Wednesday 22 November 2017

Hostelworld would consider debt raise

 

The company is debt-free and posted results that were well-received by the market (stock pic)
The company is debt-free and posted results that were well-received by the market (stock pic)
Gavin McLoughlin

Gavin McLoughlin

Hostelworld would be willing to raise debt to fund big acquisitions, according to its chief executive Feargal Mooney.

The company is debt-free and posted results that were well-received by the market.

After issuing a profit warning earlier in its financial year, last Tuesday the company posted 1pc growth in adjusted earnings before interest, taxation, depreciation and amortisation, despite revenue falling.

Mooney said the company was "certainly open to looking at acquisitions".

"We will remain very focused," he said. "We believe the key to our success is that we have been very focused on hostels and that whole social travel experience, and we'll continue to be focused on a social travel experience.

"We're not going to go out and buy some hotel-booking business or something that's kind of left-field. We want to make sure it's something that's complementary."

The business generates strong cash flow, and Mooney said it would be able to fund "a lot" through that channel, despite a policy of paying out 70pc-80pc of profits as dividends. If something bigger emerged, the business is debt-free and would be in a strong position if it needed to raise money that way, he added.

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