Serko shares climb 3.1pc after lifting first-half earnings guidance

Serko co-founder and chief executive Darrin Grafton. Photo / Richard Robinson

Serko shares rose 3.1 per cent after the online travel booking software firm said it expects first-half trading revenue to be at the top end of previous guidance, and reiterated it is expecting to post a maiden annual profit.

Serko said trading revenue was about $9.1 million in the six months to September 30, up 30 per cent on the previous first half and at the top end of the 25 per cent to 30 per cent guidance it previously gave. Total income, which includes grants, is expected to be $9.6m.

The company is forecasting first-half earnings before interest, tax, depreciation and amortisation (ebitda) of $1.3m, versus a loss of $1.8m in the prior year, and expects a before-tax profit of $1m in the first half compared to the previous first half's $2m loss.

Serko reiterated its forecast to run a profit in the year to March 31 versus a loss of $3.3m in the 2017 financial year. It's expecting annual trading revenue between $18m and $19m.

Chief executive Darrin Grafton said the company is "enjoying accelerating momentum" with online transaction volumes up 21 per cent from a year ago, ahead of the 18 per cent annual growth rate in FY17. The company is also benefitting from growth in revenues from non-core services such as hotel bookings and airport transfers, he said.

The stock rose 3.1 per cent to 67 cents and is up 124 per cent this year, having spiked to a 1 1/2-year high in July after giving guidance on its expected first half.

While Serko had warned the second half of the year is typically weaker, Grafton said the company said it still expects trading revenue to be between 25 per cent and 30 per cent ahead of the previous second half.

In 2014, the company raised $17m selling shares at $1.10 apiece and existing investors sold a further $5m into the offer, however, the stock has been punished as a slowing Australian economy and late product launches weighed on Serko's revenue. Serko then raised $8.1m from institutional and existing investors at 84 cents apiece in late 2015, having previously signalled it didn't plan to go back to the market after its June 2014 initial public offering.

In March it said its existing Callaghan Innovation grant has been extended for a further two years, to June 30, 2019, with an additional value of $2m. The new funding is an extension to a previous $4.2m Callaghan Innovation research and development growth grant. The additional funding is being used to develop predictive technology, it said.

(BusinessDesk receives assistance from Callaghan Innovation to cover the commercialisation of innovation.)