back to the way they used to be. And as such, corporate travel is certainly back up to where it used to be. 

Alec: [00:06:17] Yeah. So, you know, IPO’d in 2010. Since then, it's 26, it's revenue and 47 times its EBITDA. So almost profit for the few things taken out. But it's it's just been like an incredible growth story. No debt, cash on the balance sheet. And it's just growing. It's grown from being a Australian based company. Now about 80% of its revenue is generated offshore in every region that it operates in. It has over $1 billion in bookings, so it's very geographically diversified. According to the company, it's now the fourth or fifth largest travel management company in the world. Yeah.

Bryce: [00:07:04] So it's up against the Booking.com. 

Alec: [00:07:07] So no I reckon it would be in the in the travel management platform space. Yeah I couldn't tell you another one though.

Bryce: [00:07:15] No. Me either. I'm trying to think what we actually had if, if we had corporate travel when we're at Woollies. So yeah it's hard to tell if we were. [

Alec: [00:07:22] But here's a few corporate travellers, travel perk, I don't know, not just Google. I don't know which ones you go on.

Bryce: [00:07:31] So I think the story for it from here is just how can it continue to grow its market share globally. And there are probably niches that it can further operate in, like, how can we support travel for particular industries? They've sort of been acquiring businesses. And, we'll ask Scott about that when we bring him in. But, you know, they're pretty well-established here in Australia. So I guess the long term. Investment thesis would centre around how can it continue to expand globally and just keep continuing to compound? 

Alec: [00:08:05] Yeah, I think yeah, you're right. It's like the corporate travel market, like the market for business travel will continue to grow as more businesses, just as the economy grows, and as the population grows. The question as an investor is how can Corporate Travel Management grow faster than just the market? They've done it so far. It's not like a particularly sexy company. 

Bryce: [00:08:32] That's okay. 

Alec: [00:08:33] That's okay though.

Bryce: [00:08:35] Yes. The companies said that for global corporate travel, they expect the market to grow at 7.9% per annum from now through to FY 26. So a pretty decent clip. 

Alec: [00:08:45] Yeah. Now one thing before we get into it, Corporate Travel Management also do a lot of work for governance. And they have been in some controversy. Earlier this year the ethical super fund here in Australia, Future Super actually divested its holdings of Corporate Travel Management due to their involvement in the PB Stockholm. Now do you know what that is, Bryce? So let's say how well you've been following the news. 

Bryce: [00:09:11] No. 

Alec: [00:09:13] It's a barge in the UK where they were housing asylum seekers. 

Bryce: [00:09:19] Okay. Sorry. So what's the relationship to corporate travel? 

Alec: [00:09:22] I think Corporate Travel Management organised because they do a lot of government bookings. They do a lot of work for the government. 

Bryce: [00:09:28] With a middle man in organising the logistics. 

Alec: [00:09:31] Yeah. So like they do. Yeah a lot of that kind of work. I think that did work for governments around the world. 

Bryce: [00:09:36] Interesting.

Alec: [00:09:37] Yeah. 

Bryce: [00:09:38] Well let's bring in Scott Phillips.

Alec: [00:09:41] You couldn't get off that topic fast enough, could you? 

Bryce: [00:09:45] Before we chat to Scott. CommSec is the home of investing. And if you want to start small, you can through the Commbank app, you can invest with as little as $50. Consistent small amounts can add up to meaningful returns. Visit commbank.com.au You for more CommSec T&Cs and other fees and charges apply.

Alec: [00:10:02] We'll be right back with Scott after this short break. 

Bryce: [00:10:15] We're here with Scott Phillips. Scott, welcome to Equity Mates. 

Scott: [00:10:18] Bryce, Alec, thank you for having me back. It's been a while, guys, but I love what you guys are doing on the podcast and very happy to be part of it. 

Bryce: [00:10:23] It has been a while, I would say Covid since the last time we had you on the show. You're at Fin Fest, which yes, which is fun. Yeah, yeah yeah, yes, Covid. I think.

Scott: [00:10:31] It was Covid because it was literally right in the middle of lockdowns. And I'm outside Sydney. You guys are in Sydney. I think part of it was kind of like trying to work out whether we could meet where we could do it, like kind of stuff.

Alec: [00:10:39] Yeah, yeah, yeah, yeah. 

Scott: [00:10:41] So I do like. 

