Hostelworld shares slump amid ‘underwhelming' trading in first half of year
, the hostel booking group that targets millennial and Gen-Z backpackers, saw its shares slumped in early trading on Thursday after saying its net bookings and revenues were flat in the first six months of the year.
Still, the Dublin-based group's chief executive Gary Morrison said that he has been encouraged by more positive booking trends in June.
Davy analyst Paul Ruddy characterised the start to the year as 'underwhelming'.
Shares in Hostelworld fell as much as 11 per cent to £1.26 in early deals in London, where most of the trading activity in the stock takes place.
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Net revenue for the six months amounted to €46.7 million, unchanged compared to the same period last year, while net bookings were also flat, at 3.7 million, and the average booking value dipped 1 per cent to €13.40.
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However, June booking volumes and average booking values were up in June, boosted by a strong pick-up in demand among European travellers for beds on the continent – helped by a modest decline in bed prices. Last year had seen travellers shift bookings towards low-cost destination in Asia and central America.
'Trading over the last six months has been in line with expectation,' said Mr Morrison. 'Although trading in the first half showed mixed results across regions and channels, we are encouraged by the positive trends observed in June.'
Hostelworld said in a strategy update in April that it plans to return to paying dividends this year for the first time since before the Covid-19 pandemic, as the hostel-booking group also eyes 'selective' deals to broaden its business.
It aims to return to a progressive dividend policy of 20-40 per cent of net profits, starting with an interim payment in the second half of this year.
The group reached an important milestone in 2023 when it repaid €28.8 million of high-cost loans drawn down from US specialist lender HPS Investments three years ahead of schedule. This was facilitated with the help of €17.4 million of much cheaper loans from AIB, all of which has since been paid back ahead of schedule.
The company also agreed with Revenue early last year to repay €9.6 million of warehoused taxes, racked up during the Covid-19 pandemic, over the next three years.
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