24 March 2024
CTT is a new company in my portfolio, which I briefly described in my previous post. It was also one of the fastest Buy decisions I have ever made, having met the management on 15 March in Madrid and doing more work over the weekend.
On 19 March, the company reported full-year results. Judging by the stock reaction, one may be excused for confusing CTT for some trendy US retailer. I was surprised that the market was so keenly focused on quarterly earnings and performance relative to consensus. The company beat its guidance, which it raised twice in 2023.
It also proposed a full-year dividend of €0.17, 36% higher than in 2022. The payout ratio (35%) was at the lower end of the policy set in 2022 (35-50%). The dividend represents a 4% yield.
For me, the most important takeaway from the results and earnings call was that the company’s strategy to become a leader in e-commerce delivery in the Iberian market is working. CTT is beating the competition, which means it has a superior product. In Portugal, it benefits from a first-mover advantage and synergies with other services.
In Spain, it has a unique differentiating offering - A customs clearance and sorting facility in Madrid that reduces delivery time for customers and saves them costs. This higher quality/lower cost service is an essential competitive advantage for CTT in that market.
On 19 March, the company reported full-year results. Judging by the stock reaction, one may be excused for confusing CTT for some trendy US retailer. I was surprised that the market was so keenly focused on quarterly earnings and performance relative to consensus. The company beat its guidance, which it raised twice in 2023.
It also proposed a full-year dividend of €0.17, 36% higher than in 2022. The payout ratio (35%) was at the lower end of the policy set in 2022 (35-50%). The dividend represents a 4% yield.
For me, the most important takeaway from the results and earnings call was that the company’s strategy to become a leader in e-commerce delivery in the Iberian market is working. CTT is beating the competition, which means it has a superior product. In Portugal, it benefits from a first-mover advantage and synergies with other services.
In Spain, it has a unique differentiating offering - A customs clearance and sorting facility in Madrid that reduces delivery time for customers and saves them costs. This higher quality/lower cost service is an essential competitive advantage for CTT in that market.