Travel management and costs technology group Serko [ASX:SKO] was rocketing upwards in share price earlier today after its FY2023 results beat its guidance.
SKO was trading for an improved $2.74 after its 29% increase on Wednesday. It’s now up by 23% in the year so far, yet is still down by 36% in the last full year of trade:
Source: TradingView
Serko reveals huge revenue growth for FY23
Serko posted much better than expected results for the end of FY2023. Total income arrived at $48 million — just ahead of the revised FY23 guidance range of $42 million to $47 million.
These were the highlights of Serko’s 2023 results:
- Total income was $48 million — up 154% year-on-year (YoY)
- Average revenue per booking $9.56 — up 65% YoY
- Average revenue per completed room night €9.34 — up 36% YoY
- Online bookings of 4.1 million — up 93% YoY from 2.2 million
- EBITDAF loss of $21.8 million — a 23% year-on-year improvement
- Net loss after tax of $30.5 million — another 15% year-on-year improvement
- Cash and short-term deposits were $87.7 million
- Underlying average monthly cash burn $2.7 million
- FY24 guidance for a total income of $63 million–$70 million
Darrin Grafton, Serko’s CEO commented:
‘Serko’s result demonstrates strong growth driven by earlier investment decisions and disciplined execution.
‘The result reflects our focus on cost discipline balanced with targeted investments for scale and growth. Total spending increased by 34% for the period. As a percentage of total income, total spending decreased from 330% in FY22 to 174% in FY23 and cost growth reduced to 3% in the second half.
‘We remain well capitalised with underlying average monthly cash burn reducing from $3.3 million to $2.7 million. Underlying average monthly cash burn in 2H23 was $1.8 million.’
The group said growth was underpinned by a boost in unmanaged travel, which was said to have been due to dedication, hard work, and a strong partnership with Booking.com.
Booking.com for Business was reported to achieve completed room nights of 381%, along with strategic decisions that allowed Serko to maximise business travel’s recovery.
Outlook for SKO
Serko’s total income for FY23 was 79% higher than it was in FY20 — the financial year immediately prior to the pandemic and Serko’s previously highest year for revenue.
Mr Grafton said the results have brought about CWT’s commitment to supporting an expansion of Booking.com for Business — with discounts, membership rewards and loyalty programs in the mix.
Serko now eyes $100 million in total income for FY25, and a full-year total income of between $63 million and $70 million for FY24, based on current trends.
Serko’s confidence is backed by $88 million in cash and anticipates positive cash flow and breakeven for the next year.
However, SKO also flagged ongoing geo-political and macro-economic risks, and total spending of between $86 million–$90 million based on its current investment plans.
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For Money Morning
