Asylum hotel provider in accounting crisis

A travel agency with a £550m government contract to provide hotels and transport for asylum seekers in the UK has been suspended from the Australian Stock Exchange over anomalies in its accounts.

Corporate Travel Management (CTM), one of the largest listed companies in Australia, revealed last week that it will take months to solve the accounting blunder, prompting its latest results to be delayed.

CTM said in a statement to the Australian Stock Exchange (ASX) that auditors at Deloitte and KPMG were tackling the problem and stressed that its new financial year had “started positively”.

But observers were concerned at how long CTM says it will need to tackle the problems and return its shares to trading, which is almost unprecedented for a listed company of its A$2.5bn (£1.2bn) size.

It comes after CTM’s British arm has become a go-to supplier to the UK government in recent years, most notably as the firm behind the Bibby Stockholm barge on the Dorset coast.

The travel agency was involved in the government’s repatriation flights for Britons at the start of the pandemic before organising the hotels when the authorities later began quarantining arriving passengers from abroad.

Ministers have since enlisted CTM to cope with the growing number of illegal migrants coming over the English Channel, with the business tasked with providing accommodation while asylum claims are processed.

Meanwhile, in April this year, CTM landed a fresh £550m four-year contract to provide “contingency accommodation and wraparound services associated with accommodating asylum seekers”.

CTM has said this involves finding hotels and allocating places, and organising transport and meals that are provided by subcontractors.

CTM’s share-trading halt began late last month, when the company said its auditor, Deloitte, would not be able to sign off the accounts by the mandatory end of August deadline.

CTM said the issue related to the company’s European accounts and would require adjustments to “the timing of the recognition of certain revenues and costs” between this financial year and previous ones.

“There is no impact to operating cash generated in FY25 [the 2025 financial year] or past financial years, and this will have no impact on FY26 operations,” the company’s statement said.

Unusually, CTM said it had hired another company, which turned out to be KPMG, to work on the issues alongside Deloitte.

The plan was to publish its accounts on September 25, but last week the company issued a fresh statement saying the task was more “significant” than expected.