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Loss-making Serko misses guidance

NZ NewswireNZ Newswire 24/05/2016 Paul McBeth

Online travel booking company Serko expects to become profitable in 2018 after missing its downgraded guidance for operating revenue in its latest year.

The company posted a loss of $6.2 million in the year to the end of March, from $6.5m, a year earlier, it said.

Revenue rose to $13.1m from $10.4m.

Serko had downgraded its 2016 revenue outlook twice due to late product roll-outs and a slowing Australian economy, with its guidance suggesting it expected revenue of $13.6m.

"Despite the strong growth in underlying transactional fee revenue, aggregate revenue did not meet our guidance for the financial year," Serko said.

The Auckland-based company expects to start turning profits starting in the 2018 financial year and is aiming to break even on a cash-flow basis from February next year.

"We will take a rational approach to areas of the business that are not meeting our expectations to ensure that our resources are allocated to those parts of the business which will deliver long-term value to shareholders," chief executive Darrin Grafton said.

Serko raised $8.1m from institutional and existing investors last year to help fund a marketing push and product launch, having previously signalled it didn't plan to go back to the market after its June 2014 initial public offering.

The company didn't provide guidance for the 2017 financial year, saying it will update investors at the annual meeting in August.

Serko shares last traded at 76 cents and have dropped 16 per cent this year.

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