Not to be under rated this partnership will just about be global atm and Im picking that eventually it will be, Im told by a travel ex that this is the bench mark for the travel industry and will be the norm eventually.
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Just announced
FFER: SKO: Serko announces underwritten NZ$15m Placement
Serko announces an underwritten NZ$15m placement to provide greater
flexibility to accelerate growth opportunities
Serko Limited (NZX:SKO, ASX:SKO, "Serko") is pleased to announce an
underwritten placement to raise approximately NZ$15 million ("Placement").
The Placement is underwritten by Deutsche Craigs Limited(i).
The Placement is underwritten at a price of NZ$2.75 per share, reflecting a
3.2% discount to the last traded price of NZ$2.84 on Monday, 6 August and a
5.6% discount to the 30-day VWAP of NZ$2.91.
The bookbuild will take place on Tuesday, 7 August 2018. Serko expects to be
in a position to make an announcement as to the outcome of the bookbuild
prior to the commencement of trading on Wednesday, 8 August 2018. There will
be no Share Purchase Plan in connection with the Placement, however certain
NZX participants will be invited to participate in the bookbuild on behalf of
their New Zealand and Australian retail shareholder clients.
The Placement is expected to provide Serko with funds to bolster its working
capital position and strengthen its balance sheet, giving Serko greater
flexibility to both accelerate organic growth opportunities and execute
potential acquisitions, including:
o Undertaking investments to drive revenue growth such as establishing
sales and support functions in new international markets;
o 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;
and
o Providing funding capacity for potential acquisitions that deliver
additional customers, development capability and in-market infrastructure,
facilitating and enhancing the pace of Serko's expansion into new
geographies.
Additionally, the Placement is expected to deliver a range of ancillary
benefits such as increasing Serko's free float, providing greater liquidity
for investors and broadening the share register investor base by introducing
new shareholders.
Key dates(ii)
Conduct bookbuild for underwritten placement Tuesday, 7 August 2018
Trading halt on NZX and ASX(iii) Tuesday, 7 August 2018
Announce placement completion and resume trading Wednesday, 8 August
2018
Settlement for placement shares on the ASX register Thursday, 9 August
2018
Settlement for placement shares on the NZX register Friday, 10 August
2018
Allotment and trading of placement shares on NZX and ASX Friday, 10
August 2018
Further details
Further details of the Placement are set out in the Investor Presentation
lodged with NZX and ASX today.
Ends
For investor relations queries please contact:
Susan Putt
Chief Financial Officer, Serko
Phone: +64 9 309 4754
investor.relations@serko.com
Happy with the placement.
Fully underwritten at a modest discount to market price (means Underwriter has canvassed the market and knows the demand is there).
Principal shareholders and directors not selling down (read the sell down by Trilogy directors etc for when we know the top is probably reached) and we know they actually put in more money last placement at above market price.
Likely that most of the shares will go to Australian institutions and if well managed, should see them using the placement shares as a base to buy more shares on market.
Means Serko is promoting the story more - as they always do to support placements.
Doesn't sound like a stock for you, Beagle.
Probably time for you to move on as this stock reminds me of Diligent - going to be some 'interesting' times ahead.
I expect the sp to spike higher after the placement. So opportunity to let go.
Sincerely and no offense meant.
Fair enough mate. I got sucked into the hype and agree that this one doesn't fit my normal investment style of real earnings or go home. Very small holding so not sure I can be bothered doing anything about it at this point.
I started buying in earlier this year - up as much as 70% on some purchases.
Happy to ride this one for a while longer.
Will probably sell out when they sit alongside Xero.
I've had it since it listed. Intend to hold and enjoy the ride, uneven as it might be from time to time.
I'm wondering what the end game is.....will they be another Kiwi company that gets purchased by a bigger fish ?
Hope not....we need one of these to stick and become a big fish operating out of NZ.
I bought more at 80c on market after the share placement in Dec 2015 of 84c. Figured that if directors were prepared to buy more in volume at that price, things must be going fine.
Much to my surprise, the shares fell to a low of 25c in April 2017!
Now sitting on a nice 250% gain on those shares but should have loaded up at 25c - a ten bagger in 1 year and quarter!
Anyway, this is one NZ stock which operates and is competitive in the international arena so upside potential continues to be huge vs NZ based companies.
I've bought at IPO at $1.10 and then some more in 2016 at 76c just to see the share price drop so low I felt ill. However, after briefly contemplating selling it all at a loss and moving on, I checked all my reasons why I actually bought in. Bought some more on the way up at 35c just to get the average price down. I think late 2017 I posted that I feel it should be trading closer to $3.
I can't remember who said this to me but that person told me that Serko is not a NZ company. It is a global player that with the right management will become a leader in the market it decides to enter. Hence I'm still holding on to my big parcel. I've convinced myself that we are merely at the prologue of the Serko story.
https://www.nzx.com/announcements/321856
Done and dusted.