Bryce: [00:10:41] Well, anyway, good to have you back. Now we're here to talk, Corporate Travel Management. So, Scott, can you firstly just tell us what Corporate Travel Management does? 

Scott: [00:10:49] Yes. Australia is very good at naming companies pretty literally in this case, Corporate Travel Management that exactly. I'm a shareholder in Australian Ethical Investments, which funnily enough does that Aussie Broadband does real business Australians Corporate Travel Management unsurprisingly. You know, I don't love the kind of made up corporate names actually. You know, the whole the vowels are missing and everyone insists on their own capitalisation. So corporate travel management, it's kind of cool because that's what it does. It is literally a travel manager largely online, but with a call centre and kind of, you know, like ship managers for corporates, for companies, generally speaking, medium to large businesses. They do a little bit with smaller businesses. But to really benefit from corporate travel scale and from them to benefit from those customers, they tend to be the more medium large businesses. And increasingly over the last probably 5 or 6 years, many, many, many more multinational or truly international businesses, they now have operations right around the world, every continent that either have direct or indirect relationships with customers. So they they're kind of now globally, you know, vice corporate travel manager, quite literally, who basically, you know, if you're kind of a big company and you want to book a trip, book a hotel, go somewhere, you use Corporate Travel Management software or, by the way, one of their competitors to make that booking, it handles all things like approvals and travel policies, all that kind of stuff. Some of your corporate listeners are having flashbacks right now. 

Alec: [00:12:15] Exactly, exactly.

Scott: [00:12:17] So yeah, that's what they do. They basically just provide the backbone, the kind of systems and processes to allow companies to take their travel bookings. 

Alec: [00:12:25] So conceptually not the most difficult, like get your head around the company. And as you said, the name gives it away. But where the rubber hits the road is when we start to try and analyse it as an investment opportunity. So when you approach Corporate Travel Management as an investor, what's the most important thing you're looking at? What metrics are the ones that you pay attention to? How do you analyse it? 

