Tēnā koutou katoa. Ngā mihi nui kia koutou katoa i tēnei ahiahi. Nau mai, haere mai ki tēnei hui a tau. Kia ora. Good afternoon. My name is Claudia Batten. I'm the chair of Serko. I'm pleased to see so many shareholders and familiar faces joining us today. Of course, we also welcome our shareholders joining online. Some housekeeping matters before we start. For those shareholders and proxy holders who are attending the meeting in person and who are entitled to vote, you should have received a voting card when you registered upon arrival at the meeting. If you've not received a voting card, please go to the Link Market Services registration desk, where their representatives will be able to help you. Please turn your mobile phones to silent.
If there is an emergency and we need to leave the venue, please do so through the marked exits and follow the instructions of the venue staff. Toilet facilities are on this floor, just down the corridor. Those online will be able to vote and ask questions during the meeting. I'll provide you with further instructions as we progress. If you encounter any issues, please refer to the online portal guide, or you can phone the helpline on 0800 200 220. We will be using some slides during the meeting. For those of you online, you'll be able to see these and follow along. They will also be made available on Serko's investor website. It is my pleasure to introduce my fellow directors. Jan Dawson, Independent Director and Chair of the Audit, Risk, and Sustainability Committee.
Clyde McConaghy, Independent Director and Chair of the People, Remuneration, and Culture Committee. Darrin Grafton, executive director, CEO, and co-founder, and Bob Shaw, executive director, chief strategy officer, and co-founder. I am the only director who is standing for re-election today, and as a result, I'll hand over to Clyde McConaghy to run the voting process for that re-election resolution. I'd also like to welcome the members of Serko's management team and staff in attendance. Finally, I'd like to welcome our external auditors, Deloitte, our lawyers, Flacks & Wong, and also the team from our share registrar, Link Market Services. They will help conduct the voting on the formal business later in the meeting and also act as scrutineer. Now, for the formalities of the meeting.
For those of you online, you can send through your questions at any time through the online portal by using the Ask a Question button. I would encourage you to do so as early as possible, as this will allow us to answer those questions at the appropriate time of the meeting. The company secretary has confirmed to me that the notice of meeting has been sent to shareholders and all other persons entitled to receive it. I confirm that the requirement for a quorum for this meeting of three shareholders has been met. I declare this meeting open. The items of business for this meeting and the resolutions to be considered by shareholders are contained in the notice of meeting.
Darrin and I will begin by providing an overview of the highlights from FY 2023, our plan to deliver on our goals for FY 2024, as well as an outlook and trading update. There will be an opportunity to ask questions after our addresses. We will attend to the formal business of the meeting. Voting on all resolutions will be conducted by way of poll. Shareholders attending virtually will be able to cast their votes using the electronic voting card received when online registration is validated. Please refer to the online portal guide or use the helpline specified. Our 2023 financial results reflect Serko's dedication and agility across a 3-year period that commenced with the pandemic, an event which had the potential to destroy the business.
The passion and dedication of Darrin, his leadership team, and the Serko staff are the key reason for Serko having faced down the challenges and being in the strong position that we are currently in. The other key reason is you, our shareholders. We would not be here without the support you've shown us. Thank you. We completed the financial year with a deep sense of accomplishment. We undertook to maximize the business travel recovery and deliver significant growth under our Booking.com for Business partnership. We achieved both in an often complex and uncertain external environment. We remain well-capitalized, with cash on hand as at 31 March of NZD 87.7 million. Cash burn peaked in the first half of 2023. Cash burn peaked in the first half of 2023.
During the financial year, underlying average monthly cash burn reduced from NZD 3.3 million to NZD 2.7 million. Underlying average monthly cash burn in the second half of FY 2023 was NZD 1.8 million. We're in a strong position, with the job by no means done. We are relentlessly focused on achieving our FY 2025 revenue and profitability goals. These goals will be achieved through winning in our chosen markets, achieving global scale and operational efficiency, and building a globally competitive business. We've been targeted and disciplined in what we invest in and how we set goals, measure progress, and execute. This will continue. In particular, we will increase the international expertise across all disciplines, expand our experimentation-based approach to product development, evident most recently in our work on the Booking.com for Business platform.
