Pretty good announcement this morning:
MKTUPDTE: SKO: Serko Updates Market Guidance on Signing Flight Centre LOI
Serko Updates Market Guidance After Signing Letter of Intent with Flight
Centre Travel Group
Serko Limited (NZSX:SKO, ASX:SKO, 'Serko'), a leader in online travel booking
and expense management for business, today announced it has signed a Letter
of Intent (LOI) with Flight Centre Travel Group (FCTG) and raised its FY19
guidance range for revenue growth to 20% - 30% above FY18 (from 15% -30%
previously).
The LOI commits the parties to endeavour to negotiate a contract variation
incorporating the agreed principles set out in the LOI, intended to be
effective 1 September 2018, which would extend the existing partnership with
FCTG's corporate brands across Australia, New Zealand and Asia through to
April 2022 at a minimum, and also includes an expansion in territory across
North America to include USA, Canada and Mexico.
Under the LOI, Serko is immediately entitled to receive an ongoing
development contribution from FCTG through to April 2019, at a minimum. This
will enable FCTG to launch a unique product based on Serko's latest online
travel management technology.
This commitment, along with other Travel Management Company (TMC) agreements
previously signed by Serko and announced to the market, is expected to result
in an uplift in revenue in the second half of FY19. As a result, Serko raises
its FY19 guidance range for revenue growth to 20% - 30% above FY18 (up from
previous guidance of 15% - 30%).
In the event that a binding contract variation is agreed based on the
principles set out in the LOI, we expect that the FCTG relationship will
deliver further revenue growth in FY20 year as we recognise the full trading
benefit of the geographic expansion and implementation of the new technology.
Serko will provide a further update on performance and progress for the FY19
year at the Annual Shareholder Meeting to be held on 22 August 2018.
Ends
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