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Serko confirms 10% gain in first-half sales, net loss narrows as costs fall

Wednesday 23rd November 2016

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Serko, the online travel booking company, confirmed a 10 percent gain in first-half sales and narrowed its net loss as costs fell.

The loss was about $2 million in the six months ended Sept. 30 from a loss of $3.4 million a year earlier, the Auckland-based company said in a statement. Sales rose to $7 million from $6.4 million, while operating expenses fell to $9.7 million from $10.6 million.

The company first flagged its results on Oct. 26, while affirming it was on track to breaking even in the first quarter of 2018 and wouldn't need to seek more capital. Today it said online bookings grew 17 percent from a year earlier although the strong kiwi dollar against its Australian counterpart partly accounted for a more modest gain in revenue.

Serko shares last traded at 35 cents, having sold in its 2014 initial public offering at $1.10 apiece. The stock has declined 61 percent this year.

Darrin Grafton and Bob Shaw each own about 17 percent of the company, which grew out of Interactive Technologies, a business they set up in 1994 before creating its main Serko Online product in 2000. This later became part of Gulliver’s Travel Group, which listed on the ASX and NZX before being acquired by Australia’s S8 in 2006, which was then swallowed up by MFS. Shaw and Grafton purchased the Serko assets from MFS in 2007. Chairman Simon Botherway owns about 2.8 percent of Serko.

Serko said partners of its Travel Management Co had advised of  "a pipeline of new customers expected to onboard onto Serko Online in the second half of FY17". It expects to have a net cash balance of between $3 million and $4 million at March 31 next year, giving it enough funds to reach breakeven early in the 2018 year.

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