Sunday 17 December 2017

Hostelworld revenue jumps 5pc as profits dip by €4.6m in IPO year

Hostelworld: shares down almost 30pc
Hostelworld: shares down almost 30pc
Michael Cogley

Michael Cogley

Revenue at Irish travel website Hostelworld increased by 5pc to €83.4m last year as profits at the firm dipped by €4.6m.

Hostelworld floated on the London and Irish Stock Exchanges in November, raising €173.6m in the process.

The company's earnings before interest tax depreciation and amortisation (EBITDA) fell by 12.6pc to €23.6m. EBITDA improved in the second half of the year, up €3.6m than on the first six months of the year.

Profit after tax fell to €21m despite an increase of 5pc in the average booking value, up to €12.1.

The firm splashed out an extra €8.5m on marketing last year which included a €3.2m brand re-launch.

Hostelworld chief executive Feargal Mooney said the firm will see the full benefit of its brand investment next year.

"The new financial year has started well and in line with our expectations. The strength of our brand and technology together with healthy booking numbers and continued pricing improvements, underpinned by a growing marketplace, gives the board confidence in the group's future prospects," Mr Mooney said.

Asia was the fastest growing destination region for bookings on the site with South Korea now the seventh highest nationality for hostel bookings.

The company paid out its first dividend of 2.75c per share, which amounts to between 70 to 80pc of adjusted profit after tax since the initial public offering.

Davy Stockbrokers said the firm's first results statement "hits all the right notes".

"Hostelworld’s maiden results statement is encouraging with a 3pc earnings beat, reassuring outlook and strong progress made against each of the company’s four strategic growth pillars: pricing, brand, mobile and Asia," the company said in a note this morning.

Share prices in the firm were up 2pc to £2.54 (€3.17).

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