TIDMHSW
RNS Number : 5924O
Hostelworld Group PLC
22 August 2017
Hostelworld Group plc
("Hostelworld" or the "Group")
2017 Interim Results Announcement
Strong first half and on track to meet Full Year
expectations
Operational Highlights
-- Strong H1 2017 performance
-- Group bookings growth of 11% (to 3.9m bookings) with core
Hostelworld brand up 21% during the period
-- Continued delivery on marketing efficiencies:
- Bookings from not-paid-for channels 62% of total (H1 2016:
61%)
- Marketing investment represented 41% of Net Revenue (H1 2016:
43%)
-- 50% of bookings coming from mobile devices, up from 43% in H1 2016
-- Strong Asia performance - inbound overall bookings growth of 18% (H1 2016: 10%)
-- New technology development centre launched in Portugal to enhance capability
Financial Highlights
-- Group Net Revenue increased by 16% to EUR46.6m (H1 2016:
EUR40.2M); 17% increase at constant currency, benefiting from an
increase in Average Booking Value of 3% (H1 2016: decrease of
6%);
-- Adjusted EBITDA increased by 27% to EUR12.9m (H1 2016:
EUR10.1m) adjusted EBITDA up 30% at constant currency
-- Adjusted EBITDA Margin increased to 28% (H1 2016: 25%)
-- Group Adjusted Profit after Tax of EUR10.3m (H1 2016: EUR7.7m)
-- Adjusted pro-forma Earnings Per Share of EUR0.11 (H1 2016: EUR0.08)
-- Underlying adjusted free cash conversion of 101% (H1 2016: 107%)
-- Cash balances of EUR17.7m at 30 June 2017, after payment of
2016 Final and Supplementary dividends in June 2017
-- Interim dividend of 5.1 euro cents per share (H1 2016: 4.8
euro cents), in line with stated dividend policy
-- On track to meet the Board's expectations for the full year
Feargal Mooney, Chief Executive Officer, commented:
"The Group has returned to growth, reflecting the strength of
the core Hostelworld brand, which now represents 92% of total Group
bookings and the success of our continuing product, marketing and
operational initiatives. The strong trading seen in the second half
of 2016 continued throughout the early months of 2017, with growth
in bookings across all geographies.
The level of growth in H1 2017 was somewhat flattered by a weak
comparative in H1 2016, and growth rates in the June to August
period have been more modest. Our expectations for the full year
outcome are nonetheless unchanged, and we have declared a 6%
increase in the interim dividend.
We remain confident in our long term strategy and execution and
will continue to manage the risks to our business posed by the
impact of terrorist attacks on travel demand alongside general
macro-economic uncertainties and currency fluctuations."
ends
For further information please contact:
Hostelworld Group plc today: +44 (0) 20 7067 0000
Feargal Mooney, Chief Executive Officer thereafter: +353 (0) 1
498 0700
Weber Shandwick +44 (0) 20 7067 0000
Nick Oborne/ Tom Jenkins
HOSTELWORLD GROUP PLC
INTERIM MANAGEMENT REPORT
To the members of Hostelworld Group plc
Cautionary statement
This Interim Management Report (IMR) has been prepared solely to
provide additional information to shareholders to assess the
Group's strategies and the potential for those strategies to
succeed. The IMR should not be relied on by any other party or for
any other purpose.
The IMR contains certain forward-looking statements. These
statements are made by the directors in good faith based on the
information available to them up to the time of their approval of
this report but such statements should be treated with caution due
to the inherent uncertainties, including both economic and business
risk factors, underlying any such forward-looking information.
This interim management report has been prepared for the Group
as a whole and therefore gives greater emphasis to those matters
which are significant to Hostelworld Group plc and its subsidiary
undertakings when viewed as a whole.
Strategic Update
The Group continues to make good progress in implementing our
key strategic objectives. In our most recent annual report, we
reported the Group's key objectives for 2017 which were:
(1) to invest in our Core Products competitiveness to ensure our
platforms are the preferred choice for the growing number of young
independent travellers worldwide to visit when planning their
trips;
(2) to Differentiate our offering delivering features unique to
the hostel product and enabling our customers to have a great
experience throughout the research, booking and travel period;
(3) to establish a vibrant Community that encourages engagement
with our platform, with other travellers and with hostels;
(4) to drive Revenue per Customer by increasing loyalty and
providing an enhanced and more personalised service to
travellers.