Finally, we will embed data-driven decision-making and a systems approach across the entire organization. Serko believes a sustainable approach means doing the right thing by our business, people, customers, and communities. This will drive our long-term value. As part of our commitment to sustainability, we're currently working with internal and external stakeholders to identify and assess the most important issues for us to measure, manage, and report on. We have steadily advanced our sustainability journey over the past year, and we've reported solid progress against environment, social, and governance categories. We're committed to continually improving what we focus on. We encourage you to read our recently released ESG report that's on our website. The key board priorities for the year are supporting the company to deliver growth in Booking.com for Business in North America and delivering scale.
These priorities will drive the achievement of our FY 2024 and FY 2025 goals, including profitability. Critical to scaling will be the support and development of our talent, and ensuring that we have robust succession planning across the business. The board advisors that we've put in place across our North America strategy, technology, and booking strategy are providing significant value as we continue to scale up. We've specifically targeted advisors who have direct experience scaling tech companies internationally. We've previously signaled our intention to appoint an additional independent director to the board, and it remains our intention to do so. We also continue to assess the needs and makeup of the board to ensure it's best placed to meet the challenges and opportunities ahead. We've also enhanced how we communicate with shareholders, including aspects of our financial reporting.
We're pleased with the positive feedback that we've had, and we're committed to making continued improvements. I will now hand to Darrin for his address before I comment on outlook and continue the meeting.
Thank you, Claudia. Welcome everybody. I'm pleased to have several members of the executive and leadership team here today. I'll just ask them to stand up as I call their names. Nick Whitehead is our Chief Marketing Officer. Shane Sampson, CFO. Charlie Nowaczek, our Chief Operating Officer. Jason Hawthorne, our General Counsel. Victoria Loveday is our Senior Legal Counsel and Company Secretary. Rachael Satherley, Chief People Officer. Thank you. The progress over the last 12 months has been incredible. The team at Serko have delivered exceptional results and world-class technology. We asked you to support us during COVID, while we focused on building the technology needed for the recovery. COVID was an incredible test of the Serko business and the team's resilience to stay true to what we could control.
I personally would like to thank you, as shareholders, for the faith you have shown in us. I would also like to thank the team. To be able to stand here today and present these results is also a proud moment as a CEO. We've accelerated our platform modernization, building a world-class e-commerce platform for Booking.com for Business. We created a world-class data and A/B testing capabilities across our product and company, and have delivered technology at scale to support the global travel recovery. We've also built modern frameworks that will enable third parties to build onto our platforms in the future. We have delivered a solution that has brought the two sides of our managed travel market and unmanaged travel markets together with the recent launch last week with CWT and the new and exciting content for business travel.
We have done this through a disciplined approach to cash management and investment. We are now firmly focused on our current delivery program to ensure FY 2024 is an even more rewarding year for all. The next 12 months will be exciting, as we are now at the scaling phase following these investments, including the scaling of our customer base. Total income increased 154% to NZD 48 million, reflecting the business travel recovery and Booking.com for Business growth. Total income was well ahead of the guidance provided at the start of FY 2023, of approximately doubling revenue. We closed FY 2023 just ahead of our revised guidance range of NZD 42 million-NZD 47 million. The progress we've made in the past 12 months reflected focused execution on our growth plans and prior investments.
In particular, we successfully rode the business travel recovery wave in our home markets of Australia and New Zealand, and there has been a significant growth under the Booking.com for Business partnership. The investments made in FY 2023 and previously were targeted and disciplined. We have invested in the right capability and technology to increase the scale and operational efficiency. We can see the benefits of those investments in these results. An example is the growth in unmanaged revenue. During FY 2023, we defined how we could achieve the outcome we believed was possible as the market recovered. We broke these objectives down into 5 key areas. 2 of these are the revenue generation areas, in 2 and 3, and the other areas are the underlying frameworks that drive revenue and Serko's long-term success.
