Serko's annual loss widens, targets profitability in 2017
Auckland-based online travel firm Serko has reported a wider annual loss in line with its prospects forecast, while reporting total revenue of $10.4m, up 55%.
“While we are in growth and have a strong base to continue this, we made a loss of $6.4m for the year but expect to be in profitability in the first half of FY17,” explains Darrin Grafton, chief executive of Serko.
Serko’s core product Serko Online experienced growth in transactions in line with forecasts. In the second half of the year transactions increased by 57% compared to the second half of FY14, and the 32% growth reported in the first half. Serko Online revenues increased by 62% in total for the year.
Serko’s online expense management platform, Incharge, contributed revenues in its first full year since acquisition of $0.9m, an increase of 15% on a like for like basis. Billable Service Revenues from client funded software development totalled $2.1m, an increase of 9% year on year. Serko Incharge and Billable Services Revenues were in line with guidance.
The business added 46 new employees and ended the year with 133 employees spread between Auckland, Sydney, Brisbane, Melbourne, Perth, X’ian (China), Gurgaon and Mumbai in India.
“We are incredibly proud of our achievements this year. Revenues are very healthy and we launched a range of important initiatives, partnerships, products and acquisitions that set a strong platform for the year ahead,” Grafton says.
“In the context of Serko being in the fast growing travel technology space with a significant increase in the size of potential user base, our solid result reflects strong demand and the important balancing of growth and profitability,” he continues.
“We remain dedicated to pursuing growth and leveraging off our many partnerships, acquisitions and new products developed this year. These results demonstrate that demand for our products across the region is strong and our product vision is aligned with the needs of the market.”
For the full year the business expects revenue to be between $16 million and $18 million, which will continue Serko’s 50% plus year on year growth record.
The company delivered a number of important initiatives in its first full-year of trading since listing on the NZX in 2014. These include Serko Mobile launching an application for the Apple Watch, the acquisition of Arnold Travel Technology and integration of Incharge (expense management).
As a result of the acquisition of Arnold Travel Technology, Serko says it expects around 30% of Australia’s total corporate travel expenditure to be flowing through its systems by the end of FY16.
In the last year Serko has launched partnerships with Expedia’s affiliate network to deliver hotel room booking, AirPlus for travel expense management, Intelligent Travel for a suite of new health and safety products as well as Routehappy, to provide Serko Mobile users with comfort-related flight information.
Serko’s long-term North American partner nuTravel Technology Solutions committed to a three-year reseller agreement for Serko Mobile with revenues from this partnership expected to kick in later in 2015/16.
In December Grafton was named one of the global travel industry’s top 25 most influential people, the first time an executive from Australasia had been included. Changes to post-ticketing functionality along with other incremental improvements have also been added to Serko’s core technology platforms this year.