Earnings fall 15pc at Hostelworld on the back of lower demand
Adjusted earnings at online booking platform Hostelworld have fallen 15pc to €8.9m in the six months to 30 June.
The performance, which saw revenue fall to €38.8m from €42.6m the prior year, was impacted by “somewhat lower than anticipated” booking demand over the peak summer period.
In addition, the group was affected by the full roll out of its free cancellation product being included for the whole period for the first time.
During the first half of 2019 Hostelworld had 3.5 million bookings on the site, down from 3.9 million in the corresponding period last year, according to interim results from the group.
Earnings before interests, taxation, depreciation, and amortisation for the full year is likely to be below 2018, Gary Morrison, CEO of Hostelworld, said.
“We continue to operate in an attractive and growing market, and I remain confident about the opportunity to capitalise on the significant growth opportunities we have identified.”
“I believe the operational and strategic improvements we have put in place in the first half, should enable us to return the business to volume growth during 2020 and we continue to assess opportunities, both organic and inorganic, which could enable us to accelerate that growth," he added.
Elsewhere, the Dublin-listed group’s average booking value ("ABV") of €12.8 was a 6pc increase on Half 1 2018, and a 2pc increase on a constant currency basis.
Meanwhile, execution of the company’s ‘Roadmap for Growth’ strategy, designed to return Hostelworld to growth in 2020, is “progressing well”.
Analysts at Davy Stockbrokers said that while their like-for-like forecasts will come down by circa 11pc and 15pc for 2019/2020, “progress on the strategic reshaping of the business should underpin increased confidence in the company’s mid-term prospects.”