Financial Review
Key Performance Indicators
% Change Financial
% change Constant Year 2016
H1 '17 H1 '16 Reported Currency
------------------------------- --------- ------- ---------- ---------- ------------
Bookings - Hostelworld brand
(m) 3.6 3.0 21% 6.2
------------------------------- --------- ------- ---------- ---------- ------------
Bookings - supporting brands
and channels (m) 0.3 0.5 (43%) 0.9
------------------------------- --------- ------- ---------- ---------- ------------
Total Booking Volume (m) 3.9 3.5 11% 7.1
------------------------------- --------- ------- ---------- ---------- ------------
Average Booking Value ("ABV")
(gross) (EUR) 12.2 11.8 3% 4% 11.6
------------------------------- --------- ------- ---------- ---------- ------------
Net Revenue (EURm) 46.6 40.2 16% 17% 80.5
------------------------------- --------- ------- ---------- ---------- ------------
Adjusted EBITDA 12.9 10.1 27% 30% 23.9
------------------------------- --------- ------- ---------- ---------- ------------
Group bookings increased by 11% in the six months ended 30 June
2017 (2016: 4% decline) driven by strong booking performance in our
core Hostelworld brand in the period which grew 21% (2016: 16%).
The year on year comparative was partially due to a weaker six
months ended 30 June 2016 as a result of softer demand due to
terrorist attacks and other geopolitical events in European cities
during that period.
The Group's flagship brand, Hostelworld now represents 92% of
Group bookings as compared to 85% in the six months ended 30 June
2016. Reflecting our deliberate focus on the flagship brand,
bookings of the Group's supporting brands were 43% lower for the
six month period from January to June (2016: -51%). The associated
Total Transaction Values ("TTV") in the six months ended 30 June
2017 were EUR316m (2016: EUR284m).
While the Group operates in one segment and is managed as such,
business performance is reviewed on a bookings volume and average
booking value basis for both the Hostelworld brand as well as all
supporting brands (including Hostelbookers, Hostels.com, booking
engines and affiliates).
Group net revenue increased by 16% for the six month period from
January to June 2017, which corresponds to a 17% increase on a
constant currency basis.
Average booking value has been 3.5% higher in the current
period, reflecting an increase in the underlying base price per bed
and the continuing positive contribution from our pricing
programmes, including Elevate. The gains were partially offset by
the continued decline in the number of bed nights per booking as
bookings made from mobile devices continue to grow, representing
50% of total bookings in the six months ended 30 June 2017 (2016:
43%), Mobile customers however, transact more frequently than other
customers. Other offsetting factors included the evolving
geographic mix and the greater percentage of bookings into hostel
dorm beds. Exchange rate movements did not have an adverse impact
on average booking value in the six months ended 30 June 2017,
unlike in the same period in 2016.
The Group continues to maintain an efficient marketing mix with
marketing investment as a percentage of net revenue of 41% in the
six months ended 30 June 2017 as compared to 43% in the same period
in 2016. Bookings in not-paid-for channels increased to 62% of
total bookings (2016: 61%).
Adjusted EBITDA
The Group uses Earnings before Interest, Tax, Depreciation and
Amortisation, excluding exceptional items (Adjusted EBITDA) as a
key performance indicator when measuring and evaluating the
performance of the business from one period to the next, and
against budget. Exceptional items are non-recurring and by their
nature and size can make interpretation of the underlying
performance in the business more difficult. We believe this
non-GAAP measure more accurately reflects the key drivers of
profitability for the Group and removes those items which do not
impact underlying trading performance, thereby making comparisons
more meaningful and useful for stakeholders of the business.
Group Adjusted EBITDA of EUR12.9m has increased by EUR2.8m (27%)
relative to the six months ended 30 June 2016 and by 30% on a
constant currency basis. Adjusted EBITDA as a percentage of net
revenue increased from 25% to 28%. Marketing spend per booking is
broadly stable at EUR4.97 (2016: EUR4.93).
Administrative expenses increased by EUR3.8m to EUR34.2m in the
six months ended 30 June 2017. EUR2.2m of this increase was
attributable to the increase in marketing expenses from EUR17.2m to
EUR19.4m in the six months ended 30 June 2017, which contributed to
revenue growth of 16%.
