Serko (ASX:SKO) share price halted amid H1 FY22 results and cap raise

Bookings dot… not today.

| More on:
A man sits in a chair hunched over a laptop and covered head to toe in frozen icicles to represent Envirosuite's trading halt

Image source: Getty Images

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 isn’t going anywhere today following the release of the company’s FY22 half-year results.

The online travel booking and expense management provider’s shares are frozen at $7.42 apiece.

Serko share price on ice following mixed performance for H1 FY22

The Serko share price is in a trading halt after the company delivered its half-year FY22 results for the 6 months ending 30 September 2021. Here are some of the key financial highlights for the period:

What happened to Serko in H1 FY22?

Serko reported a challenging first half of the year, tempered by the impact of COVID-19 on other markets. In addition, the strict lockdowns experienced during the second quarter affected its performance in New Zealand and Australia.

Total travel bookings rose on Serko’s platform to 1.3 million, up 157% from the same period a year ago. The segment was more heavily weighted towards the first quarter, lifted by more limited lockdowns in both counties.

While travel gradually began to recover, the proportion of travel platform versus expense management revenue changed compared to FY21. This resulted in a lower average revenue per booking of $7.38 compared to $8.76 during the full-year FY21.

EBITDA losses amplified, reflecting a slow return to travel globally, combined with an increase in investment in the Serko platform.

The company ended the first half with cash and short-term deposits of $62.3 million, down on the $79.9 million at 31 March 2021. The cash burn over the 6-month period averaged $2.9 million per month. Management continued to prudently conserve cash, whilst balancing investing for revenue-generating opportunities.

What did management say?

Serko CEO and co-founder Darrin Grafton commented on the result:

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. Our focus is now on scaling the business to activate the opportunities we have ahead of us.

We continue to advance our vision of the ‘connected trip’ with enhancements to our product and the addition of new content. These include tools that allow businesses to deliver on their sustainability commitments and better discharge the duty of care they owe to their travellers, such as informing them of COVID-19 protection measures.

What’s next for Serko in H2 FY22?

Looking ahead, Serko is confident that business travel will return over time. It believes that the target of reaching $100 million in revenue in the mid-term remains achievable.

However, the disruptions to global business travel arising from the pandemic and other factors continue to delay the timing.

Serko anticipates full-year revenue and other income of between $21 million and $25 million. This outlook assumes a general reduction of domestic travel restrictions within Australia and New Zealand and no significant lockdowns in Europe or North America.

Serko launches capital raise

In addition to the results announcement, Serko advised it has launched a NZ$85 million (A$81.47 million) equity raise.

The company plans to undertake a NZ$75 million (A$71.89 million) fully-underwritten placement, and a NZ$10 million (A$9.59 million) non-underwritten retail offer.

The offer price is NZ$7.05 (A$6.76) per share, representing a 10.2% discount to the last closing price on 23 November.

Proceeds from the equity raise will go toward a number of activities. These include investing for growth with for Business, developing global marketplace strategy, and accelerating global expansion opportunities.

Adding to his previous comments, Mr Grafton said:

Despite the ongoing impacts of the COVID-19 pandemic on the travel industry, Serko has continued to maintain a strong market position in Australasia, invest in the for Business global opportunity and increase market presence in North America. Serko is now poised to enter the next phase of growth – to scale up and progress our long-term strategy of becoming a global business travel marketplace.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Serko Ltd. The Motley Fool Australia has recommended Serko Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Technology Shares

Man pointing at a blue rising share price graph.
Earnings Results

Megaport share price rises as revenue lifts 40%

Investors appeared to react positively to Megaport's results.

Read more »

a man sits at his desk wearing a business shirt and tie and has a hearty laugh at something on his mobile phone.
Technology Shares

Here are 2 excellent ASX tech shares a top broker says are buys

Here are two highly rated ASX tech shares...

Read more »

A cloud with a blue arrow pointing upwards through its middle symbolising a rising asx share price
Share Gainers

Guess which ASX tech share just soared 40% on takeover news

This small-cap ASX tech share has shot up 40% today.

Read more »

A man leaps through the air with a swimming cap and a look of uncertainty.
Share Gainers

Why is the Appen share price jumping 10% on Monday?

What's going on with Appen shares?

Read more »

A frustrated male investor frowns with his hands and arms open asking why the share price has dropped today
Technology Shares

Why is the Novonix share price having such a lousy start to the week?

The Novonix share price is handing back some of its recent gains.

Read more »

a small child carrying a brief case tries to reach an elevator button outside closed elevator doors.
Technology Shares

Why are Betmakers shares attracting increased short interest lately?

Could this be why more short-sellers are snapping up the stock?

Read more »

Two boys in baskets on skateboards race each along a road.
Technology Shares

Could Afterpay’s global ambitions threaten the future of Zip shares?

Who will win – Afterpay or Zip?

Read more »

Group of people cheer around tablets in office
Technology Shares

These 3 ASX tech shares had a cracking day on the ASX today

Some ASX tech shares were on fire this Friday...

Read more »