Serko Limited (NZX/ASX:SKO), a leader in online travel booking and expense management for the business travel market, today reports financial results for the six months to 30 September 2020 and reiterated its plans to move quickly on the opportunities arising from the changing travel market.
Last month’s successful capital raising, which saw the Company raise NZ$67.5 million of gross proceeds, has positioned Serko to build to the future of the business travel industry.
“The COVID-19 pandemic is reshaping all parts of the business travel industry, from the suppliers of business travel content and services through to the needs of the business traveller" said Serko Chair Claudia Batten. "Amid this disruption our Travel Management Company (TMC) resellers and partners recognise the pivotal role Serko’s solutions and relationships can play in managing the disruption and preparing for the recovery. The capital recently raised, combined with our existing cash balances, position us well to scale-up to meet this demand and execute on our strategic priorities, positioning Serko for growth when business travel normalises.”
Serko Chief Executive Darrin Grafton commented:
“We are committed to supporting our partners through this period of change and accelerating our drive to transform business travel and expense management globally. Through our capital raising, our shareholders have backed Serko to execute on this plan.”
Serko reported booking trends in the New Zealand market gave an indication of the rate of recovery for domestic business travel once restrictions are lifted, with domestic transaction volumes at 76% of the prior year period, while Australia is at 26% of the prior period. With travel restrictions being progressively eased, the anticipated recovery of domestic travel, particularly in Australia, is expected to be the principal driver of transaction volumes and revenues returning to more normalised levels.
In addition, Serko’s partnership with Booking.com continues to offer growth opportunities for Serko, particularly among small and medium sized businesses. Notwithstanding the COVID-19 pandemic, the potential large-scale roll-out gives Serko the opportunity to access to a much larger addressable market as travel activity recovers over time.
The new Booking.com for Business platform powered by Zeno went live in May 2020, with pilot programs implemented across the United Kingdom and Ireland. A pilot was also launched in Germany in early September 2020.
It is expected that new customers wishing to set-up a business account on the Booking.com website will be directed to the new Booking.com for Business platform powered by Zeno in select Northern Hemisphere markets imminently.
Serko reported total operating revenue for the six-month period was $5.1 million compared to the estimated range of $4.5 million to $5.0 million stated in the capital raising documentation. This was 66% lower than the same period in the prior year of $14.7 million following COVID-19 pandemic travel disruptions.