Serko surges 20% on Expedia deal

Wednesday 19th August 2015

Serko shares have jumped 20 percent from a record low, after the travel booking software firm announced a deal with US based hotel finding website Expedia.

The shares climbed 15 cents to 90 cents, rebounding from a record low of 75 cents at yesterday's close. That's still below Serko's initial public offer price of $1.10 in June last year, when it raised some $17 million in new capital, with a further $5 million worth of existing shares also sold into the offer.

The Auckland based company announced it has entered a new strategic partnership with the Nasdaq listed Expedia, opening up a new revenue stream for Serko. The deal allows Serko customers to search and book Expedia and Wotif sites through its online booking tool. The company didn't put any dollar figures around the boost to sales.

"Expedia has a very good reputation and it's a big name, so normally when any New Zealand company announces a connection with a blue chip or a big cap stock it does have a positive influence on it, whether it is warranted or not," said Grant Williamson, a director at broking firm Hamilton Hindin Greene. "There's really been nothing much in the way of positive news, and I suppose this is the first that the company has come out with in recent times."

In May, the company widened its annual loss to $6.4 million in the year ended March 31, while reporting revenue of $10.4 million, below its prospectus forecast of $11 million, blaming delays in the timing of some services.

Expedia, which includes Hotels.com, trivago and Wotif among its hotel comparing and booking websites, reported net income of US$398.1 million in the year ended Dec. 31, 2014 on annual sales of US$5.8 billion. Earlier this year it announced plans to acquire rival Orbitz for US$1.3 billion in a bid to reclaim the lead in global online travel bookings from Priceline Group and fend off newer competitors such as Google.

Expedia shares last traded at US$123.32.

BusinessDesk.co.nz

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