NZX-listed travel booking and expense management software maker Serko has reported a $10 million first-half FY2021 net loss - versus an $866,000 net loss in the year-ago half (for its full-year to March, the company lost $9.4m).
Revenue was also hit as the pandemic closed borders, falling to $5.1m in the six months to September 30 from $14.7m in the year-ago period. (Full-year FY2020 revenue was $25.9m.)
The results were in line with the guidance given at a September capital raise.
Shares closed up 1.82 per cent at $5.60 yesterday, continuing a strong recovery fuelled, in part, by news of the Pfizer and Moderna vaccines. [It closed down 3.4 per cent to $5.41.]
The stock is now up 21.74 per cent for the year, after falling as low as 89c in March.
The company has been cushioned by a $67m raise, wrapped up in September, and an earlier $17.5m cornerstone investment from US giant Booking.com. The company finished the quarter with more than $90m cash on hand.
Serko chairwoman Claudia Batten said: "The Covid-19 pandemic is reshaping all parts of the business travel industry, from the suppliers of business travel content and services through to the needs of the business traveller.
"Amid this disruption, our resellers and partners recognise the pivotal role Serko's solutions and relationships can play in managing the disruption and preparing for the recovery."
The capital recently raised, combined with our existing cash balances, position us well to scale-up to meet this demand and execute on our strategic priorities, positioning Serko for growth when business travel normalises, Batten said.
The shape of the new normal is still emerging.
But one executive, Auckland-based Nura chief operating officer Morgan Donoghue, echoed the comments of many to the NZ Herald when he before March he used to commute to his Melbourne every week. Now, with Zoom and other remote working tools proving far more effective than thought, he anticipated travelling across the Tasman once a month at most once borders reopened.
Serko made its bones in the fifo (fly-in-fly-out) Australian energy sector, however, which will still require regular travel, with mines moving no closer to cities.
In a report released earlier this week, Westpac chief economist Dominick Stephens saw a trans-Tasman bubble from mid-2021 - initially at a modest level, then expanding.
Stephens saw global traveling reigniting from September next year.
Serko gave no profit or revenue guidance for FY2021, but did tell investors at its capital raise that it would slow its burn rate to $2m in the first half and between $2m to $4m in the second half. The net cash burn in the first half came in at 1.8m, 10 per cent under target, despite the company hiring around 40 new staff (for a total of around 270).
Chief executive Darrin Grafton told the Herald that the new staff were working on projects for Serko's North American operation and anchor investor Booking.com (which has adopted Serko's "Zeno" platform and is reselling as Booking.com for Business).
Serko also guided that revenue would return to between 40 to 70 per cent of last year's rate by March next year. Currently, it's running at around 38 per cent, the CEO said - ahead of expectations.
Grafton said he was looking forward to Sydney-Melbourne flights being restarted next week. Some 90 per cent of his company's revenue was for inter-state flights rather than international travel.
Serko had added pandemic-friendly features to its software including information about hotel cleaning and mask requirements on flights, as well as compliance information. The outbreak made it more necessary to have a platform like Serko to manage corporate travel, Grafton said.
While FY2021 was mainly about operating in a restricted environment and laying the groundwork for the full resumption of travel, the pandemic had also created opportunities. Serko had been hit hard, its mainly US-based competitors had been hit harder. That, combined with its $67m raise, meant Serko could look at acquisitions, Grafton said.