Scott: [00:12:48] So this is a great question. There's some things that are generic about most investments I'm looking for anyway. And then there were some specifics about corporate travel. And so I'll talk about them in that context, because I think regardless of what the company actually does, not that it doesn't matter, but the same sorts of metrics are what you're looking for, right? So you want a business that ideally is growing unless you're the value investor trying to find it in dollars. So you're looking for you. Look at the top and bottom line growth. You're looking for returns on in theory assets or equity, most preferably allowing of course, for the debt that the company may carry. So I can't go deep into the, you know, the metrics and return ratios. But you're looking for a business that has the ability to grow, that has decent returns on its capital in whatever form, and a business that's able to grow my time and then grow profit margins. And I know that sounds like a really generic answer, but I think it's important to not skip over that stuff that is not company specific because it really underpins what we're looking for. And I think a company that can deliver a say, I talked about growth, and I say companies that are more relevant to more people more often. And those three are kind of really important, not so relevant. You got more things. More more people. Obviously you want to have a larger number of customers and more often you want repeat purchases from your business. And if you can get those three together, you're in a pretty good place. So that's the revenue line. Ideally, then you want a business that can grow profit by scaling efficiently. And in a perfect world, you want profit growth that exceeds revenue growth because your costs grow at a slower rate then your top line. Now, in the last 18 months, that's been pretty difficult for a whole lot of companies because inflation is a real thing. And just keeping up with inflation has been a victory in some industries for corporate travel. They've had a little bit better than that, but we'll get to that in a minute. Speaking of Covid, the business though, so growing profits faster than top line growth is important. And so that's kind of a really straight line view. And again returns on assets or equity I'm looking generally for more than 15% if I can find it more than 20 preferably because those are the very best businesses. And that really measures a company's ability to take shareholder capital and turn it into a cash flow for shareholders. Right? So the higher the better generally for that. So that's kind of the generic stuff I'm looking for balance sheet wise. And this is important for corporate travel too, particularly compared to some of its compatriots' reasonably conservative balance sheets, the thing I call a lazy balance sheet in the good times that all of a sudden becomes salvation in the bad times. And corporate travel had that experience in 2020 and 2021. And the business is able to kind of collect on its debts again, not surprisingly. You don't want accounts receivable going through the roof or companies growing by taking, you know, shortcut kind of revenue growth without being able to collect the cash. So that's kind of a bit dry and boring summary. But those are, I think, the most important parts of investing, if you don't get that, the other kind of company specific metrics are interesting, a worthwhile and hope you understand the business, but don't always get you the basics that really matter. So I'll turn to to Cooper Travel specifically here and they doing a few things. So it's a slightly different business. I'll start from the very, very top. Travel businesses measure what they call total transaction value. Now if you're a travel manager I call a flight centre, for example, or Webjet or corporate travel, something else. You take a whole lot of money from your customers. Most of that, though, goes straight through to the accommodation of flight providers, transport providers. And so you might say it's like $100 worth of transaction value, but that's kind of the figure with the ticket price of flying from, well, no, it hundred bucks these days. But let's pretend, Sydney and Melbourne for example, is a hundred bucks. So that's the total transaction value. Corporate travel books that value of cash transferring through the business. It only keeps a French a tiny fraction of that. But the total transaction value tells you how much the customers are spending with Corporate Travel Management over time. So that's an important starting point. Why I raise that is because when you get to revenue, the revenue is the tiny proportion of that TTV or total transaction value the company gets to keep. And that margin, that percent is actually a really important thing to track Over time. The companies, supplies, airlines and hotels will try desperately to pay it less money for making that transaction. So you want to understand what proportion of that value they're getting to keep. And again, different types of business domestic travellers, international travel events versus hotels. These things all have different margins, different revenue margins from that TTV. So that's a really, really important metric. The next thing I'll look at is by the international size and international growth. So if a corporate travel because it relies on traditional metrics we might get to that in a minute. But it's relying on growth. We are paying a decent premium for a business that we think can grow for a long time. By the way, I should say this up front: I own shares, so let me put that on the record very, very, very clearly. So everyone knows exactly where my incentives are here. I think it's a great company, by the way. That's why I'm talking about it. But everyone needs to know that, you know, I've got skin in the game here, so I'm not unbiased. The company's growth, you need to get growth and it's all going to come largely international only. But if you think about a business already pretty mature in Australia, that's now more than 20 years old. It's done a really, really good job of taking market share in Australia. But a lot of the growth now comes from overseas. So you want to look regionally at where the growth is coming from and how big are those individual regions relative not only to Australia, because that needs to be more relevant over time, but compared to the size of those individual markets. Now, we know that the US population, for example, is 15 times the size of Australia. So on a like for like market share, you get a sense of how big that could be. The UK is three times the size of Australia, Europe, you know, a billion or so people there. So you start to think about the size of the prize in that context. Understanding international growth. The US is already bigger than Australia and New Zealand. Europe is probably only a year or two away from that. So for a business that was born in Brisbane and grew in Australia predominantly for years, so now it's third largest region of Australia and New Zealand is is pretty impressive growth wise. The last thing I'll talk about with corporate travel guys specifically we getting all those if you want but is the combination of growth coming from organic versus acquired growth and corporates on a roll up in a traditional sense and I don't know if you guys are covered roll ups much, but basically there's one model for largely financial engineering, which is, you know, if you're a child care centre operator, for example, is the classic one. You've got one, you buy a second, you buy a 50 by 20 by a 20th. You get a really nice scale that way. Now, whether it actually generates real ongoing profit growth as opposed to just a one off step change, is a really big question when it comes to corporate travel. You want to see both of those things. And generally speaking, they've done a pretty good job of growing both at roughly the same pace over time. So organic growth, which is the same business I had all this time last year. How are they? Are they getting more customers, the customers spending more money? Are they keeping their customers? That's really important. The other part of the thesis was they could always buy relatively inexpensive businesses to acquire with compatible cultures, compatible systems that enlarge their global footprint. And by doing that, you actually get a whole lot more value for the company, because they're taking that and using that to grow long term, not just one of acquisition growth, but then be able to organically grow that business as well. So if I've done a good enough job explaining that the combination of acquired growth and organic growth is really important to understand, because that is going to generate returns for the long term. But it also tells you how that growth has been done. Acquired growth is never as good as organic growth, generally speaking, because you can buy any business, right? If you pay up enough, you can buy it now. Corporations had a pretty good job, I think, but you and I could go out tomorrow by nine newspapers. So look how big a publishing business is. Look how much we grow it. So now you guys bought a lot of money in Fairfax. That's not the way it works, right? Versus saying actually for the product we've already got, at least the numbers have gone up by a cent over a year. That's genuine organic growth. And so neither is bad. Not necessarily good, but both together a reasonable combination is what you want to think about and look for and make sure those acquisitions maybe this is the last one. The acquisitions are priced well. If they're going to make the acquisitions, they're not overpaying for it. Speaking of childcare centres, we should get education. One of the one of the kind of followers of ABC learning, which we don't wanna talk about too much anymore and yet kind of had to pay more and more and more for larger centres as it wanted to get bigger. And so the economics actually got worse, rather better over time, even as they grew scale. So understanding not only where the growth is coming from, how much you're paying for that growth is really, really important.

