Recommendation

1. Serko (ASX: SKO)

Also from NZ, Serko is a travel-management and expense-technology company. Serko listed on NZX in 2014 and dual-listed on ASX in 2018.

Serko was a market darling for a time, drawing comparisons with Xero, another star NZ-founded tech company. Millions of people book corporate travel using Serko software.

In May, Serko reported total income of $48 million for FY23, just ahead of its revised guidance range of $42-$47 million. Strong growth from Booking.com (Serko has a strategic partnership with Booking Holdings) underpinned the result.

Serko is growing quickly. The company said it anticipated total income of $63-70 million for FY24 and confirmed its goal of $100 million in income in FY25.

The company said in May: “Business travel demand is tracking strongly, and Serko is well positioned to deliver increased scale and operational efficiency.”

Serko shares leapt by about 30% after its better-than-expected FY23 result. But at A$2.92, Serko is well down on its 52-week high of $3.92. The stock briefly traded at almost $8 at its peak in October 2021 as travel demand roared back to life.

At $2.92, Serko is capitalised at $355 million. The company had $88 million in cash – and no debt – at the end of FY23. In another good sign, Serko said its underlying monthly cash-burn rate peaked in the first half of FY23.

Judging by Serko’s share price over 12 months, the market expects growth in business travel to slow as companies cut costs, amid a weakening global economy.

Long-term, Serko has a strong position in cloud-based solutions that help corporates manage their travel and expense programs – and many avenues for growth.

As global tech stocks rally, the market might pay more attention to Serko, believing the recovery in business travel after COVID-19 has further to fly.