- Serko (SKO) has seen its guidance range for revenue hit by the surge of the Covid-19 Omicron variant
- The rapid spread of the variant and resulting restrictions reduced Serko’s business travel volumes and expected revenues for the full year to March 2022
- Serko adjusted its guidance range for revenue for the full year to 31 March 2022 to between NZ$18 million and NZ$20.5 million (A$16.7 million and A$19 million), down from NZ$21 million and NZ$25 million (A$19.5 million and A$23 million)
- The company’s average monthly cash burn in the six months to 31 March 2022 is expected to be close to $4 million, remaining close to the guidance provided in November 2021
- Serko shares were unchanged at $4.90
Serko (SKO) has had its guidance range for revenue impacted by the surge of the Covid-19 Omicron variant.
Serko is a travel management and expense technology company headquartered in New Zealand. The company provides online corporate travel booking and expense management software to customers across the globe.
Following Serko first releasing its half year results in November, the Omicron variant was detected in South Africa, and subsequently became widespread in other countries, impacting business travel globally.
Despite this, Serko said it continued to execute on its strategy. However, the rapid spread of the variant and resulting restrictions reduced its business travel volumes and therefore expected revenues for the full year to March 2022.
Serko undertook a capital raise in 2021, which was planned to ensure it would have sufficient capital to continue to innovate its global offering, acquire new customers and support existing customers regardless of the impacts of the pandemic.
Australian and New Zealand revenues remained in line with expectations up to the end of December 2021, with volumes not starting to dip below anticipated volumes until January.
The company said while it saw some early signs of recovery in Australia, demand in New Zealand has been significantly affected, particularly over the last week of January.
As a result of the impacts of Omicron worldwide, Serko has adjusted its guidance range for revenue for the full-year to 31 March 2022 to between NZ$18 million and NZ$20.5 million (A$16.7 million and A$19 million), from NZ$21 million and NZ$25 million (A$19.5 million and A$23 million).
The low end of the range assumes the volumes in each market over February and March will be materially lower than the volumes in the last week of January. The high end of the range assumes a gradual continuation of the improving trend in transaction volumes.
The company’s average monthly cash burn in the six months to 31 March 2022 is expected to be close to $4 million, remaining close to the guidance provided in November 2021.
Serko shares were flat at $4.90.