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Hawke’s Bay
UPDATE: Serko will list on the NZX main board on June 24, chairman Simon Botherway said this morning.
The travel software company will seek to raise a minimum $17 million, plus an optional extra $5 million if the founders sell down.
If the full $22 million is raised, that will equate to around 33% of the company, implying a total value of around $67 million, Mr Botherway says.
Shares will be priced at $1.10.
The offer will open June 4 and close June 19.
Australian and NZ institutional and retail investors will be targeted for the float. Cameron Partners is Serko's advisor and organising paticipant on the IPO.
Financials
CFO Tim Bluett says revenue of $11 million revenue to is forecast for the 12 months to March, 2015. FY2014 revenue was $6.7 million.
The company is forecasting a $6.5 million after-tax loss for the period and a $5.5 million ebitda loss; a $2.2 million ebitda loss is forecast for FY2016. After that the company anticipates it will break even.
Today, Serko is owned by its founders, CEO Darrin Grafton and director and strategy manager Bob Shaw, who each own 50% of the company each, according to the most recent Companies Office filing.
After the IPO, Grafton and Shaw have pledged sell any more shares until two days after Serko announces its 2016 annual result.
Where the money's going
Of the $17 million minimum raise, $11.3 million will be held to fund capital initiatives and pay for the $438,000 cost of the,IPO, $3.4 million will repay bank debt and $2.3 million will repay shareholder loans. There will be no debt after the IPO.
Serko forecasts net cash of $9.9 million at next month's listing, and anticipates spending $2.4 million in the current financial year and $2.5 million in the first half of the 2016 financial year.
Corporate clients
At an event in its Auckland office this morning the company emphasised that 90% of its revenue was coming from across the Tasman, where blue chip clients include the Australian Federal government, most state governments, Telstra, Toyota and KPMG.
The company is billing the potential for its cloud-based software to disrupt traditional travel software systems, and help big organisations book and manager their own travel, but says it also enjoys good partnerships with corporate travel agents, who act as resellers on most deals.
CEO Darrin Grafton said some of the money raised will be used to further development of a smartphone app due later this year. The app will include tap-and-go travel payment for corporate travellers for situations where the have to pay up front, or are travelling for leisure.
Serko holds key patents around this mobile technology and NFC (near-field communications technology often used for wireless payments), Mr Grafton says.
The company also has patented technology for moving hundreds of staff in the energy and resource sector. An example given was Australian company John Holland, which moves 170 staff every two weeks. Serko says it used to take the company three weeks to make big fly-in, fly-out books. They can now be organised in 45 minutes, Serko claims.
The CEO pitches Serko's service as offering self-booking for corporate adminitrators and travellers, and a tool to manager expense policies (such as business class travel on flights of seven hours or longer only).
Serko makes its money by clipping the ticket each time a booking is made. It also has service fees to customise its service.
There are 1.1 million traveler profiles registered with Serko across 6000 corporate clients.
The company says 20% of corporate travel spend in Australia is booked through its software. A push into North America is underway. India and China are among other targets in the worldwide corporate travel market, in which around $US480 billion will be spent this year.
Serko was part of NZX and ASX-listed Gullivers Travel Group until Gullivers was bought by Australia's S8. Co-founders Mr Grafton and Mr Shaw, who both worked for Gullivers, bought it back in 2007.
Although there have been rumours of an offshore listing, the founders today said they were listing on the NZX because they wanted their company to say part of "NZ Inc."
EARLIER: Serko says it will announce a "significant company announcement" today at 11am.
The travel software company, which has doubled in size to around 100 staff over the past year, has been the subject of NZX and ASX listing speculation.
The recent announcement of high-powered new board members further stoked the IPO rumours.
Serko's cloud software is used by travel agents, disrupting the behemoth systems like Galileo that have been used for eons.
The Auckland company has also started selling its system to the likes of large Aussie mining outfits, who use to coordinate and get the best price for massive FIFO (fly in-fly out) movements of staff between urban areas and mines as they work two weeks on, two weeks off.
Privately held Serko has not released financials, but the latest TIN100 report says its 2013 revenue was $5.3 million — the same figure as the study estimated for 2012.
If HR is anything to go by, the company is growing at a rapid clip.
Founder Darrin Grafton told NBR in March, "We have grown from 42 to 94 staff in 12 months to support the growth with at least 30 more staff required in the short term."
At that time, as a tech stock backlash hit the Nasdaq, ASX and NZX, Mr Grafton was cool on IPO talk.
Today, things could be heating up again.
Already there's been one IPO sign, with the company noting on March 3 that its newly-appointed CFO Tim Bluett has experience with "high-profile, publicly listed companies including Telecom New Zealand, British Telecom, and Cable & Wireless."
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Serko reveals financials as it outlines plans for $22m IPO valuing co. at $67m
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