A revamp of its namesake brand seems to have had the desired effect for online booking platform Hostelworld (HSW) at its maiden full-year results. Marketing spend represented 45 per cent of net revenue in 2015, compared with 36 per cent in 2014, following a major UK advertising campaign and brand relaunch. The impact on bookings has been positive. Bookings rose 21 per cent in the second half of the financial year, against a 14 per cent rise during the first. Chief executive Feargal Mooney said the group's marketing spend would remain between 45 and 50 per cent of revenue in 2016, and be weighted more towards digital campaigns in its top five markets.
The group swung to an operating profit after taking no impairments in the period, compared with the €50.7m (£41m) taken last year on its Hostelbookers brand. It helped that 21 per cent of bookings came via its Elevate platform, which commands a higher commission rate in return for increased prominence in search results. This was up from 15 per cent in 2014. Mr Mooney said when the product was launched a couple of years ago he wanted to reach 30 per cent penetration, which "looks do-able in the next 12 to 18 months".
Joint house broker Numis expects adjusted pre-tax profit of €22.3m in 2016, leading to EPS of 22.2¢, compared with €21.4m and 22¢ in 2015.
| HOSTELWORLD (HSW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 248p | MARKET VALUE: | £237m | |
| TOUCH: | 243-248p | 12-MONTH HIGH: | 249p | LOW: 193p |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 70 | |
| NET ASSET VALUE: | 174¢* | NET CASH: | £13.6m** | |
| Year to 31 Dec | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012Ɨ | 52.0 | -16.2 | -8.1 | na |
| 2013Ɨ | 57.2 | -29.6 | -12.3 | na |
| 2014 | 79.3 | -77.0 | -24.0 | na |
| 2015 | 83.5 | 80.5 | 4.5 | 2.8 |
| % change | +5 | - | - | - |
Ex-div: 28 Apr Payment: 31 May *Includes intangible assets of €159m, or 166¢ a share £1=€1.25 **Includes restricted cash balances of £2.2m Ɨ Pre-IPO figures | ||||