Gross staff costs (excluding share based payment expense)
increased from EUR8.6m to EUR9.4m. Average headcount decreased from
249 in the six months ended 30 June 2016 to 240 in the six months
ended 30 June 2017. Excluding the impact of the level of
development labour capitalised in accordance with IFRS standards
(2017: EUR0.4m; 2016: EUR1.2m), share based payment expense and the
impact of a bonus accrual in H1 2017, staff costs decreased by 2%
on a constant currency basis.
Other administrative expenses incurred between January and June
2017 are broadly stable to prior year.
Reconciliation between Operating Profit and Adjusted EBITDA:
Financial
(EURm) H1 17 H1 16 Year 2016
------------------------------------- -------- ------ -----------
Operating profit/(loss) 5.2 (5.5) 0.2
------------------------------------- -------- ------ -----------
Depreciation 0.5 0.5 0.9
------------------------------------- -------- ------ -----------
Amortisation of development
costs 1.6 1.6 3.2
------------------------------------- -------- ------ -----------
Amortisation of acquired intangible
assets 5.2 4.9 10.6
------------------------------------- -------- ------ -----------
Impairment charges - 8.2 8.2
------------------------------------- -------- ------ -----------
Exceptional items - 0.3 0.4
------------------------------------- -------- ------ -----------
Share option charge 0.4 0.1 0.4
------------------------------------- -------- ------ -----------
Adjusted EBITDA 12.9 10.1 23.9
------------------------------------- -------- ------ -----------
Exceptional items for the six months to 30 June 2017 were EURnil
(2016: EUR0.3m). The share option charge for the period reflects
the share based payment charge arising on the issuance of options
in April 2016 and March 2017 in accordance with the Group's Long
Term Incentive Plan (LTIP). The total options in issue at 30 June
2017 are 1,756,747 nil cost options. The impairment charge in 2016
of EUR8.2m was a result of a review of trading performance of the
Hostelbookers brand. At 30 June 2017, there are no indications that
the Hostelbookers intellectual property assets are carried at an
amount higher than their recoverable amount.
Adjusted Profit after Taxation
Financial
EURm H1 17 H1 16 Year 2016
-------------------------------------- -------- ------ -----------
Adjusted EBITDA 12.9 10.1 23.9
-------------------------------------- -------- ------ -----------
Depreciation (0.5) (0.5) (0.9)
-------------------------------------- -------- ------ -----------
Amortisation of development
costs (1.6) (1.6) (3.2)
-------------------------------------- -------- ------ -----------
Corporation tax (0.5) (0.3) (0.5)
-------------------------------------- -------- ------ -----------
Adjusted Profit after Taxation 10.3 7.7 19.4
-------------------------------------- -------- ------ -----------
Exceptional costs (0.0) (0.3) (0.4)
-------------------------------------- -------- ------ -----------
Amortisation of acquired intangibles (5.2) (4.9) (10.6)
-------------------------------------- -------- ------ -----------
Net financial costs - - (0.1)
-------------------------------------- -------- ------ -----------
Share option charge (0.4) (0.1) (0.4)
-------------------------------------- -------- ------ -----------
Impairment charges - (8.2) (8.2)
-------------------------------------- -------- ------ -----------
Deferred taxation (0.3) 1.1 1.1
-------------------------------------- -------- ------ -----------
Profit/(loss) for the period 4.4 (4.7) 0.8
-------------------------------------- -------- ------ -----------
Adjusted Profit after Taxation is a non-GAAP metric that the
Group uses to calculate the dividend payout for the year, subject
to Company Law requirements regarding distributable profits. It
excludes exceptional costs, amortisation of acquired domain and
technology intangibles, impairment charges, net finance costs,
share option charge and deferred taxation which can have large
impacts on the reported result for the year, and which can make
underlying trends difficult to interpret.
Adjusted Profit after Taxation increased from EUR7.7m to
EUR10.3m due to the strong trading performance in the period, and
the weaker comparative in the six months ended 30 June 2016.
The Group's corporation tax charge of EUR0.5m is an effective
tax rate (corporation tax as a percentage of Adjusted EBITDA) of
4.0%. The corresponding charge in the six months ended 30 June 2016
was 3.4%.
The Groups' deferred tax charge for the six months ended 30 June
2017 of EUR0.3m (30 June 2016: credit of EUR1.1m) relates to the
amortisation of deferred tax assets reduced by the amortisation of
deferred tax liabilities. The credit of EUR1.1m in the six month
period ended 30 June 2016 mainly relates to the reduction in
carrying value of the deferred tax liability arising from the
impairment of the Hostelbookers intellectual property assets.
