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Serko reports $10m loss as corporate travel collapses. What’s next

NZX-listed travel booking and expense management software maker Serko has reported a $10 million first-half net loss – versus an $866,000 net loss a year ago.

Revenue was also hit as the pandemic closed borders, falling to $5.1m from $14.7m a year ago.

Shares closed up 1.82 per cent at $5.60 yesterday, continuing a strong recovery fuelled, in part, by news of the Pfizer and Moderna vaccines.

The stock is now up 21.74 per cent for the year, after falling as low as 89c in March.

The company has been cushioned by a $67m raise, wrapped up in September, and an earlier $17.5m cornerstone investment from US giant Booking.com.

Serko chairwoman Claudia Batten said: “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.

“Amid this disruption, our 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, Batten said.

The shape of the new normal is still emerging.

But one executive, Auckland-based Nura chief operating officer Morgan Donoghue, echoed the comments of many to the NZ Herald when he before March he used to commute to his Melbourne every week. Now, with Zoom and other remote working tools proving far more effective than thought, he anticipated travelling across the Tasman once a month at most once borders reopened.

Serko made its bones in the fifo (fly-in-fly-out) Australian energy sector, however, which will still require regular travel, with mines moving no closer to cities.

In a report released earlier this week, Westpac chief economist Dominick Stephens saw a trans-Tasman bubble from mid-2021 – initially at a modest level, then expanding.

Stephens saw global traveling reigniting from September next year.

Serko gave no profit or revenue guidance for FY2021, but did tell investors at its capital raise that it would slow its burn rate to $2m in the first half and between $2m to $4m in the second half. The net cash burn in the first half came in at 1.8m, 10 per cent under target, despite the company hiring around 40 new staff (for a total of around 270).

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