Tired of staring at your screen all day, logging into one Zoom call after the next? You’re not alone. The thrill of interacting with clients from across the world through a laptop screen has come to a screeching halt with people preferring to meet in person over virtual catch-ups.
Travel management and expense tech Company Serko’s (ASX: SKO) impressive financial results for the fiscal year 2023 not only demonstrate the Company’s growth and success but also shed light on the recovery of business travel in the post-Covid era.
As economies gradually reopen and travel restrictions ease, companies are once again engaging in corporate travel activities. Serko’s remarkable growth in completed room nights through Booking.com for Business, which surged by 381%, signifies a renewed confidence in business travel.
The Company’s total income for the year ending March 31, 2023, soared by 154%, reaching $48 million, surpassing the revised FY23 guidance range of $42 million to $47 million. Darrin Grafton, the Chief Executive and Co-Founder of Serko attributed this strong growth to previous investment decisions and disciplined execution.
He said, “The result reflects our focus on cost discipline balanced with targeted investments for scale and growth. Total spend increased 34% for the period. As a percentage of total income, total spend decreased from 330% in FY22 to 174% in FY23 and cost growth reduced to 3% in the second half. EBITDAF losses of $21.8 million and net losses after tax of $30.5 million improved by 23% and 15% respectively. 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.“
Online bookings surged by 93% to 4.1 million, compared to 2.2 million in the previous year. Remarkably, Serko’s total income for FY23 was 79% higher than FY20, which was the previous record revenue the year before the pandemic hit.
Grafton acknowledged the significant growth in unmanaged travel, attributing it to the hard work and dedication of many, as well as the strong partnership with Booking.com. The number of completed room nights through Booking.com for Business surged to 1.5 million from 320,000, supported by growth in the second half of the year.
Serko also witnessed a substantial increase in active customers, reaching 157,000, a remarkable 144% increase compared to the previous year. The average revenue per completed room night (ARPCRN) for the service rose by 36% to €9.34 ($15.2), up from €6.88($11.2).
Plus, Serko secured support from travel management Company CWT for an expanded “Booking.com for Business” offering, featuring discounted business travel rates, access to loyalty program rewards, and 24/7 travel agent support.
The Company’s recovery in business travel across Australia and New Zealand was robust, with online bookings experiencing a 77% surge. In Australasia, average online bookings reached 89% of pre-pandemic levels, while volumes in New Zealand reached 136% and Australia achieved 82% of pre-pandemic levels. Serko has also made notable progress in North America, building its strategic position, and plans to keep the market informed about significant developments in this region.
Serko affirmed its target of reaching $100 million in total income for FY25. It has a healthy financial position with $88 million in cash and no debt. After reaching its peak in H1 FY23, the underlying monthly cash burn has been decreasing, and the Company is committed to achieving positive cash flow by the FY25 financial year.
Alinda is a Business Reporter for The Sentiment
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