Based on the weighted average shares in issue during the six
months ended 30 June 2017, Earnings per Share ("EPS") as set out in
note 6 to the condensed financial statements is 4.60 cents per
share (30 June 2016: loss of 4.93 cents per share). Using Adjusted
Profit after Taxation as the measure of earnings would result in an
adjusted EPS of 11 cents per share (30 June 2016: 8 cents per
share).
Foreign exchange risk
The Group's primary operating currency is the euro. The Group
also has significant sterling and US dollar cash flows. Restated on
a constant currency basis, revenues have increased by 17% (EUR6.9m)
and Adjusted EBITDA has increased by 30% (EUR3.0m) for the six
months ended 30 June 2017. Constant currency is calculated by
applying the average exchange rates for the six months period ended
30 June 2017 to the financial results for the six months period
ended 30 June 2016 on a month by month basis. The Group's principal
policy is to match cash flows of like currencies, with excess
sterling and US dollar revenues being settled into euros on a
timely basis.
Dividend
The Group is committed to an attractive dividend policy, and is
pleased to declare an interim dividend of EUR4.9m or 5.1 cent per
share (2016: 4.8 cent per share) which is in line with the Group's
stated dividend policy. This dividend has not been included as a
liability in these condensed financial statements. The interim
dividend is payable on 22 September 2017 to all shareholders on the
Register of Members on 1 September 2017.
In June 2017, the Group paid a final dividend of EUR9.9m or
EUR0.104 per share in respect of the financial year ending 31
December 2016. Additionally the Group paid a discretionary,
non-recurring supplementary dividend of EUR10.0m or EUR0.105 per
share. After payment of the recommended interim dividend for 2017,
the Group will have returned EUR32.1m to shareholders in dividends
in the two years since the initial listing in November 2015.
Adjusted Free Cashflow conversion
EURm H1 17 H1 16 2016
--------------------------------------------- --------- ------- -------
Adjusted EBITDA 12.9 10.1 23.9
--------------------------------------------- --------- ------- -------
Capitalised development spend (0.4) (1.2) (2.4)
--------------------------------------------- --------- ------- -------
Capital expenditure (0.8) (0.6) (0.7)
--------------------------------------------- --------- ------- -------
Interest and tax paid (0.3) (0.1) (0.3)
--------------------------------------------- --------- ------- -------
Net movement in working capital (1) 1.6 2.6 1.0
--------------------------------------------- --------- ------- -------
Adjusted Free Cashflow 13.0 10.8 21.5
--------------------------------------------- --------- ------- -------
Adjusted FCF conversion 101% 107% 90%
--------------------------------------------- --------- ------- -------
(1) changes in working capital excludes the effects of exceptional
costs
The Group has a business model which produces strong free cash
flow conversion, with a negative working capital cycle on
operational cash flows. The movement in working capital in the
first six months of 2017 was at a lower level than in the same
period in 2016, which resulted in a lower adjusted free cash flow
conversion of 101% (30 June 2016: 107%). The lower level of
capitalised development expenditure increased the free cash flow
conversion percentage above that achieved in full year 2016.
Total Cash at 30 June 2017 was EUR17.7m (30 June 2016:
EUR18.7m), of which EURnil is restricted (30 June 2016: EUR2.2m
held in a restricted account as part of a guarantee related to the
lease of the Dublin office).
There were no borrowings at 30 June 2017 (30 June 2016:
EURnil).
Related party transactions
Related party transactions are disclosed in note 15 to the
condensed financial statements. There have been no changes in the
related party transactions described in the last annual report
which would have had a material effect on the financial position or
performance of the Group.
Risks and uncertainties
The principal risks and uncertainties facing the Group remain
those disclosed in the annual report for the year ended 31 December
2016. While the nature of the principal risks and uncertainties
faced by the Group remain unchanged on the whole, external
geopolitical factors have changed the Group's risk profile in
certain areas. Amongst the most significant of these factors are,
the increased incidence of terrorism and the proposed exit of the
United Kingdom from membership of the European Union (known as
"Brexit"). In the six months ended 30 June 2017, the UK as a
destination represented 7% of total group bookings and 14% of group
bookings were from UK nationals.
The Group will continue to manage the risks to the business
posed by the impact of terrorist attacks on travel demand and by
macro-economic uncertainties and currency fluctuations,
particularly in USD and GBP, surrounding geopolitical events.
