Serko lifts guidance range for 2019 revenue on Flight Centre negotiations

Serko lifts guidance range for 2019 revenue on Flight Centre negotiations.Photo: Lynn Grieveson

Serko, the online travel booking software developer, has lifted its 2019 revenue expectation slightly due to a planned extension of its partnership with Flight Centre Travel Group.

Its guidance range is now for revenue growth between 20 and 30 percent in 2019 from 2018's $18.3 million, compared to earlier guidance of 15 to 30 percent growth. In previous guidance, Serko has said it doesn't expect growth in earnings before interest, tax, depreciation and amortisation from 2018's $2.2 million, due to the cost of its expansion in Europe and North America.

Flight Centre and Serko will now negotiate a contract variation, which they intend to be effective by Sept. 1, which would see Flight Centre's brands across Australia, New Zealand and Asia use Serko software until at least April 2022, and its technology also used in the US, Canada and Mexico. Flight Centre will also pay an "ongoing development contribution" to Serko until at least April 2019, prompting the guidance upgrade.

Serko said that if a binding contract variation is agreed, it expects the relationship with Flight Centre to lift revenue in 2020 as well, and it will give a further update at its annual meeting on August 22.

The shares last traded at $2.75, and have gained 26 percent this year.