I'll go into more detail on the revenue objectives and culture on subsequent slides, but we'll briefly touch on the other two now. The first of these being product health foundations, part of the customer success and focus on our ability to measure the impact our technology has on the customer. We experimented with new ways to produce better conversion of bookings, stability, and performance of our platforms, and features needed to truly make a difference as the travel industry recovered. The second of these objectives is platform foundations. As we drive towards higher scale global transactions, we needed to make sure our technology would stay ahead of this demand, and have undertaken a number of initiatives to support this. These are already changing how we build, measure, and drive Serko, as well as strengthening our position for the future.
During early FY 23, Serko and Booking.com set about an approach for success based on some foundational work needed for conversion, scale, and experimentation. Booking.com shared key resources to enable Serko to build out our data platform and experimentation technology that has now changed the way we build our products. This overall work together as partners reflected on the graphs on the screen. This has enabled Serko's strong revenue growth and underpinned our confidence in the outlook statements we have made. The CWT partnership deepens the Booking.com for Business offering and enables a wider appeal to business customers. It also brings two of our key partners together, while delivering new and exciting content for business customers across the world.
The addition of CWT content is a significant step in delivering on our strategy of bringing the best of business travel to booking for business, and is the culmination of many months of planning by CWT and Booking.com. The new offering and platform went live last week. We are continuing to bring new supply content online over the coming period. We now enter the phase of scaling, which will see Serko focus on engagement with the existing migrated customer base, and also other ways of attracting more customers to the platform. I'd like to show you a video highlighting the direction of the offering.
Booking.com for Business now has an expanded offering, with a full range of discounted business rates, as well as loyalty points and on-demand travel agent support. Zeno's flexible content engine has combined the best of the Booking.com experience with servicing and additional accommodation, flight and ground transport options from our travel management partner, CWT. You can now save up to 20% on travel, unlocking corporate rates at your favorite hotels, airlines, and car rental companies that were previously only available to large companies. You can choose to maximize loyalty points on your trip, get flexible cancellation rates, or simply find the cheapest deal available across 150,000 destinations around the world. Every trip comes with the peace of mind that you can contact a travel agent for assistance anytime, day or night. Best of all, there's no subscription, booking, or travel support fees.
It's all completely free. Booking.com for Business, the ultimate tool for business travel.
Thank you. Serko has continued to gain market share, and through its channel resellers, has secured one of the largest travel accounts in Australia, which is currently onboarding this month, and we should see transactions in the second half of this calendar year. In North America, we have continued to build our strategic position in this market and sign new reseller agreements. As mentioned, the team at Serko have been working with the wider executive team at CWT to bring about the addition of the CWT content. We see this as an example of the opportunities available to us in North America. We have launched new updates to our expense technology within the market and are planning new innovations in the space with key customers. We have continued to develop technology to support NDC, a data standard that allows airlines to evolve how they personalize and sell inventory.
Serko has already successfully collaborated with Visa, CWT, and United Airlines to deliver a significant NDC project, and Serko has continued to work on NDC connections with airlines in Australasia and the USA, including Qantas, United, and American Airlines. Serko has also committed to working closely with Sabre to assist the progress of NDC and other initiatives needed for the global marketplace. Our investments in people have been beyond targeted new roles to support scale and growth. We've invested in establishing the pathways and tools for our people to advance within Serko, ensuring we retain and grow our people.
As a result, we have seen a significant shift in our monthly pulse survey score for, "I have access to the learning and development I need to do my work, to do my job well," which improved from 62% favorable in March 2022 to 85% favorable in March 2023. The pulse result for learning is a core employee happiness metric for high-performing technology staff, and we see this as a significant improvement. We've also continued to strengthen our approach to diversity, publicly producing our Mind the Gap report, and holding ourselves accountable for striving towards our diversity and inclusion goals. We are focused on improving our operational leverage. This is taking place through a number of initiatives.