Bryce: [00:21:20] So a lot of I guess elements in there Scott, that build the investment thesis and the bull case. And they've done a pretty good job at establishing themselves here in Australia. And it feels like the thesis now revolves around them expanding internationally and to some of the larger markets. What is their competitive advantage when going into the US and UK, where you're obviously going to be facing a lot stronger competition than here in Australia?

Scott: [00:21:45] That is a fantastic question. So a couple of things are going on there. The first is they pride themselves on the culture that they've built. They tend to win awards all over the place for employee culture, not just relationships with the customers. They also thought doing customer awards and retention is really hot. So if you roll that together, one of the parts of the secret sauce for corporate travel is the ability to attract and retain good people, and to attract and retain customers, keep people on the books. Right? The cost of acquisition is one thing, but if you can keep those customers around for years, which they tend to do, you make a lot of money. The acquisitions I've done have largely been to give them a footprint in certain geographies or certain industries. Quite a few years ago now they've got a travel agent that specialises in government in the US based, I think it was Washington or Virginia or Maryland somewhere like that. And so they said, well, we don't have a thing now let's do that thing. But then let's take the Corporate Travel Management culture. And then the second one is systems that they have. So they run proprietary booking systems. I spoke to CEO Jamie Ferris about 2 or 3 months ago, is that they've reskin the entire system every five years or so. They literally rebuilt each five years to make sure they stay at the forefront of technology. And so if you kind of combine the culture they've got, which goes both internally, and then it's kind of, you know, customer facing and the systems they've got that's tended to be their success in the past. Now the company also claims we can't really verify this externally, but the company says I only make acquisitions where the cultures fit. Various has said before these knock back acquisitions which modified financial sense but didn't have a, you know, a cultural fit, the make of tribal management feel like they could buy this thing and use it to expand, you know, this land and expand kind of a required expand, if you like, really use it successfully. And so that's probably those areas are where the real advantage is. But it's largely culture and systems. End of the day. Travel booking systems are a dime a dozen. You know, again, the three of us can sit down for a week and come up with something using. So off the shelf open sourcing. Now maybe it would be very good because I'm not a great programmer, but you get the idea, you know? So it's what makes them different. They have great relationships to customers. They keep customers for ages. Here's the thing. You actually pay corporate travel to use their system. Now, if you can convince someone to pay to use you rather than jump on widget yourself and to do it yourself, or get staff to do it themselves, there's got to be real value there. And most of their customers actually pay corporate travel and still save money. So it's a kind of a really, really nice this is not necessarily unique to them. But if you think about that idea of I'm gonna pay you and be better off after I've paid you, that's a pretty sticky business, right? Because it so says you can save the fee, but you got to cautious of more in time, effort, energy bookings, outside polity reporting, all that kind of stuff. You kind of become a not quite as sticky as enterprise software or anything, but it's a pretty sticky offering that businesses say, well, it costs a bit of money, but you are saving more than that. Why wouldn't we stay with corporate travel? And that seems to have been the case for most of their customers for most of their life. 

Alec: [00:24:36] Yeah, I was looking at the, FY 23 numbers, and I think the client retention rate was 97%. And so if you can, you know, if you can win new business and keep 97% of your existing business, that's pretty powerful. 

Scott: [00:24:51] And it's even more extraordinary because it's easy to replace. Right. Like if you have a zero or so it's really like fundamentally enterprise software. This is where Siebel says, you know, it's one of those so deeply embedded. You couldn't rip those things out so hard to replace an enterprise planning system because it's tentacles everywhere. That's great stickiness. Corporate travel software isn't really sticky as though it doesn't. It doesn't deserve neural itself to have a 97% retention rate. It's too hard to get rid of. You could pretty much change to a flat ten, a model or an Amex model. American Express, do travel management, something like that reasonably easily, with not as much pain as you'd imagine. So to keep those sort of customer numbers without that really lock in business model, I mean, there's probably elements of lock in, but nowhere near as much as the other guys. And yet when you keep or you only lose three out of a hundred customers every year, it's a pretty nice position to be. 

