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Covid-19: Travel management software company Serko suspends all guidance

Tourism turmoil takes its toll as Serko hunkers down
Darrin Grafton, (Serko)

Darrin Grafton, (Serko)

NZX-listed travel management software company Serko has suspended its stock exchange guidance as Covid-19 wreaks havoc with international travel.

"Due to the rapidly increasing uncertainty surrounding the duration and scale of the Covid-19 outbreak, and the impact it and the related border control restrictions are having on corporate travel, Serko Limited has today announced it is withdrawing its full year 2020 revenue guidance," the company said in a stock market announcement today.

On 25 February, Serko advised the market that it expected to come in at the lower end of its guidance range of total operating revenue growth between 20 per cent and 40 per cent for the year ended 31 March.

“The spread of the virus and subsequent increase in border access restrictions is making it difficult to predict the impact the virus is likely to have on Serko’s year end position," Serko CEO Darrin Grafton said.

“On this basis, we think it is prudent to withdraw guidance at this time."

Grafton said Serko's priority during was to maintain Serko’s current balance sheet strength and position. 

"Our focus is ensuring the company continues to grow following this challenging trading period," he said

“Serko presently has a strong cash balance, following its successful capital raising undertaken late last year, and the executive team and board are optimising the business for long-term growth by carefully managing the allocation of capital during this period.”

On 25 February, Serko said it was experiencing a drop-off in bookings and revised its guidance down to the bottom end of its previous range.