Examples of these include fine-tuning how we allocate our resources across multiple markets to achieve the right cost-to-benefit balance, restructuring our expense division to materially increase efficiency, while also innovating our expense product to drive further revenue and customer growth, and expanding our China offices to access additional talent to complement other locations. During FY 2024, we will use the insights from Serko's 16 years of history in managed travel to enhance the booking experience for Booking.com for Business platform. In Australasia, our focus is to retain and grow our customers through innovating in response to customers' needs and demands. This includes new innovations such as NDC on Sabre, and improving the online booking change and servicing process for both customers and resellers. We'll be paying particular focus for delivering advanced work around reducing friction in online changes and across operational systems.
We'll be bringing these key innovations and functionality proven in this market to North America, where we are committed to driving customer growth via our travel and expense offering. We will continue to drive our platform scale and capabilities through further investments, including AI and emerging technologies that can help shift how we build, and also how our customers use our technology through these advancements. We also continue to ensure we have the right people with the right experience as we scale. On that note, we are pleased to announce the appointment of Joydip Das into the new role of Chief Product Officer last week. Joydip's track record as a global product leader will propel our efforts to be a product-led company that is working to create a connected, frictionless business travel experience. To our valued customers and partners, thank you for your support.
We love what we do, and it's our privilege to deliver the technology that supports your people and your business. Thank you. I'll now hand back to Claudia.
Thank you, Darrin. We've had a solid start to the financial year, with business travel demand tracking strongly to date. We are pleased to affirm our guidance provided in May, and if June 2023 quarter trends continue, we anticipate total income to be above the midpoint of this guidance range. As well as top-line growth, we're focused on continued cost discipline and operational efficiency as we track towards positive cash flow for the FY 2025 financial year. Thank you to my fellow directors and to everyone at Serko. You've stepped it up to another level this year, and our work continues. Thank you again to our shareholders. Your commitment has meant we've been able to continue to invest to maximize opportunities, and we are seeing the benefits of this.
Our commitment to you is that we are 100% focused on executing our strategy and to building a globally competitive, profitable business. Thank you. I would now like to give shareholders and proxy holders, both here in person and online today, the opportunity to ask questions of the board, management, or the auditors. Shareholders online can continue to provide questions through the portal, and we'll also address questions from the room. When I call for questions, can shareholders present in the room, please wait until a microphone is provided to you, and clearly state your name before asking the question. I will take questions from those present first, before moving on to any questions from shareholders online. There will also be an opportunity to ask questions on each of the proposed resolutions during the formal business session. Beginning with any questions from shareholders in the room.
We've got one. Fabulous. Hi, just waiting for a microphone for you.
Hello. I just wonder if I can ask you a bit about Booking, your relationship with Booking. Are they an independent? They're an Australian company, a private company, but they operate tourist travel agents throughout Australia, and then they use your platform. When you go to America, are Booking, are they in America, too, to do the same thing?
Sure. I'll let Darrin, I'll just let Darrin answer that.
This is a big company? [crosstalk] offices in England and America?
Booking.com is one of the largest travel companies in the world. It's NASDAQ-listed, founded out of Amsterdam, and is part of the wider Booking Holdings group, which covers brands such as Kayak, Booking.com, OpenTable, to mention a few. They're actually worldwide. Our technology spans over 180 countries with them today, you know, around 600,000 companies is what we've sort of talked about. That's kind of the size of the offering. Booking.com is, I think, the largest brand in our sector.
They use totally your technology.
For the business side, they use our technology, correct. Totally. Yep.
Sounds good.
Yeah. Yeah. It's looking good. Are there any other questions in the room?
Can I just ask you, too, then?
Yeah.
It's nice that you made a not a profit, a cash flow positive. You're doing well with your cash flow. I hope that you get, make, start making a profit in the next few years, because getting a profit is so positive, and it's encouraging for everybody.
Yeah, we're very, very focused on achieving that.
Yes.
Thank you. I'll go to any questions online. Nick, are there any questions online?
We do have a question online, Claudia, which is from Barry Lindsay of the New Zealand Shareholders' Association. Barry's question is: "I am the proxy holder for the New Zealand Shareholders' Association, the NZSA, which supports directors owning shares in the companies on whose boards they sit. It has a policy to ask, 'Why not?' when a director has chosen not to own shares. It would appear that Director Jan Dawson owns no shares in Serko. Could she please explain why she has chosen not to be a shareholder in the company?