Australian institutional investors on board. Retail investors as well... Talk of acquisitions too?
Market seems to like it. Will be interesting to see what the action on the ASX will bring. Hopefully someone who missed out will have to purchase on market.
Good to see the market respond well and not for example leave us poor share holders to STU in our own juices like another capital raising example.
Just hit $3 mark, hopefully it can carry on with its upward momentum from here. Waiting for an update when they've ASM in two weeks time on 22nd Aug.
Also Aug 11-15 in San Diego GBTA is happening and Serko will be there.
"Don’t miss the nearly 1,300 business travel buyers who will be making their purchasing decisions on the GBTA Convention 2018 Expo Floor. 95% of travel buyer attendees say the GBTA Expo influences which suppliers they select for their travel program."
Goodbye two's? Hoping so.
Interview with Darrin Grafton:
https://skift.com/2018/08/09/intervi...source=twitter
Zeno by Serko sounds impressive https://www.zeno.travel/gbta?utm_cam...source=twitter
In a sea of red it is nice to have a little green oasis!
Zeno by Serko stand at GBTA2018
https://twitter.com/darringrafton/st...58967231500288
Bit hasty - but this could be your last discounted buying opportunity before we hit $5!
Checking their social media so you don't have to:
Successful Day 1 at #GBTA2018! We have been overwhelmed by the positive feedback we received today for the launch of #Zeno in North America.
TMCs, Travel managers and suppliers agree that Zeno brings fresh thinking and a smarter way of doing things. Our breakfast launch event tomorrow was even 2.5 times oversubscribed, so we doubled the size of the venue!
See you tomorrow, and if you want to find out more about the new way of thinking: https://hubs.ly/H0dnwm20
I need this one to keep climbing to offset the sea of red that surrounds it in my portfolio.
I should have made the appointement with the bank manager at the beginning of the week - things were ALOT more optomistic then :(
Not sure how to embed tweets with pics here: Anyway - posted today on Serko's Twitter
Queues, overwhelming response and interest at our #Zeno booth. Thank you all, it was great being part of #GBTA2018!
https://twitter.com/SerkoOnline/stat...24072589496320
Looks all good - and might be a promising company. Just wondering, though - how do you measure whether the current SP is a fair reflection of its value? I guess while revenue growth looks good, it is not outrageous for a software startup and growth company - and while it s great that they are now cash flow positive ... earnings history still feels a bit patchy.
Shares on issue ………....80,348,887
Market cap at $2.95 …..$237,029,217
eps...…………………………...2.45 cents.
PE ratio...……………………...120.41
NTA...…………………………...8.83 cps.
Dividend...……………………….0
Revenue ……………………….$18,3mil
Net Income...………………….$1.8 mil.
Perhaps a lot of SKO's future earnings are already priced into their share price.?
Yes on fundamentals it is overvalued but I'm in it for its disruptive technology. Such big markets left to explore for them. To me the more apt comparison would be with Xero which trades at approx 16x revenue.
Point is that growth drives revenue multiples and SKO is growing at a fraction of APT hence why I think future growth of SKO is already priced in i.e it’s overvalued. If they can prove they can grow above 40% that multiple is fine.
Can you elaborate on exactly why/how this technology is so disruptive? Is it really something that others can't easily build or copy?
Pushpay is an example of a technology that is hitting hard initially, growing fast, but ultimately isn't that special in terms of what it does and can be quite easily cloned I think. Xero on the other hand (and accounting software in general) is far more complex a product and it wouldn't be easy at all to try to compete with them. Look at Xero themselves scrapping their custom built tax thing recently and going with a partner.
Where does Serko fall on that scale?
Good question and key to USA push. If they can land a large USA customer and prove their approach is novel the sky is the limit. I would be watching for SIGNED deals and not trade show press releases.
I didn't want to push Serko's agenda just keeping existing shareholders abreast of what is going on at this important trade fair. If it's perceived to be ramping I can easily stop.
Yes contracts of course will be the key - I personally hope the LOI with Flight Centre Group will bare fruit (see announcement 19/7/18).
The next shareholder meeting will be on 22nd August and I'm sure we will learn more about the path ahead.
Don’t see it as ramping, thanks for posting the info, has saved me looking for it. If you hadn’t I would have missed it completely. Not sure what the end game will be for SKO, could easily be a takeover by another bigger player in the industry.
Disc. Modest holding from IPO.
Serko appear to have some good connections - like being able to not only book a seat but book which seat and a meal.
The addition of the expense tracking will no doubt make life easier in the corporate world.
I don't see them being easy to replicate by startup businesses.
Xero have a great marketing plan, ie the way they got accountants signed up on commissions etc.
