Wednesday 24th November 2021
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Serko (NZX & ASX:SKO), a leader in travel and expense management for business, today announces financial results for the half year to 30 September 2021 showing the company investing for the global opportunities emerging as travel markets recover from COVID-19.
It also announces the launch of a $85 million capital raise to continue to execute on its global growth strategy. Serko plans to raise the capital via the issuance of ordinary shares in Serko by way of a NZ$75 million fully underwritten placement and a NZ$10 million non-underwritten retail offer.
The funds raised will be used to: continue to invest for growth into the unmanaged travel segment through our Booking.com for Business partnership; accelerate the development of our global marketplace strategy, and pursue opportunities for inorganic global expansion.
“Despite the ongoing disruption that is being seen in international travel markets, we remain very excited about the opportunities we see and remain confident in the return to business travel over time. We believe our target of reaching $100 million revenue in the mid-term remains achievable, but this revenue target has continued to be delayed as a result of the pandemic,” Darrin Grafton said.
“The disruptions to global business travel arising from the pandemic and other factors continues to make it challenging to determine the timing of realisation of revenues from these opportunities.
“Earlier in the year, when lockdowns in Australia and New Zealand were lifted, domestic travel activity resumed quickly, and we therefore expect to see similar trends play out in these markets as we reach high vaccination levels and following the adoption of a ‘live with’ policy. We have already seen an uplift as a result of the recent easing of travel restrictions within Australia, with transactions in the first half of November averaging over 52% of pre-COVID levels.
“We are in discussions to actively establish growth in North America and, while sales cycles tend to be relatively slow in this market, we believe the market continues to provide a significant growth opportunity over time and as business travel resumes.
“We are excited to embark on the next phase of the multi-year journey to activate and engage Booking.com for Business customers as they return to travel, and to fully realise the potential of the partnership with Booking.com.
“Serko anticipates full-year revenue and other income of between $21 million and $25 million. This outlook assumes a general reduction of domestic travel restrictions within Australia and New Zealand and no significant lockdowns in Europe or North America. The assumptions underlying these expectations are subject to variation and are detailed in the accompanying investor presentation. At the lower end of the revenue range average monthly cash burn in the six months to 31 March 2022 is expected to average close to $4.0 million as investment is accelerated.
“As announced today, we are raising capital to allow us to invest to capture the growth opportunities we continue to see in each market and realise our vision of transforming from an online booking tool into a global marketplace, while retaining a prudent cash buffer to protect against a slower than expected COVID19 recovery and other uncertainties.”
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