Serko Ltd (ASX: SKO) operates as an online corporate travel booking and expense management company. On 22nd May 2019, the company released its Environmental Social & Governance Report along with 2019 Annual report for the year to 31st March 2019.
As a software development company providing travel-related booking tools and information, Serko has a low environmental impact and it is not a high producer of carbon through its activities. Yet, the company aims to play a role in helping to provide information on travel-related CO2 emissions to its customers. Serko is also trying to become the medium by which travellers could pay carbon offsets. These environmental initiatives will be considered as part of the product innovation road map of the company.
During FY19, Serko drafted a manual and procedures outlining its environmental goals, including recycling, committing its people to undertake only essential travel, minimising paper usage, and identifying ways with which its technology can assist the clients to minimise their impact on the environment further. In FY20, Serko plans to obtain internal feedback on this and gain employee commitment to its goals which are crucial to sustainability of the business.
On the social front, Serko has a variety of initiatives that contribute to its culture. As a result, the company has low employee turnover (10% rolling annual turnover measured at 31st March 2019) and high employee engagement scores relative to industry norms. This is corroborated by the fact that more than 97% of its employees reported that they strive to do their best work every day. Moreover, Serko employees represent around 22 different nationalities and different age groups.
Further, the Board and management of Serko are very committed to ensuring that Serko maintains corporate governance practices and aims to exceed these with its excellent conduct.
For the annual year, the company’s operating revenue grew by 28% to $ 23.4 million and the total income amounted to around $ 24.6 million. The company registered a rise of 17% in the online booking transactions and the Peak ATMR was also up 41% to $ 26 million as compared to the same month prior year.
In addition, the company’s net profit after tax (NPAT) was around $ 1.6 million with an EBITDAF of $ 2.6 million, which is also 19% higher than the prior year. At the end of the year, the cash balance stood at $ 15.7 million, reflecting a net capital increase of $ 14.3 million as compared to $ 5.2 million in the prior year.
Source: Company’s 2019 Results Presentation
Evidently, Serko continued to exhibit strong growth in its maturing Australasian business and made good progress laying the foundations for its next phase of development — growing into new Northern Hemisphere markets. Serko transitioned from a research and discovery phase in the Northern Hemisphere to development and delivery phase. As a result, the company capitalised more development costs than 2018 and recorded an 87% rise in the Total Research and Development (R&D) expenses as compared to the prior year.
The company is expecting 20%-40% Operating Revenue Growth in FY19.
SKO is trading at A$3.200 (As at 12:42 PM AEST), up 0.31% on 23rd May 2019.
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