Fickle travellers are now able to cancel their booking with Hostelworld (HSW) anywhere in the world. This feature went global in July, but was applicable across Europe from April. It also coincided with the introduction of new rules around reporting deferred revenue. Around €4.2m (£3.7m) was deferred to future periods, since revenue received cannot be recognised until the cancellation date has passed, contributing to a 9 per cent fall in sales during the reported period to €42.6m, with adjusted cash profits down by nearly a quarter to €9.8m.
However, strip out the impact of the new accounting rules and cash profits were up 9 per cent at constant currencies. Good weather encouraged more would-be travellers to opt for a staycation. Chief executive Gary Morrison said the World Cup and warm weather across Europe led to “softness in bookings” during the peak summer months of July and August. If this trend continues for the remainder of the financial year, then full-year bookings are expected to be flat on last year. During the reported period bookings were up 2 per cent to 3.96m, driven mainly by the group’s core Hostelworld brand.
Analysts at Numis expect pre-tax profits of €18.1m during 2018, giving EPS of 17¢, down from €22.4m and 22¢ in 2017.
| HOSTELWORLD (HSW) | ||||
| ORD PRICE: | 267p | MARKET VALUE: | £255m | |
| TOUCH: | 267-272p | 12-MONTH HIGH: | 425p | LOW: 261p |
| DIVIDEND YIELD: | 5.7% | PE RATIO: | 32 | |
| NET ASSET VALUE: | 144¢* | NET CASH: | €22.9m | |
| Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
| 2017 | 46.6 | 5.18 | 4.60 | 5.1 |
| 2018 | 42.6 | 2.83 | 2.14 | 4.8 |
| % change | -9 | -45 | -53 | -6 |
| Ex-div: | 30 Aug | |||
| Payment: | 21 Sep | |||
| *Includes €123m of intangible assets, or 129¢ a share £1=€1.11 | ||||