A detailed explanation of the risks and how the Group seeks to
mitigate the risks, can be found on pages 32 to 37 of the annual
report which is available at www.hostelworldgroup.com.
Going concern
As stated in note 2 to the condensed financial statements, the
directors are satisfied that the Group has sufficient resources to
continue in operation for the foreseeable future, a period of not
less than 12 months from the date of this report. Accordingly, they
continue to adopt the going concern basis in preparing the
condensed financial statements.
Board Update
Richard Segal has informed the Board of his intention to resign
as Non-Executive Chairman, a position he has held for 6 years.
Richard has led the Group through a period of strong change and
growth, as both a private and listed business, and the Board
expresses its deep gratitude for his guidance and contribution
during that time. Richard will be succeeded by Michael Cawley,
currently Senior Independent Non-Executive Director, during 2017 at
a date yet to be confirmed.
We have also announced today the appointment, effective 1
October 2017, of Carl Shepherd as a Non-Executive Director. Carl, a
co-founder of Homeaway Inc., brings an immense wealth of listed
company experience in the on-line travel industry, including in
North America and Asia, and his skills and knowledge will be of
great benefit as we continue to take the Group forward in our
international markets.
The search is underway for a further Non-Executive Director to
complement the skills and experience of the Board.
Future outlook
The Group has returned to growth, reflecting the strength of the
core Hostelworld brand, which now represents 92% of total Group
bookings and the success of our continuing product, marketing and
operational initiatives. The strong trading seen in the second half
of 2016 continued throughout the early months of 2017, with growth
in bookings across all geographies.
The level of growth in H1 2017 was somewhat flattered by a weak
comparative in H1 2016, growth rates in the June to August period
have been more modest. Our expectations for the full year outcome
are nonetheless unchanged, and we have declared a 6% increase in
the interim dividend.
Future outlook (continued)
We remain confident in our long term strategy and execution and
will continue to manage the risks to our business posed by the
impact of terrorist attacks on travel demand alongside the general
macro-economic uncertainties and currency fluctuations.
By order of the board
__________________ ______________
Feargal Mooney Mari Hurley
Chief Executive Officer Chief Financial Officer
Date: Date:
HOSTELWORLD GROUP PLC
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHSED 30 JUNE 2017
Six months Six months Year
ended ended ended 31
30 June 30 June December
2017 2016 2016
EUR'000 EUR'000 EUR'000
Notes (Unaudited) (Unaudited) (Audited)
Revenue 3 46,649 40,168 80,514
Administrative expenses 4 (34,183) (30,437) (57,397)
Depreciation and amortisation
expenses 4 (7,250) (7,000) (14,731)
Impairment losses 4 - (8,199) (8,199)
Operating profit/(loss) 5,216 (5,468) 187
Financial income 4 2 5
Financial costs (43) (36) (59)
Profit/(loss) before taxation 5,177 (5,502) 133
Taxation (charge)/credit 5 (784) 795 651
Profit/(loss) for the
period attributable to
the equity owners of the
parent company 4,393 (4,707) 784
------------ ------------------- ----------
Earnings per share:
Basic earnings/(loss)
per share (cents) 6 4.60 (4.93) 0.82
------------ ------------------- ----------
Diluted earnings/(loss)
per share (cents) 6 4.58 (4.93) 0.82
------------ ------------------- ----------
HOSTELWORLD GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2017
Six months Six months Year ended
ended 30 June ended 30 31 December
2017 June 2016 2016
EUR'000 EUR'000 EUR'000
(Unaudited) (Unaudited) (Audited)
Profit/(loss) for the period 4,393 (4,707) 784
Items that may be reclassified subsequently
to
profit or loss:
Exchange differences on translation of
foreign operations 3 (562) (680)
-------------- ----------- ------------
Total comprehensive income/(expense)
for the period attributable to equity
owners of the parent company 4,396 (5,269) 104
-------------- ----------- ------------
HOSTELWORLD GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
30 June 30 June 31 December
2017 2016 2016
EUR'000 EUR'000 EUR'000
Notes (Unaudited) (Unaudited) (Audited)
Non-current assets
Intangible assets 7 133,257 145,463 139,619
Property, plant and equipment 8 3,344 3,552 3,058
Deferred tax assets 217 919 659
136,818 149,934 143,336
