Sharechat Logo

Serko to raise $15M at 3.2% discount to accelerate growth, mulls acquisitions

Tuesday 7th August 2018

Text too small?

Serko plans to raise $15 million selling shares at a 3.2 percent discount to institutional investors to speed up its growth trajectory having already raised revenue guidance. 

The Auckland-based online travel booking software developer will sell 5.5 million shares, or about 7.3 percent of the company, at $2.75 apiece to investors in a fully underwritten placement, it said in a statement. The funds raised will go towards bolstering working capital, which it said will give it more flexibility to speed up organic growth and close potential acquisitions. 

Those funds will support "undertaking investments to drive revenue growth such as establishing sales and support functions in new international markets" and "accelerating product development and integration of local content and functionality in international markets which are required in order to appeal to a wider range of travel management companies (TMCs) and corporate users," it said. 

The placement, which is underwritten by Deutsche Craigs, comes just a week after Serko raised its revenue expectations for the year ending March 31, 2019 for sales growth of 20-to-30 percent on 2018's $18.3 million. It had previously predicted sales growth of 15-to-30 percent. 

Serko posted its maiden profit in 2018 and has started expanding into the Northern Hemisphere where it sees new opportunities. Its shares have been in uncharted territory as investors were impressed by the successful execution of its plans last year, rising 30 percent so far this year which has seen it complete a secondary listing on the ASX. 

The company today said the funds raised could go towards acquisitions, which it would want to "deliver additional customers, development capability and in-market infrastructure, facilitating and enhancing the pace of Serko’s expansion into new geographies". 

Shares of Serko have been halted for the placement and are expected to resume trading tomorrow. 

The company held cash and equivalents of $5.2 million as at March 31, generating a positive operating cash flow in the year of $1.4 million, compared to an outflow of $1.6 million a year earlier. The board has a policy of maintaining strong cash reserves and in its annual report, said directors would "monitor Serko’s capital requirements in light of the funding needed to execute growth opportunities both organic and inorganic.". 


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Heartland's 1H profit dampened by restructuring, accounting changes
Hallenstein seeks new CEO; shares fall
Tower affirms earnings guidance, notes increased digital upgrade cost
NZME targets positive earnings from paywall in 2 years; profit falls
Precinct raising $150M from an underwritten placement and retail offer
NZ dollar dips from 13-day high as US holiday keeps markets quiet
February 19th Morning Report
NZ dollar rises on optimism for China-US trade deal
Steel & Tube recovery to include $5.6M of 2nd-half cost savings
Open Country challenges validity of Fonterra's 2018 milk price

IRG See IRG research reports