Alec: [00:25:39] So then let's turn to the other side of this story. Where are the key risks for you, and what would be the signs that your thesis is breaking? 

Scott: [00:25:48] Yeah, this is great. So there's lots right. And I think this is why I'm glad you're asking the question because it's easy for someone like me or anyone who likes a stock to talk about why they like it, but you want to say the downsides. I think firstly, it's Keenan risk. Jemmy first has built this business from the ground up. You're still a relatively young bloke, so I hope you're around for a long time. But I love founder-led companies for a reason. Right. I just tend to have more passion, more insight, more drive. They tend to put up with less corporate bias. You get less bureaucracy built up around it. He is absolutely the driving force behind Corporate Travel Management. I think he is. He is probably, numbers aside, he is the biggest risk to the thesis. If he was to leave the business was to deteriorate meaningfully. That would be a very, very big red flag. So that's probably the major one. Second one is their ability to talk about acquired and organic growth. If the organic growth number starts to suffer on a secular as opposed to cyclical level. Now we've got to go through some tough economic times. So we need to separate those two out. Any business exposure, the economy is going to do worse when the economy gets worse. But that's just the reality. If you're traveling, what is you to cancel the corporate travels right. You your business travels goes off the cliff and they may well struggle for a year or two. But on a secular level, in other words, they're losing market share rather than just losing sales because the economy's down. That's a really important one. So the secular growth rate needs to stay reasonably high for a reasonably long period of time because we're paying a decent multiple sort of super expensive multiple. But it's enough that if it, you know, if you grow 4% a year from here on in, I'm going to lose money, you know. So it's a really, really important one. I mentioned growth. And I guess the flip side of that will also match the other side of the same coin is market share. This is a very one of the great things I'd mentioned the bull case, but it's a very, very, very fragmented global industry. Even the biggest guys have maybe high single digit, low double digit market shares. There's a lot of market. They have to go up. That being said, if they stop being the preferred player, I prefer that consolidation, they can potentially lead or at least do very, very well from May well fall over. And that's a big issue. And you kind of already like you mentioned, kind of the key one actually, which is that retention. Right. You know, they need to retain a large number of their customers to make the additional customers they get worth something. They're going to 10 or 12, say, the year probably underlying the Covid impact of the last few years. If that customer retention rate fell to 90%, all you have to do is replacing the customers you're losing and then it becomes a no growth business. So you say they're all they're all kind of fitting to each other, you know, in a way. But again, going back to that first thing I mentioned, more customers, more relevant. The more people there are, the more often that, if you can keep doing that, you're okay. If you stop doing that, then you are in some honestly, even corporate trouble with the investment thesis itself relies on that growth. So you need that to come off. Last month, probably those acquisitions I talked about. And often the bear case is the opposite of the bull case. You know, if this goes well, we'll do well. If it goes badly then we're in trouble. That's true of acquisitions. If they start paying too much for those acquisitions, the big risk is as you get bigger, you want to make bigger acquisitions to make the meaningful right. Warren Buffett's Berkshire Hathaway owns shares in that too. Doesn't say anything less than what is $100 or whatever it is. There's $1 billion. Because even if you did really, really, really well, it wouldn't move the dots. Yeah. The problem with that is that they have to make the bets. It's like going to acquire businesses to make it worthwhile. And that in itself means that you've got them upping the stakes each time. That's almost like roulette, right? At the time. Zero is eventually worth zero. So yeah, if you have a winning streak, you're okay. But if you get those acquisitions wrong, if you acquire the wrong business, you pay too much. The culture isn't right, then you really can damage this business for the long term. That's wild. I haven't done that, but those are probably the biggest watch outs. I think in terms of the business, there is probably a larger secular one which is less easy to see, but something to be really aware of, which is any change in corporate behaviour. Now, I happen to believe that we saw, frankly, post the Covid lockdown period, people jump back on planes and cruise ships a million miles an hour, right? I'm shaking my head going, you jump back on a floating petri dish. What are you people doing now? I wouldn't do it plain people didn't know. No. Chris is the only one who's listening. Who did? But, the simple reality is people, human behaviours, human behaviour, sales. People want to make sales people want to meet in person. You know, those things are real. And I think that's likely to continue. But back to the bear case, which is what we're talking about. If there was to be a meaningful, concerted change in the way people mate, whether it's environmental, whether it's cost, whether it's employee friendliness, we just don't want you anymore. And last year, you only got to be in the office four times a year. Then all of a sudden you find yourself in where copper travels as a concept copper travel manager at the business, but the concept starts to wind. If it does, then there are significant concerns for the growth rate of that business. 

