Auckland, New Zealand. 23 May 2017 – Serko Ltd. (SKO.NZ), a leader in online travel booking and expense management for business, today announced it is on-track to generate profit for the current financial year as it consolidates its position as the Australasian market leader in corporate travel and expense management solutions, and readies itself for expansion.
Serko announced its financial results for the year to 31 March 2017, which show continued growth in revenues, sharply narrowing losses in the second half, and ongoing investment in the development of the company’s travel and expense management platforms.
Total revenue for the year to 31 March 2017 rose 9% to $14.3 million from $13.1 million in the prior year, including $12.9 million from the Serko Online and Serko Expense platforms, as well as service revenue from customised development work.
Total income, which includes research and development grants, rose 7% to $15.4 million from $14.4 million in 2016. Revenue growth in the current financial year was adversely impacted by the strength of the New Zealand dollar against the Australian dollar, as Serko’s contracts are predominantly in Australian dollars.
Annualised Transactional Monthly Revenue (ATMR) for March 2017, an indicator of recurring revenues from the Serko products projected on an annual basis, stood at $15.3 million, a 37% improvement on the $11.2 million for the same month a year ago.
Serko’s annual net loss before tax narrowed by 44% to $3.3 million from $5.4 million in the prior year. EBITDA losses narrowed by 53% to $2.5 million from $5.4 million in the prior year. This was due to increased transaction volumes, careful management of operating expenses, and the benefits achieved by integrating the Arnold platform. Overall expenses declined by 10% to $18.8 million from $20.7 million a year earlier.
Serko Chairman, Simon Botherway, said, “Serko, which this year celebrates its ten-year anniversary, has made strong progress over the last financial year. With more than 50% of all corporate travel in Australasia now booked through the Serko enterprise platform, we are clearly the leading solution in our home market. Contrast this result with the company's performance just six years ago; today we process the same volume of transactions per month as we did for the total 2011 year. It is clear we have come a long way and the team is justified in being proud of its achievements.”
Travel Management Company (TMC) on-boarding of new corporate customers was a key driver of Serko’s growth and contributed to the increase in transaction volume for Serko Online and increase in corporate customers using Serko Expense. This growth is expected to continue into FY18 with a strong pipeline of new customers expected to join Serko’s platform.
Serko signed an agreement with Sabre Corporation, North America’s largest provider of global airline bookings, to replace its proprietary online booking tool in Australasia (Sabre Online) with a new tool based on Serko Online.
Serko also signed agreements with the Helloworld and Magellan Travel Group TMCs. These agreements have extended Serko Online to a potential 50+ new TMCs.
Serko successfully introduced new content such as Expedia, Wotif and Booking.com to its platform. Commissions on this new content grew over 900% and are on-track to contribute significantly to Serko’s FY18 results. Serko has also signed with new content providers Hotel Hub and HRS, and their content will be available in FY18.
In addition, Serko is winning expense work as customers increasingly look for combined expense and travel platforms, with sales in this product-line increasing 14% over the prior year.
Serko CEO, Darrin Grafton, said, “Over the last 12 months, we have concentrated on a three-pronged strategy towards the goal of: growing our customer base; increasing average revenue per booking (ARPB); and delivering market-leading technological innovations to underpin our platform for global expansion. We have made good progress on all three fronts. With our Australasian corporate travel business now firmly established, we are looking to drive uptake on the small business platform, serko.travel, and expand into new markets through strategic partnerships.”
In July 2016, Serko launched its platform for small and medium enterprises (SME), serko.travel. serko.travel is a self-service system that uses the Serko Online booking technology, allowing users the opportunity to reduce travel management overheads and utilise the services of the Helloworld and Flight Centre TMCs - if needed, on a pay-per- use basis. Users incur no initial booking fee on serko.travel. Instead, Serko generates revenue from the sharing of commissions. The system also integrates with Xero to streamline the process of reconciling travel-related expenses.
Serko is continuing to broaden its user-base for the serko.travel platform via white-labelling (own branded) arrangements. Helloworld and Flight Centre will launch their own white-label versions of serko.travel to support their SME businesses during 2017. Serko intends to further grow uptake of the platform by sharing revenue with partners that have strong relationships with significant SME customer bases. Through these partnerships, the serko.travel platform will also be rolled out to customers in Hong Kong and Singapore.
In addition to the launch of serko.travel, key product developments in the year included: the predictive booking workflow for Serko Mobile in September 2016; the upgrade of Serko Mobile in December 2016 allowing users to submit expenses directly from their phones; and the development of Serko Zeno. Serko Zeno is an integrated travel and expense platform with cutting-edge technology, offering a door-to-door travel experience utilising a predictive recommendation engine that enhances usability, reduces transaction times, and drives corporate cost savings. Serko Zeno is expected to launch later in the current financial year and will be offered as a premium solution alongside the existing Serko Online product.
“Serko is in a strong position and is looking to the remainder of the current financial year and beyond with confidence. Transactional revenue is expected to grow, we expect growth in content revenue as additional content providers are added to the platform, and we expect Serko Zeno to begin to contribute to revenue later in the current financial year. We expect to achieve sustainable cash-flow for the current financial year and record positive earnings for the full-year and we have sufficient capital to fund our growth initiatives”, added Grafton.
Louise Caldicott, Porter Novelli, for Serko
Phone: +61 2 8987 2112
On Linkedin: http://www.linkedin.com/company/serko-ltd
On Twitter: https://twitter.com/SerkoOnline
Serko is Australasia’s leading online travel booking and expense management solution provider and is listed on the New Zealand Stock Exchange Main Board (SKO.NZ). With its HQ in Auckland New Zealand, and offices in Sydney Australia and Xi’an City China, Serko employs more than 100 people worldwide.
Serko Enterprise, which includes integrated travel and expense management capability, is used by more than 6000 organisations and is sold by most Travel Management Companies in Australasia.
serko.travel is Serko’s small and medium enterprise proposition targeting companies in Australia and New Zealand with less than 150 employees. It allows smaller organisations to self-onboard and make/change bookings online at no cost 24x7.