CORRECT: Serko in the black as first-half revenue climbs 30%, eyes global expansion
(Removes erroneous reference to capital raise in 6th paragraph)
By Paul McBeth
Nov. 22 (BusinessDesk) - Serko generated a first-half profit as the online travel booking software developer boosted trading revenue 30 percent and reined in spending, and is stepping up plans to launch in new international markets.
The Auckland-based company reported a net profit of $1.1 million, or 1 cent per share, in the six months ended Sept. 30, turning around a loss of $2.1 million, or 3 cents, a year earlier. Trading revenue climbed to $9.1 million from $7 million a year earlier, while operating costs dropped 12 percent to $8.5 million as the company clamped down on spending and cut staff numbers.
Serko has found favour with investors this year with its stock soaring 372 percent to $1.37 as it raised earnings expectations and signed up new partners, most recently with ATPI Group to deploy the Kiwi firm's technology worldwide.
"It has been a gratifying six-month period," chair Simon Botherway said in a statement. "Serko is well on its way to recording its first full-year profit and we are now looking forward to making progress on the next phase of our growth plans, to expand our presence in the Northern Hemisphere markets."
Serko affirmed annual guidance for total operating revenue to be between $18 million and $19 million in the year ending March 31, 2018, and said operating expenditure will increase with its plans to expand the business in the Northern Hemisphere.
The company generated an operating cash inflow of $304,000 in the six-month period, compared to a $2 million outflow a year earlier, and after $170,000 of investment spending, held cash and equivalents of $4.6 million as at Sept. 30.
About 90 percent of Serko's revenue was recurring revenue, and its annualised transactional monthly revenue - a favoured measure among software companies - was $17.8 million as at Sept. 30, up from $15.3 million at the end of March.
The company scaled back spending on research and development, which was down 24 percent to $2.4 million, or 26 percent of revenue. That saw government grant income to support R&D drop to $499,000 from $594,000 a year earlier.