Serko shares climb 3.1% after lifting first-half earnings guidance
By Sophie Boot
Oct. 10 (BusinessDesk) - Serko shares rose 3.1 percent after the online travel booking software firm said it expects
first-half trading revenue to be at the top end of previous guidance, and reiterated it is expecting to post a maiden
annual profit.
Serko said trading revenue was about $9.1 million in the six months to Sept. 30, up 30 percent on the previous first
half and at the top end of the 25 percent to 30 percent guidance it previously gave. Total income, which includes
grants, is expected to be $9.6 million.
The company is forecasting first-half earnings before interest, tax, depreciation and amortisation (ebitda) of $1.3
million, versus a loss of $1.8 million in the prior year, and expects a before-tax profit of $1 million in the first
half compared to the previous first half's $2 million loss.
Serko reiterated its forecast to run a profit in the year to March 31 versus a loss of $3.3 million in the 2017
financial year. It's expecting annual trading revenue between $18 million and $19 million.
Chief executive Darrin Grafton said the company is "enjoying accelerating momentum" with online transaction volumes up
21 percent from a year ago, ahead of the 18 percent annual growth rate in FY17. The company is also benefitting from
growth in revenues from non-core services such as hotel bookings and airport transfers, he said.
The stock rose 3.1 percent to 67 cents and is up 124 percent this year, having spiked to a 1 1/2-year high in July after
giving guidance on its expected first half.
While Serko had warned the second half of the year is typically weaker, Grafton said the company said it still expects
trading revenue to be between 25 percent and 30 percent ahead of the previous second half.
In 2014, the company raised $17 million selling shares at $1.10 apiece and existing investors sold a further $5 million
into the offer, however, the stock has been punished as a slowing Australian economy and late product launches weighed
on Serko's revenue. Serko then raised $8.1 million from institutional and existing investors at 84 cents apiece in late
2015, having previously signalled it didn't plan to go back to the market after its June 2014 initial public offering.
In March it said its existing Callaghan Innovation grant has been extended for a further two years, to June 30, 2019,
with an additional value of $2 million. The new funding is an extension to a previous $4.2 million Callaghan Innovation
research and development growth grant. The additional funding is being used to develop predictive technology, it said.
(BusinessDesk receives assistance from Callaghan Innovation to cover the commercialisation of innovation.)
(BusinessDesk)
ends