Serko share price on watch after coronavirus update

The Serko Ltd (ASX:SKO) share price could come under pressure on Tuesday after providing an update on the coronavirus impact…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Serko Ltd (ASX: SKO) share price will be one to watch on Tuesday following the release of an update on the impact of the coronavirus on its business.

What did Serko announce?

According to the release, the online travel booking and expense management company has been monitoring Australasian travel booking trends closely in light of the coronavirus outbreak.

It notes that year to date, transactions have continued to increase over the prior period. However, over the past week the company has seen a drop-off in bookings, which the company is attributing to a travel decline due to the coronavirus.

The company continues to monitor these trends, but currently expects softer transaction numbers to continue as corporate customers change their travel policies to limit unnecessary travel.

How was the business performing prior to the outbreak?

Prior to last week, Serko had experienced solid growth in the Australasian market from total new business and the transition of existing customers from Serko Online to Zeno.

As of the middle of February, Serko has had an increase of approximately 584 total new corporate customers year-to-date, up approximately 257 customers from the first half of the financial year.

This meant that Zeno transactions were now representing approximately 25% of online booking transactions, up from 15% in October.

FY 2020 guidance.

In May of last year the company provided total operating revenue growth guidance of between 20% and 40% for the year ended March 31 2020.

However, due to the coronavirus outbreak, which is expected to offset some of the solid growth outlined above, management advised that it expects the company to be at or about the low end of its guidance range.

In the meantime, management advised that it continues to apply significant resources towards investing in long-term strategic initiatives. These include the North American roll-out, NDC, complex international faring, and the development of the Booking.com platform.

These strategic initiatives are expected to result in mid- to long-term recurring revenue. Development work to support these initiatives is being prioritised over non-recurring, short-term services revenue.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Serko Ltd. The Motley Fool Australia has recommended Serko Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »