Key Points
- Currently, the Serko share price is hovering near a 52-week low of $4.59
- Unfavourable trading conditions impacting business performance with business travel volumes down
- Adjusted FY22 revenue guidance of between NZ$18 million to NZ$20.5 million
The Serko Ltd (ASX: SKO) share price is tumbling today following the company's announcement of a trading update.
The online travel booking and expense management provider's shares are down by 5.51% to $4.63.
Serko signals tough trading conditions
In its statement, Serko advised challenging trading conditions since the release of its FY22 half-year results on 24 November.
The company stated that the Omicron variant has continued to disrupt business travel volumes across the globe. This is expected to lead to reduced revenues that were previously forecasted for the full-year ending 31 March 2022.
However, to ensure enough liquidity on the company's balance sheet, management undertook a capital raise in 2021. The funds are being used to innovate Serko's global offering and expand its revenue base through the acquisition of new customers.
While business travel volumes are normally down during the holiday months of December and January, booking numbers have fallen even further due to COVID-19.
However, on a positive note, last week the booking.com for business has recovered to around 90% October 2021 levels. This is in particular for the Australian and New Zealand markets.
As a result of the ongoing volatility, Serko adjusted its FY22 revenue guidance range between NZ$18 million and NZ$20.5 million. In contrast, the company previously forecasted revenue guidance of NZ$21 million and NZ$25 million.
Management noted that the lower end of the range reflects a drop in revenue over last week's volumes for February and March.
In addition, the higher end represents a gradual improvement in transaction numbers driven by normal seasonality.
The company is predicting an average monthly cash burn of almost $4 million in the six-month period to 31 March. This is in line with earlier guidance provided to investors in November 2021.
Serko share price snapshot
In the last 12 months, the Serko share price has fallen by 10%. Although, when looking at year to date, its shares are down by more than 25%.
Having reached an all-time high of $8.15 in September, Serko shares are now close to their 52-week low of $4.59 today.
