The pandemic has continued to rock the global travel industry, and although COVID has dampened demand and revenue, it has also helped accelerate the opportunity for Serko's technology to manage the emerging complexities of a post-pandemic world.
To take advantage of these opportunities Serko is undertaking an $85 million capital raise to continue investing in the global growth opportunities we have in front of us.
During the past year we have rolled-out our Zeno platform globally in partnership with Booking.com, laying solid foundations for growth in the unmanaged travel sector. We are at the early stages of our journey to globalize as we realise our vision of a business travel marketplace and believe we have only just started to capture the opportunities of both our partnership with Booking.com and the potential of the North American market.
In Australasia we have continued to demonstrate resilience through strong customer retention numbers, in fact our volume during the recovery period in New Zealand was up 160% in June 2021 over 2019 volumes, before lockdowns were imposed.
Serko CEO Darrin Grafton described the progress to date this financial year;
“The significant progress we have made is underpinned by a dedicated team that have stayed focused on the strategy and execution needed in a very complex environment. We have invested in the foundational work that enabled us to commence our global strategy.
We have built a platform that has scaled to handle thousands of customers migrating onto the platform every day and maintained and built a system that has scaled with the demands to date.
We continue to advance our vision of the ‘connected trip’ with enhancements to our product and the addition of new content. These include tools that allow businesses to deliver on their sustainability commitments and better discharge the duty of care they owe to their travellers, such as informing them of COVID-19 protection measures.”
Announcing the raise, Serko Chair Claudia Batten commented:
The COVID-19 pandemic is a rare event that is reshaping the business travel industry landscape, impacting both the suppliers of travel content and services and the evolving needs of business travel buyers.
“This shift is giving rise to consolidation and disruption within the market, and as business travel returns over the coming years, we believe there will be a handful of players who will have an outsized opportunity through the recovery.
“Serko is positioning itself to be a player of global standing that is able to take advantage of these opportunities. We are continuing to invest in the global growth opportunities being presented, notwithstanding the ongoing headwinds of COVID, in the confidence that business travel will resume.
The funds raised will be used to: continue to invest for growth into the unmanaged travel segment through our Booking.com for Business partnership; accelerate the development of our global marketplace strategy, and pursue opportunities for inorganic global expansion.
FINANCIAL RESULTS HIGHLIGHTS
Total operating revenue increased 81% to $9.2 million from $5.1 million, while total income increased 16% to $9.9 million from $8.5 million.
Total travel booking volumes rose 157% to 1.3 million from 0.5 million, lifted by limited lockdowns in Australia and New Zealand during the first quarter, and new Booking.com for Business transactions.
Product design and development expenditure increasing 52% to $13.4m.
Overall operating expenses grew a little more slowly at 42% to $25.3m.
The higher investment resulted in a 50% increase in the net loss to $15.2m.
Serko ended the period with cash and short-term deposits of $62.3 million, down on the $79.9 million at 31 March 2021. As noted earlier the cash burn over the six-month period averaged $2.9 million per month, within the $2 million to $4 million guidance range.