Bryce: [00:30:24] Well, luckily for corporate travel, Scott, the metaverse hasn't taken off as was expected 12 months ago. Or to close out if the ambitions play out. And I guess that bear case doesn't come to fruition. What do you expect or what would you hope to see from corporate travel in ten years time? 

Scott: [00:30:46] That's a great question. I, genetically hate making predictions like that sort of stuff. So I'm going to probably reject the premise of your question is the potential of my site, but I will give you an answer. I will give you an answer. I think, you know, my listing starts to be roughly right rather than precisely wrong. So if we if we go back to a little bit of what I've already talked about, they are a very high quality business with a great culture. Thus far, the acquisition discipline has been very good. There's no reason to believe that will change anytime soon. In my view. As long as Jaime hangs around again, back to that bear case. So if all that's true, I can be roughly right rather than precisely wrong. There is a I think this is a growing market. I don't think metaverse takes over. I think people travel more and spend more money doing it. So you're an industry, a secular growth. You're an industry where market shares are relatively tiny compared to, you know, the time William calls went 40% market share in supermarkets, by the way. You know, there was a time when these things weren't so big. I would imagine there is plenty of room for corporate travel to double and double and probably double again in terms of revenue. That's probably was I. Yeah, maybe that, maybe not quite that much. Maybe there's no need for a full backup, maybe five for them in revenue terms, which if they do things right, should actually deliver seven, eight, nine times profit. And again, no predictions, no time frames. But if you think conceptually about what that future might look like, I think this plays around the way to go. And I think we'll continue to acquire customers we should be able to expect. I hope to be a shareholder in ten years of owning the shares for almost ten years, I think maybe just over now. If they're continuing to execute, there's no reason to believe the business model itself can't continue to roll out the way it is. The growth rate probably slows as you get bigger. And the old saying elephants can't dance in trees. I go to the scribes. Yeah, choose your metaphor. So the growth rate itself probably slows, but the size of the business relative to now the multiples of, of revenue and hopefully profit we could be in for should still be sufficient to believe that in ten years time there's one withholding. I don't think it needs to be excessive PE to do really well from here. So more of the same. And it's like, do it for a decade. I think investors will be in for

Alec: [00:32:48] I love it, Scott. Well, let's hope you're more roughly right than precisely wrong. I like that saying. We might borrow it 

Bryce: [00:32:56] And more relevant to more people more often. 

Scott: [00:32:59] More often.

Alec: [00:33:00] Yeah. There you go. There we go. 

Bryce: [00:33:01] Here you go. Oh. That's so.

Alec: [00:33:03] Yeah. Well, I love it, Scott. Hopefully one day equity Mates is big enough to use Corporate Travel Management services. But I'm sure well, before then, we'll get you back on the show. To chat with more investors. 

Bryce: [00:33:17] Thanks, Scott. 

Scott: [00:33:18] That sounds awesome. I would have thought with a thousand employees. Are you guys using it already? But maybe. 

Alec: [00:33:21] We could. Let's see. I'm not sure I know what you're looking for. Thanks. Right. 

Alec: [00:33:26] Now, before we go, we want to say a huge thanks to our summer series partner, CommSec, the home of investing. If you're looking for more support and resources to build confidence in the market, head to the Content Hub. Otherwise, you can get $0 brokerage on your first ten trades for Aussie markets. When you join brokerage on US stocks from just 5 USD, and you can invest as little as $50 through the Commbank App. Download the Commbank app today or visit commbank.com.au. CommSec T&Cs and other fees and charges apply. Investing in overseas markets exposes you to additional risk.

Bryce: [00:34:00] Now stick around because the companies keep flowing. We've got Fraser Christie from TDM Growth Partners to unpack Mineral Resources in our next episode.