However, although their product was better than the traditional competition like MYOB I found it pretty clunky when I was using it. Although this was a few years ago, it still felt like a modular construction that all the parts didn't talk to each other as well as they could have.
I sold my high client business and now use Wave for what I do. It is a lot more use friendly and cheaper.
Other than accountants pushing Xero I don't really see how they have a product that can't be relatively easily replicated.
They have been successful at building a huge client base - even if they haven't turned that into a profit yet.
Interesting comparison all the same. And as a holder I am of course hoping for a similar SP two years from now!
Should be a very interesting meeting, make or break imo .
Could you work out Xero? Wait I will do it haha
Shares on Issue................140,374,379
Market Cap at $47.53........$6,676,907,337 Australian Dollars $7,350,607,287.30 New Zealand Dollars
eps On ANZ Securities.......-18.79
PE ratio on ANZ................-253.14
Dividend..........................0
Revenue..........................$406,000,000 (Near to what ATM hope to make in Profit Next year)
Net Income I believe was.. -$27,000,000
Perhaps people are finding future earnings are already priced in here?? Silly Question.
Have a look at Sky TV leading up to when it started delivering profits.
The company bled $$$$ year after year but the sp kept tracking higher and higher - strategy was very clearly articulated to investors and the market - that when inflection point on subscriber numbers is reached, the company would enjoy rivers of cash.
That's the story with these stocks.
Thanks Balance.
I think I was one of Sky's first subscribers in Christchurch, which made it easy for me to see "the full picture".
Maybe because I do not use either Serko's or Xero's products I do not understand how to value either.
Never mind, I have done enough with what I do understand, to retire comfortably.
That -253.14 is actually over 253 years losses,so that infection point on subscribers, does not look to be just around the corner.
Makes Serko's positive 120 PE look very modest...…?
Just realised I have not asked the right question.Do you expect SKO's earnings to grow at over or under 100% this year and next.?
Serkos products are reasonably disruptive, but not overly so. They have chained together a few interesting products (combination travel is a good one - hotel/flight/cars etc in one go), then back it up with a simple expense management solution. More than anything their product makes it a whole lot easier to do travel and expense management. They are reasonably responsive to function requests and appear to have a pretty good engineering team behind the product.
How do I know? The organisation I work for has implemented both their travel software and expense management products. Reports from users are very good and it is cutting down on our costs and annoyance. They seem to produce "oh, is it that easy" products that require very little hands on massaging to get it right. Plus according to our finance people its a pretty good cost saver. They have integrated workflows too to make approvals easy.
Those are the sort of products you want to have, that require barely any manpower to manage and are easy for users. Fairly seamless from a user perspective is what you really want and Serko delivers that 80-90%. Based on this experience, which is often painful for a lot of organisations, I would recommend their products. In most organisations this stuff is a PITA, so to find something that "just works", is a god send and makes an entire organisation more productive (better for front end users, better for back office finance & IT, resulting in cost savings all around). Actually after seeing it in action it makes you think "why wasn't it always like this?".
Reproducible? Yes. And some huge corporates have probably created their own in-house Serko products, or at least bits of it. But not without some effort. Their products would be useful for any corporate that finds this stuff hard, which is a LOT of corporates. But its not sexy. Its not going to win middle management huge prizes as a result of massive cost savings. But still, the appeal is definitely there and cost savings post implementation will flow after a year or two of operation. As they sign more and more customers their recommendations engines and potential for further big data analysis will ramp up quickly giving them heaps of future potential growth options.
They are a fresh company with active developers (which you can actually talk to!) and what looks like solid architecture. We have had one bug with them, which was fixed within 3 days of finding it. That is sensational response time for a company (Microsoft bugs we have had can take > 6 months to resolve!).
I am generally a tech FA investor (who works on the leading edge in IT) and own Serko shares as a result of seeing their products in action. Having worked for a stack of corporates, I have seen how painful this stuff is, so seeing it done well is fantastic. The oppourtunities in front of them are huge, they only need to sign up a few big corporates and revenue will take off. But my feeling is it will be a slow burn. Their cost control is great, but I wouldn't mind seeing them go large on growth. I believe they have a US sales team which will be actively pumping the benefits over there, which transition to pretty much anywhere in the world.
I can imagine them being bought by a company like Microsoft or Intuit and their products being integrated into their finance systems (or creating a slight offshoot/extension). Or a takeover from another travel company. Going it alone is biggest bang for their buck, but it will probably take some time.
Yes thanks all, ive never really looked or understood this stock. Will keep an eye on it. I take it anyone in has been in for a while and no-one would buy art this price.
