Product delays at fault as Serko reveals lower revenue expectations

New Zealand online travel firm Serko expects revenue for the year to 31 March 2015 to be 4-6% lower than the $11.002 million forecast in the company’s prospectus issued in May 2014.

Revealed via the New Zealand Stock Exchange, the shortfall is primarily attributable to the timing of billable software development, Serko Incharge and the delayed launch of Serko Mobile.

“The timing of a small proportion of billable services revenue from customer-funded software customisation has shifted into the 2016 financial year but is otherwise performing in line with expectations,” the company stated on NZX.

“Serko’s online expense management solution, Serko Incharge is expected to fall slightly short of forecast revenue as a result of client procurement delays.”

According to the company, Serko Online (SOL), the company’s primary travel booking product, is performing “in line with expectations” and is expected to meet the PFI forecast for FY15.

The full year operating loss is anticipated to be in line with PFI although the revenue shortfall will result in a slightly lower closing cash balance at 31 March 2015 compared to PFI.

As a result, Serko’s outlook for FY16 is that revenue for the six months to September 2015 is likely to be lower than the $8.279 million PFI forecast by approximately 8%, half of which is due to the impact of exchange rate movements and the balance is due to the delayed launch of Serko Mobile.

Serko will release its result for the 12 months to March 2015 on or about 22 May.