Sure. I'll let Jan speak for herself. I think these are on.
Thank you, and I have, too, have a policy of owning shares in companies that I sit on the boards of. However, with Serko, the opportunities, given the nature of things that we've been looking at over the past 12 months, has meant there hasn't been an opportunity for me to purchase shares. Obviously, given where the share price has been, I would have preferred to have bought before now, given the increase over the last little while, but at the first opportunity, I intend to purchase. Thank you.
I'll just add to that we have had a fixed trading plan in place previously for directors to purchase. We were actually just talking this morning about putting that back into place at some point. We definitely are committed to that as well. Are there any other questions online?
There are no further questions online.
Great. If there are no further questions at this point, thank you, we'll move on to the formal business to be addressed at the meeting. You may ask questions on each matter being put to shareholders today. The resolutions that we'll be voting on will be displayed on the screen. Shareholders joining us in person today, you would have been given your shareholder voting card. Shareholders joining online will be able to cast their vote using the electronic voting card received when online registration is validated. To vote, you'll need to click Get Voting Card within the online meeting platform. You'll be asked to enter your shareholder or proxy number to validate. Please mark your voting card in the way you wish to vote by clicking For, Against, or Abstain on the voting card.
Once you've made your selection, please click Submit Vote on the bottom of the card to lodge your vote. Please refer to the virtual meeting online portal guide or use the helpline specified if you require assistance. Voting will remain open until five minutes after the conclusion of this meeting. Results of the vote will be announced via the exchanges. Each of the resolutions set out in the notice of meeting are to be considered as an ordinary resolution, and as such, must be approved by a simple majority of the votes cast by shareholders entitled to vote in voting on the resolution. Proxies have been appointed for the purposes of this meeting in respect of approximately 81.9 million shares, representing approximately 67.3% of the total number of shares on issue. The results of the proxies will be displayed following voting.
I will now hand over to Clyde McConaghy, Chair of the People, Remuneration, and Culture Committee, to run the voting on the first resolution as it relates to my re-election as non-executive director. Thank you, Clyde.
As Claudia mentioned, the first resolution relates to her re-election as a director, and therefore, she is unable to, and not wishing to, run that part of this meeting. The board recommends Claudia to you as a non-executive director and unanimously supports her re-election. I'd like to say a few words about Claudia. She is the director the longest time I've worked with a director in any board I've served with, around the world. It's an uncommon privilege to have spent so much time working with her. Have no doubt, we challenge each other's views commonly, I don't take it all for granted, the insights that she offers on how to build shareholder value, and a good, stronger company.
Claudia has the brains, the independence, and the drive to lead as our chair, with an unwavering commitment to Serko, the founders, the team, and indeed, you, the shareholders. The whole board wholeheartedly endorses her re-election. Claudia, I'll invite you to say a few words about your re-nomination, too. Thanks.
Thank you, Clyde. Tēnā koutou katoa. Ko Claudia Batten toku ingoa. Kia ora. Good afternoon. In February 2020, the Serko board held a defining board strategy day. With the wider executive present, we agreed the plan for the 2021 financial year that would establish a foothold in North America, commence a well-developed migration plan for Booking.com, and advance some operational measures that would support us to scale the business for the international growth that we planned. We emerged with a robust strategic plan and a clear sense of priorities. 1 week later, we started to see a flicker of change in the travel industry. 2 weeks after that meeting, we were scrambling to rewrite our entire business plan. 3 weeks later, New Zealand shut its borders. 1 month following that meeting, I was appointed interim Chair of Serko.
It's just over 3 years since I became interim chair and 2 and a half years since I was appointed chair. Today, I seek re-election as a director. I see my role as chair is to support the company to execute the opportunities that Darrin and his team see in the market, occasionally sense-checking and always pushing for world-class execution. A key part of that is ensuring that we have the talent on the board for that perspective and wisdom. I cannot thank my fellow NEDs enough for their support. Bringing Jan Dawson onto the board has been a massive uplift for the company, demonstrating how excellent governance drives performance. Jan, your wisdom and experience has been a bedrock. Clyde McConaghy has been equally a massive support.
