New Zealand-based travel and expense management provider
Serko plans to raise NZ$85 million – about €52 million – to grow its business,
particularly in the unmanaged travel segment, and "pursue opportunities
for inorganic global expansion", the company said Wednesday in its
half-year financial results announcement.
The capital will come from issuing NZ$75 million in ordinary
shares to new investors as well as a NZ$10 million retail offer to existing
shareholders letting them subscribe to up to NZ$50,000 in new shares. Serko has
halted trading on the Australian and New Zealand stock exchanges and plans to
complete its capital raise before the end of the year.
About 40 per cent of the new capital is earmarked for
developing Serko's "global marketplace strategy", especially driving
growth in North America. Serko reported an average monthly growth of more than
10 per cent in transaction volumes from May through September in North America
and reports an increase in inquiries for its Zeno tool in the region, including
"multiple requests to participate in [requests for proposals] by Fortune
500 companies".
Serko plans to invest to grow its Booking.com business,
targeting unmanaged business travel, with about 35 per cent of the raised
capital. Serko has moved more than 300,000 Booking.com for Business customers
onto the Zeno platform and reported more than 30,000 new sign-ups for the
platform since its launch. It also is "progressively" adding flight
and rail content to the platform.
About a quarter of the raised capital will go toward
"potential acquisition opportunities, if and when they arise",
according to Serko.
"We are poised for growth out of this pandemic, and the
investment to date has proven our ability to grow from a regional leader to a
truly global player," Serko chief executive and co-founder Darrin Grafton
said in a statement. "Our focus is now on scaling the business to activate
the opportunities we have ahead of us."
For the first half of its fiscal year, ending 30 September,
Serko reported NZ$9.2 million in total operating revenue, an 81 per cent
increase compared with the first half of the previous fiscal year. Total
bookings on Serko's platforms were up 157 per cent to 1.3 million over that
period, as the strict lockdowns in Australia and New Zealand became more
limited and the Booking.com for Business transactions came online. The average
revenue per booking for managed business travel declined to $7.38 from $8.76
compared with the previous fiscal year, which Serko said was a result of
increased travel that changed its revenue mix.
Within the Australasia region, the number of active
corporate customers on the platform ranged from a high of 5,249 in May to a low
of 3,443 in September. Prior to the Covid-19 pandemic, Serko had more than
6,800 active corporate customers on the platform.
For the full fiscal year, Serko expects revenue to range
between NZ$21 million and NZ$25 million, which "assumes a general
reduction of domestic travel restrictions within Australia and New Zealand and
no significant lockdowns in Europe or North America". Serko reported a net
loss of NZ$15.2 million for the first half of the fiscal year, a broader loss
than the NZ$10.1 million from the first half of the previous fiscal year due to
a "planned increase in expenditure to capitalise on the significant
opportunities for Serko's expansion into international markets". according
to Serko.