Somebody told me what Serko did was rather disruptive and probably had a good future. Stil don’t fully understand how they make money but squiggly line on chart looks good
But it was really Balance’s passion for Serko early on that got me in
Thanks mate
Excellent post blobbles. Very informative and I appreciate your input - please keep on sharing your insights. fwiw my interest in Serko was awakened by talking to a friend's husband who travels a lot and loved the software. I like your comment "to find something that "just works", is a god send and makes an entire organisation more productive". I'm in a different industry but I it is not that easy to find software that just works. That was one reason why we didn't switch over to Xero. I found it not easy enough to use to work with it for several hours a day.
Have you had an opportunity to see Zeno at work? When I mentioned that Serko is disruptive it was with regards to this new AI Bot software. I've been told that this type of software is hard to replicate.
fwiw
Darrin Grafton
@darringrafton
3m3 minutes ago
More Darrin Grafton Retweeted Serko
When we built Zeno, we took time out to look at what the future technology play would be that would disrupt us. We set out a plan to build just that. To see it resonate in the USA/Canadian markets was a cool experience. It takes a team to be successful.
will definitely be at the AGM to hear for myself how Zeno was received and if contracts followed.
We aren't using Zeno, not big enough. Bots aren't hard to make, have built one myself. But getting the data that drives the bot is the tricky part. Requires lots of soft AI/ machine learning/sentiment analysis stuff which is tricky. If they have got this right with Zeno, then it is a big barrier for new entrants.
AGM tomorrow could be an interesting meeting, updates with numbers could be on the agenda .
AGM at 2pm today but unfortunately I got sick so I have to do with the livestream here later http://www.ustream.tv/channel/jGdxWLD2DGS
I might go there and ask a few as this agm should be interesting of whats ahead,
I was listening to the ASM on my phone, so I might have heard wrong. When Simon Botherway was giving his speech on why he should be re-elected, I thought I heard him say that he intends to use the 15 million or maybe part of the capital raising for acquisitions in the Northern Hemisphere?
Yes that would be true but also for rolling out the presence in the U K , Europe and to some extent in the U S .
The link that Sb9 highlights is the way to go to hear the speeches, overall a very good meeting and if they hit their targets ( like all companies ) they will have a good future.
Any partnership would be good https://buyingbusinesstravel.com/new...partners-serko
And for a smoother online booking experience re tie up of SKO with Flight Centre https://blueswandaily.com/flight-cen...source=twitter
Here is a link to an interview with CEO Darrin Grafton that was posted yesterday https://youtu.be/JH2Lnf8agy4
I love hearing a strong kiwi accent in overseas interviews. Gud wurk nu zilland
Big out take from this was Dazza saying they a on track to grab 1% of the North American market by end of the year (4m+ bookings). Sounds like their ATPI partnership is paying off.
Weirdly I want the SP to keep its current downward trajectory so I can pick up some more :-)
I have SKO on a watch list, and am very surprised that the SP keeps going down on all the good news.
IMHO Listing in Aussie has not been a good move for SKO as most of the recent selling has come from there .
Most companies who list in Australia “to increase liquidity” seem to suffer the same fate, including Xero when it first listed in Australia. It’s a bigger pond over there, and they are unknown. Success does not happen overnight.
Didn't like it being under the MA100 for too long. The sell side on the ASX was also almost wiped out today.
Also Serko is to present at the MCG together with Uber and others for Illuminate 2018 which is hosted by Flight Centre https://www.illuminate2018.com/
Darrin is giving a speech about the future of online booking
fwiw Serko tweeted today:
The team at @SerkoOnline been working hard to bring a 'wow' factor to #fctgilluminate2018 and you can look forward to something pretty groundbreaking to see during the session with @darringrafton
Will we close over $3.00 today first time in a month?
Good to have a smile on a red day
Last week Darrin spoke at ASX Small and Mid-Cap Conference. You will need to fast forward to 6hr 3mins to see his presentation
https://www.youtube.com/watch?v=Qcy_qDAzPHs
A lot of buy orders in Aus now, looks like they have woken up over there.
There is rumours here in Singapore that Serko is going to sign a deal with Grab soon
I had forgotten about that :blush:
Savi, the Serko product, has been launched today by FCM Travel (corporate arm of Flight Centre). https://www.au.fcm.travel/technology/savi
During the presentation today Darrin said that 28% of Corporate travel bookings last year were made over a weekend.
Getting stronger by the day, when will it hit its ATH of $1.18 ?
Serko is one great story imo - truly internationally competitive in a huge evergrowing market.
Pays not to watch the sp day to day or even week to week as Serko’s true potential will come in the next 3 to 5 years.
Meanwhile, more and more institutions are getting on board and from what we can observe, the directors are not selling it but have on enough occasions, put their money where their mouths are by putting in new monies into the company.
Love to draw the comparison with PEB where the directors are only interested n free options and selling their capital raising rights if the rights are in the money.