Clyde, you have been a tireless champion and challenger for us around the board table and have supported some pivotal decisions for the company. We have a big couple of years ahead of us. I remain deeply committed to Serko and the work that we need to do to deliver a globally successful travel technology company from New Zealand. I thank you for your continued support of me, the board, and the company. Nō reira, tēnā koutou, tēnā koutou, tēnā koutou katoa.
Could I ask those on the floor, if there are any questions relating to this resolution? No. Nick, could I ask if there are any questions online?
There are no questions related to this resolution. There is another general business question, which we'll get to later.
I'll defer that to Claudia when she stands here again. If there are no further questions, I would invite all shareholders, in the methodology outlined earlier, to vote for, against, or abstain on resolution one on their voting card. Give time for that. I'll now hand back to Claudia, as chair. Thanks.
Thank you, Clyde. Resolution 2 relates to the fees and expenses of Serko's auditors. The proposed resolution is to authorize the directors to fix the auditors' fees and expenses for the current year. In accordance with the Companies Act, Deloitte has been automatically reappointed as the company's auditor. Details of the statutory audit fees paid to Deloitte for the financial year ended 31 March 2023 are set out in the 2023 annual report. I now propose as an ordinary resolution that the directors are authorized to fix the fees and expenses of Deloitte as auditor for Serko Limited. Are there any questions concerning the motion from shareholders in the room? If not, I'll go to any questions online.
There are no questions with regard to this resolution.
Thanks, Nick. If you could now please select either for, against, or abstain on resolution 2 on the voting card. Shareholders joining online, you can now submit your vote. Voting will be open until 5 minutes after the conclusion of the meeting. For shareholders present with us in the room, Link are here, and will now move through the room to collect your voting cards. That completes voting on the resolutions. At this time, I'd like to advise the outcome of proxy votes that were lodged in respect of each of the resolutions. I will not read the proxy results for each resolution, but they are now showing up on the screen. I would now like to give shareholders a final opportunity to ask questions, whether related to the presentations, the financial statements, or the management of the company.
You can continue to provide questions online, and we'll address questions already submitted online as well. To Nick's point, I know there is one sitting there. I'll start with the room. Are there any questions from shareholders in the room? One more.
Can I ask about your competition? I guess that's always a form of business service.
We'll just get a microphone. I know you're asking about our competition, but just for completeness.
Can I ask you about your main competition, your competition, okay? I guess that's always a big issue with any company, isn't it?
It's 101.
You everything depends on your relationship with Booking and, like, EBOS recently, they were dropped, weren't they, with the Chemist Warehouse? You have to be very careful with that relationship and have good people.
Building great relationships with your partners is always key, is to be building great relationships with your partners as well. We meet very regularly across all of the executive and leadership team consistently with Booking. You can see only last week we launched the CWT partnership with Booking, bringing new content and line in there. We have another side of our business which works with all the travel management companies, which is like the Flight Centre, American Express GBT, CWT, and Orbit in New Zealand. We have quite a variety of how we partner as well. The competitors range, there's not really anything in the unmanaged space, but there's a variety of ones that sit inside the managed travel space that, of course, we love to kind of build and win against as well.
Nick, you said there was one question online, but there might be more by now.
We do have a question online from Barry Lindsay: Does the Booking.com partnership have a finite life, and are you able to give us an idea of its importance to Serko's future?
Yeah, I mean, Booking.com is an incredibly important partner, to us, and the current contract renews in October. 2024 is when that. We'd hope to give guidance around the renewal towards our full year results next year before that renewal.
Are there any more questions online, Nick?
There are no further questions online.
Well, thank you for your attendance at Serko's annual meeting, both here in person and online. I now declare the meeting closed. The results of the meeting will be released on the NZX and ASX as soon as possible. Thank you, and good afternoon.