Sharechat Logo

Serko brings in in $45m capital raising

Thursday 24th October 2019

Text too small?

Serko said it plans to raise $45 million of new capital to fast-track the roll-out of its Zeno travel management platform and will bring the website owner into the fold as a cornerstone shareholder. 

Booking Holdings will end up with a 4.7 percent stake in Serko and inject $17.5 million of the total capital raised in a $40 million placement at $4.04 a share. Serko staff including chief executive Darrin Grafton and chair Simon Botherway will also sell $16 million at the same price into the placement to institutional investors in New Zealand, Australia, the UK and Singapore. 

The shares last traded at $3.42, after slumping 11 percent yesterday before trading was halted pending the announcement of a capital raising. The halt will stay in place for the placement's bookbuild.

A share purchase plan will be offered to existing shareholders to raise a further $5 million, at either the placement price or the five-day volume-weighted average price, whichever is lower. Serko said it thought the plan would cater to the majority of non-institutional investors. 

Booking Holdings has agreed to expand existing arrangements with Serko as part of the deal to offer and promote the Zeno product. Serko said it expected the new commitments to offer a material boost to revenue from the March 2021 financial year and support its goal of achieving its medium-term goal of generating $100 million of annual revenue. 

"The Serko and agreement will accelerate our journey toward our vision of seamless corporate travel and expanding our growth outside of Australasia," Grafton said in a statement. 

The Booking investment has fishhooks. Serko would have to tell Booking if it received an offer for 50 percent or more of the firm's equity or its assets for an agreed period, and would also restrict Serko from issuing shares to certain parties, none of whom are current shareholders. 

The funds raised will go towards the Zeno roll-out and Serko said it expected to significantly expand its workforce to support the projected expansion. 

Separately, Serko said revenue rose 29 percent to $14.7 million in the six months ended Sept. 30 and affirmed annual guidance for revenue growth of 20-40 percent.

It posted a net loss of $861,000, turning around a first-half profit of $920,000 a year earlier, with earnings before interest, tax, depreciation, amortisation and fair value adjustments down 6 percent to $1.4 million. The bottom line included a $585,000 expense related to earn-outs on its InterplX acquisition. 

Serko had cash and equivalents of $10.3 million as at Sept. 30, with a cash burn of $5.5 million in the first half. It said it expected that cash burn to continue into the second half. 

Botherway said the company expected transactions to grow in the second half as travel management companies completed user testing and converted to pilot customers. 

"However, the timing of uptake by new corporates is unknown and subject to variables," he said.


  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:

Gold Edges Higher After IMF Shaves World Growth Forecast
PaySauce to raise $5.8m, convert notes to equity
Phase One Trade-Deal is an improvement with noteworthy limitations
21st January 2020 Morning Report
Dollar Trims Gain on French Tariff Deal; Oil Rises
Finzsoft blocked from quitting credit unions contract over Christmas
China Unveils Plan to Reduce Single-Use Plastic by 2025
20th January 2020 Morning Report
Rio Tinto reiterates Tiwai position as aluminium prices stay weak
TIL downgrades earnings by up to 40%, suspends first-half dividend

IRG See IRG research reports