SKO
20/11/2014 08:30
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REL: 0830 HRS Serko Limited
HALFYR: SKO: Serko FY15 Interim Results Announcement
Market Release
20 November 2014
Serko FY15 Interim Results Announcement
On track to achieve full-year financial forecasts
- Total revenue growth of 50% 1
- On line transaction based revenue up 36% 1,2
- On line transactions increase by 32% 1
- Serko Mobile in pilot phase
- Strong pipeline of new business commitments for FY16
- Accelerating headcount plans to support additional growth
Serko Limited (NZX:SKO) today announced its results for the six months to 30
September 2014. Revenue and losses for the period were $4.7 million and ($3.6
million) respectively and are in line with expectations. Cash held at 30
September 2014 was $8.3 million.
During the period Serko experienced growth in online bookings in line with
expectations. Online transactions grew by 32% compared to the same period in
FY14. Monthly run-rate growth, which is a comparison of transactions for a
month against the same month last year, is accelerating and reached 59% in
September 2014.
Serko Chief Executive Officer Darrin Grafton said "Serko is currently
on-track to achieve the financial forecast for the 12 months to March 2015
included in the prospective financial information (PFI) contained in the
Prospectus. 3
"We continue to build a strong pipeline of committed new business through
existing and new Travel Agent 4 resellers. Engaged and motivated Travel
Agents are key to Serko's long-term growth in Australasia and the rest of the
world.
"A partnership between Serko's online expense management platform, Incharge,
and Discover Group (Diners) was announced in July and will help to drive the
growth of that product line. Work to integrate Serko Online, the online
booking platform, and Incharge continues behind the scenes and we look
forward to seeing more integrated offerings announced in the near future.
"Operationally, we have made good progress scaling up the business since the
Initial Public Offering (IPO). Total employees in Serko's offices worldwide
were 118 at the end of the period, with another 13 new starters contracted to
join. Growth has been focused predominantly in our Sales, Operations and
Technology teams. Serko was awarded a further Research and Development grant
worth up to $4.2 million over three years in October 2014 and we will use the
funds to help boost our innovation and delivery capabilities.
"Serko Mobile, our flagship new product, has commenced commercial trial, with
a full commercial launch planned for February 2015. The product has already
garnered significant interest from overseas markets, with nuTravel, a leading
US travel technology provider, signing a three year reseller deal for the
technology.
"We remain convinced that mobile is right at the core of our industry
transformation strategy and plan to continue substantial investment in this
space.
"At a macro level, the global market for travel technology remains strong and
is experiencing a level of consolidation. The acquisition of our main
competitor Concur by SAP in October 2014 is a clear demonstration of the
value inherent in the market.
"It's also appropriate to refer to the Ebola outbreaks in the context of the
risk it could present to the travel industry in our region and to Serko's
business. At this stage we have not detected or been made aware of any
material impacts to corporate travel in the Australasia and South East Asian
markets. However, we are closely monitoring the situation with our Travel
Agent partners."
Outlook:
In respect of Serko's outlook, Mr Grafton said: "In our Investment Statement,
we also provided forecasts for the six months to September 2015. Based on our
current pipeline of business alone, the outlook for this period looks
promising. However, as we highlighted at the Annual Meeting in August the
timing of new contract implementation delivered from our sales pipeline is
dependent on client and reseller readiness to on-board, which makes it
difficult for Serko to forecast revenue growth with precision. In other
words, we are confident that we have secured the business but we cannot be
certain of the exact timing of the transition of that business to our
platform.
"In addition, Serko is now actively involved in a number of significant
discussions concerning our mass movement "Groups" technology. These involve
major global companies in the Mining, Energy & Resources sector in Australia
and also the US. Our unique patented technology offers a compelling business
case to these businesses. To date Serko has secured numerous clients in the
Australian mining sector, but the potential to extend this product to new
markets such as North America represents significant future growth potential
for Serko.
"Moreover, we are seeing interest in our online and mobile technology from
Travel Agents in the US market.
"These two developments indicate that there is an opportunity to grow the
business in the US. This may result in deployment of resources to North
America in addition to Asia and we are currently considering how best to
undertake such an expansion of the company's footprint.
"We also expect to sign additional mobile reseller or 'white-label'
agreements in the future.
"In light of the above, we have made a decision to accelerate elements of our
headcount plans to support these additional growth opportunities.
"The second half of this financial year promises to be an exciting and
pivotal period for Serko and we believe we are positively positioned to
continue to grow strongly into the future."
ENDS
For more information contact:
Tim Bluett, Chief Financial Officer, Serko
+64 9 309 4754
[email protected]
About Serko
Serko is Australasia's leading online travel booking and expense management
company for businesses and is listed on the New Zealand Stock Exchange Main
Board (NZX:SKO). Headquartered in Auckland, New Zealand and with offices in
Sydney Australia, Xi'an City China and Gurgaon, India, Serko currently
employs 118 people worldwide.
Serko Online is an integrated Online Booking Tool (OBT) used by
administrators and travellers to book flights, accommodation and car hire
from the broadest possible set of travel providers. The OBT ensures that
travel bookings comply with corporate travel management policy without
limiting the users choice of travel provider.
Visit www.serko.com for more information. Serko's interim results are
available for downloading from Serko's website at
http://www.serko.com/investor-centre/.
1. Comparing the six months ended 30 September 2014 to the six months ended
30 September 2013
2. Excluding usage based revenue from Serko Incharge, an expense management
application
3. Registered on 26 May 2014
4. Also known as Travel Management Companies or TMCs
End CA:00257861 For:SKO Type:HALFYR Time:2014-11-20 08:30:07
