Trading halt: Serko raising $55 million as it faces revenue uncertainty

Booking volume for Serko fell 90 per cent in March. Photo / 123rf

Travel booking and expense management firm Serko will raise up to $55 million as it faces uncertainty over future revenue as business travel plummets due to the pandemic.

The company will raise the capital by way of a $45m fully underwritten placement and a $10m non-underwritten share purchase plan.

In the year to March 31 Serko suffered a $9.4m after-tax loss. In March booking volumes were down 90 per cent on the same time last year.

Although Serko has $33.6m of cash on its balance sheet, it said the timing of meaningful revenue generation is uncertain.

But chief executive Darrin Grafton said Covid-19 pandemic was creating opportunities to grow.

The funds would also be used to provide ''additional balance sheet flexibility to respond to changes in the business environment''.

They would also be used to accelerate the development and rollout of technology to support the company and reseller partners.

"In recent months, we have received inbound demand from these organisations as they consider, plan and request accelerated timetables to onboard new customers, deliver new features and expand existing partnerships.''

He said this demand had exceeded expectations and is highlighting increased opportunities from a changing travel industry.

"Serko's board and management consider the company's market positioning and growth prospects within the travel industry remain significant over the medium to long-term, notwithstanding the impact of the Covid-19 pandemic on the business travel industry. It also remains confident in the recovery of business travel over time.''

Serko said at its annual meeting last month it was unable to forecast likely operating revenue for the 2021 financial year with any certainty.

The company is on a trading halt for the placement conducted today through a bookbuild.

It is underwritten at a floor price of $4.35 a share, which represents a 3.5 per cent discount to the last closing price of $4.51 a share.