Serko falls below offer price
Shares of Serko [NZX: SKO], the online business travel booking company, rose 2.7 in their NZX debut after closing the retail portion of its initial public offering early because of strong demand.
The shares first traded at $1.13 compared to its IPO price of $1.10. Serko sold 5.5 million of new shares at $1.10 apiece, raising some $17 million, and a further 4.5 million existing shares worth $5 million will be sold into the offer. Founders Darrin Grafton and Bob Shaw will each retain about 20 percent and have agreed not to sell any more shares until two days after Serko announces its 2016 annual result.
However, the initial gains were short lived. By 11.30am the share price had fallen back to $1 on 59 trades worth $354,464.
Shaw and Grafton started a company called Interactive Technologies in 1994 and created its main Serko Online product in 2000, according to its website. This later became part of Gulliver's Travel Group, which listed on the ASX and NZX before being acquired by Australia's S8 in 2006, which was then swallowed up by MFS. Shaw and Grafton then purchased the Serko assets from MFS in 2007, according to a timeline on the website.
Of the $17 million raised, $11.3 million will be held to fund capital initiatives, especially targeted at its drive for growth across the Asia Pacific region, 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, according to its prospectus lodged with the Companies Office.
Serko forecasts net cash of $9.9 million on 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.
The software-as-a-service company is forecasting losses for its 18-month forecast horizon, but chairman Simon Botherway has said he doesn't anticipate raising more funds with Serko expected to be operationally cash-flow positive by the end of 2016.