New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Serko (SKO) AGM update</h2>
Serko (SKO)’s AGM had little news, other than an update on the number of active SME’s migrated to the Booking.com platform which has now reached 200,000.
AGM key takeouts
<ul>
<li>SKO’s monthly average cash burn during Q1 was NZ$2.6m, within the previously guided range of NZ$2m-NZ$4m (Forbarr FY22 assumption of NZ$2.5m if no Booking revenue generated at all for the year)</li>
<li>No guidance was given for FY22 revenue (unchanged)</li>
<li>More than 200,000 active businesses are now reportedly on the Booking/SKO platform (5,000 new customers added in July which were not on the previous Booking for Business platform)</li>
<li>This compares to our current bear case of 204,600, base case of 229,800 and bull case of 255,000 active SMEs once onboarding is completed</li>
<li>SKO expects European corporate travel to pick up post the July/August holiday period, driving the number of transactions on the platform</li>
<li>SKO reiterated its goal of increasing average revenue per booking (ARPU) in order to reach $20/transaction</li>
</ul>
Our view
Increasing the number of active SMEs on the SKO/Booking platform to 200,000 shows a significant jump from the previously reported number of 150,000 (at 1 August 2021) active SMEs, suggesting the recent run rate to have picked up significantly. With completed migration still expected to be at 30 September 2021 we closely monitor updates for the company in regards to average weekday run rate. We note of these 200,000 active customers, 5,000 are reportedly new customers which were previously not on the Booking.com platform. Given the potential size of the Booking.com contract we remain attracted to the stock, with SKO currently our top pick in the New Zealand technology sector. &nbsp;

Serko (SKO) AGM update
Serko (SKO)’s AGM had little news, other than an update on the number of active SME’s migrated to the Booking.com platform which has now reached 200,000.
AGM key takeouts

SKO’s monthly average cash burn during Q1 was NZ$2.6m, within the previously guided range of NZ$2m-NZ$4m (Forbarr FY22 assumption of NZ$2.5m if no Booking revenue generated at all for the year)
No guidance was given for FY22 revenue (unchanged)
More than 200,000 active businesses are now reportedly on the Booking/SKO platform (5,000 new customers added in July which were not on the previous Booking for Business platform)
This compares to our current bear case of 204,600, base case of 229,800 and bull case of 255,000 active SMEs once onboarding is completed
SKO expects European corporate travel to pick up post the July/August holiday period, driving the number of transactions on the platform
SKO reiterated its goal of increasing average revenue per booking (ARPU) in order to reach $20/transaction

Our view
Increasing the number of active SMEs on the SKO/Booking platform to 200,000 shows a significant jump from the previously reported number of 150,000 (at 1 August 2021) active SMEs, suggesting the recent run rate to have picked up significantly. With completed migration still expected to be at 30 September 2021 we closely monitor updates for the company in regards to average weekday run rate. We note of these 200,000 active customers, 5,000 are reportedly new customers which were previously not on the Booking.com platform. Given the potential size of the Booking.com contract we remain attracted to the stock, with SKO currently our top pick in the New Zealand technology sector. &nbsp;

Serko Ltd

SKO: AGM Key Takeouts