Serko looks to raise $15m

AUCKLAND: Serko plans to raise $15 million selling shares at a 3.2% discount to institutional investors to speed up its growth trajectory, having already raised revenue guidance.

The Aucklandbased online travel booking software developer will sell 5.5 million shares, or about 7.3% of the company, at $2.75 apiece to investors in a fully underwritten placement, it said in a statement. The funds raised would go towards bolstering working capital, which it said would give it more flexibility to speed up organic growth and close potential acquisitions.

Those funds would support ‘‘undertaking investments to drive revenue growth such as establishing sales and support functions in new international markets’’ and ‘‘accelerating product development and integration of local content and functionality in international markets which are required in order to appeal to a wider range of travel management companies (TMCs) and corporate users,’’ it said.

The placement, which is underwritten by Deutsche Craigs, comes just a week after Serko raised its revenue expectations for the year ending March 31, 2019 for sales growth of 2030% on 2018’s $18.3 million. It had previously predicted sales growth of 1530%.

Serko posted its maiden profit in 2018 and has started expanding into the northern hemisphere, where it sees new opportunities. Its shares have been in uncharted territory as investors were impressed by the successful execution of its plans last year, rising 30% so far this year, and it has completed a secondary listing on the ASX.

The company said yesterday the funds raised could go towards acquisitions, which it would want to ‘‘deliver additional customers, development capability and inmarket infrastructure, facilitating and enhancing the pace of Serko’s expansion into new geographies’’.

Shares of Serko were halted for the placement and are expected to resume trading today.

The company held cash and equivalents of $5.2 million as at March 31, generating a positive operating cash flow in the year of $1.4 million, compared to an outflow of $1.6 million a year earlier. — BusinessDesk