Monday, July 22, 2024

Earnings jump 88pc at Hostelworld

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Adjusted earnings before interest, taxes, depreciation and amortisation soared to €5.1m in the first six months of the year, up 88pc from the same period in 2023.

Net bookings reached 3.7 million, up 9pc year-on-year.

However, the net average booking value fell 10pc to €13.60 in the same period. Hostelworld attributed the decline to a rise in the number of bookings for Asian destinations, as well as a slight increase in the number of solo travellers.

As a result, net revenues stood at €46.1m at the end of the first half, up 1pc from the corresponding period in 2023.

Operating costs declined by 2pc to €12.5m.

“Over the balance of the year, we expect consumer demand for low cost destinations to continue, resulting in revenue growth lagging net bookings growth on a FY basis,” chief executive Gary Morrison said.

Direct marketing as a percentage of revenue was 45pc in the period, down from 51pc a year earlier. This led to a net margin growth of 23pc, Hostelworld reported.

“This net margin growth coupled with our continuing focus on cost has delivered an 88pc increase in adjusted Ebitda year-on-year, which has enabled us to fully repay our residual debt facility with AIB, well ahead of schedule,” Mr Morrison added.

In May, Hostelworld announced that it would be able to pay the remaining €7.5m balance of the AIB term loan by the end of the first half of 2024, two years ahead of schedule.

This early repayment was expected to deliver a cash interest saving of €500,000, the company reported at the time.

“The group reiterated FY24 adjusted Ebitda guidance at market consensus (currently €21.4m),” Davy analyst Paul Ruddy wrote in a note to investors.

“Encouragingly, direct marketing is down to 45pc of sales (from 51pc) as the group derives benefits from further improved app

bookings,” Goodbody analyst Dudley Shanley added.

“Hostelworld remains in a strong position with high-single digit bookings growth and an increasingly engaged social strategy,” Mr Shanley wrote.

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