Serko's annual loss widens, targets profitability in 2017
Serko's annual loss widens, targets profitability in 2017
By Paul McBeth
May 22 (BusinessDesk) -
Serko, the online travel booking business, reported a wider
annual loss in line with its prospectus forecast, while
delivering slower growth in sales than anticipated, and is
targeting profitability in the first half of 2017.
The
Auckland-based company posted a net loss of $6.43 million in
the 12 months ended March 31, more than the $6.33 million
forecast in offer documents when the company was floated
last year. Sales rose 55 percent to $10.4 million, about 5.8
percent below the prospectus forecast and in line with
Serko's warning in March that it would miss that
target.
Serko has previously said some billable services won't be recognised until the 2016 financial year, while delays to its mobile app will weigh on revenue. The company cut its revenue forecast for the first half of 2016 to between $7.5 million and $8 million, from the $8.3 million target in the offer document, and said it expects annual revenue of between $16 million and $18 million.
"Revenue in the second half is expected to
accelerate as these new and refreshed products gain
traction," Serko said in a statement. "The company
anticipates moving into profitability in the first half of
FY17 within existing cash resources."
When Serko
listed in May last year, chairman Simon Botherway said the
company forecast losses over an 18-month horizon, and
expected to have a positive cash flow by the end of
2016.
Last year Serko raised $17 million in new
capital selling 15.5 million new shares at $1.10 a piece,
via an initial public offering to fund its growth ambitions
and repay debt. Founders Darrin Grafton and Bob Shaw sold a
further $5 million worth of shares into the offer, retaining
about a 20 percent stake and have agreed not to sell any
more shares until two days after Serko announces its 2016
annual result.
The shares were unchanged at 87 cents,
and have dropped 24 percent this year.
The company's cash balance was lower than the offer document forecast by $400,000 at $4.5 million, and the operating cash flow of $6.6 million was more than the $5.9 million projected.
Earlier this month, Serko bought Expedia's Arnold Travel Technology which it said would lift sales by between 7 percent and 8 percent in the six months ending Sept. 30, and the financial statements show the company paid A$100,000, and assumed liabilities of A$102,345.
(BusinessDesk)