Current assets
Trade and other receivables 9 3,970 3,215 2,627
Cash and cash equivalents 10 17,662 18,652 24,632
21,632 21,867 27,259
----------- ----------- -----------
Total assets 158,450 171,801 170,595
----------- ----------- -----------
Issued capital and reserves attributable
to equity owners of the parent
Share capital 11 956 956 956
Other reserves 3,628 3,628 3,628
Foreign currency translation
reserve 18 133 15
Share based payment reserve 735 117 351
Retained earnings 139,405 154,083 154,986
Total equity attributable to
equity holders of the parent
company 144,742 158,917 159,936
----------- ----------- -----------
Non-current liabilities
Deferred tax liabilities 592 1,003 764
592 1,003 764
Current liabilities
Trade and other payables 12 12,651 11,547 9,669
Corporation tax 465 334 226
13,116 11,881 9,895
----------- ----------- -----------
Total liabilities 13,708 12,884 10,659
----------- ----------- -----------
Total equity and liabilities 158,450 171,801 170,595
----------- ----------- -----------
HOSTELWORLD GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2017
Share Retained Other Foreign Share Total
capital earnings reserves currency Based
translation Payment
reserve Reserve
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
As at 1 January 2016 956 161,418 3,628 695 - 166,697
-------- --------- --------- ------------ -------- --------
Dividends - (2,628) - - - (2,628)
Credit to equity for equity
settled share based payments - - - - 117 117
Total comprehensive (expense)
for the period - (4,707) - (562) - (5,269)
As at 30 June 2016 (unaudited) 956 154,083 3,628 133 117 158,917
-------- --------- --------- ------------ -------- --------
Dividends - (4,588) - - - (4,588)
Credit to equity for equity
settled share based payments - - - - 234 234
Total comprehensive income/
(expense) for the period - 5,491 - (118) - 5,373
As at 31 December 2016 (audited) 956 154,986 3,628 15 351 159,936
-------- --------- --------- ------------ -------- --------
Dividends - (19,974) - - - (19,974)
Credit to equity for equity
settled share based payments - - - - 384 384
Total comprehensive income
for the period - 4,393 - 3 - 4,396
As at 30 June 2017 (unaudited) 956 139,405 3,628 18 735 144,742
-------- --------- --------- ------------ -------- --------
HOSTELWORLD GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2017
Six months Six months Year ended
ended ended 31 December
30 June 2017 30 June 2016 2016
EUR'000 EUR'000 EUR'000
(Unaudited) (Unaudited) (Audited)
Cash flows from operating activities
Profit/(loss) before tax 5,177 (5,502) 133
Depreciation of property, plant
and equipment 483 480 886
Amortisation of intangible assets 6,767 6,520 13,845
Impairment of intangible assets - 8,199 8,199
Loss on disposal of property,
plant and equipment - - 19
Financial income (4) (2) (5)
Financial expense 43 36 59
Employee equity settled share
based payment expense 398 121 362
Changes in working capital items:
Increase/(decrease) in trade and
other payables 2,969 292 (1,553)
(Increase) in trade and other
receivables (1,343) (472) (24)
------------- ------------- ------------
Cash generated from operations 14,490 9,672 21,921
Interest paid (43) (36) (59)
Interest received 4 2 5
Income tax (paid) (275) (49) (280)
------------- ------------- ------------
Net cash from operating activities 14,176 9,589 21,587
------------- ------------- ------------
Cash flows from investing activities
Acquisition/capitalisation of
intangible assets (405) (1,210) (2,500)
Purchases of property, plant and
equipment (770) (600) (746)
Net cash used in investing activities (1,175) (1,810) (3,246)
------------- ------------- ------------
Cash flows from financing activities
Dividends (19,974) (2,628) (7,216)
------------- ------------- ------------
Net cash used in financing activities (19,974) (2,628) (7,216)
------------- ------------- ------------
Net (decrease)/increase in cash
and cash equivalents (6,973) 5,151 11,125
Cash and cash equivalents at the
beginning of the period 24,632 13,620 13,620
Effect of exchange rate changes
on cash and cash equivalents 3 (119) (113)
------------- ------------- ------------
Cash and cash equivalents at the
end of the period 17,662 18,652 24,632
Restricted cash balances - (2,225) -
------------- ------------- ------------
Unrestricted cash balances at
the end of the period 17,662 16,427 24,632
------------- ------------- ------------
HOSTELWORLD GROUP PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2017
1. GENERAL INFORMATION
Hostelworld Group plc, hereinafter "the Company", is a public
limited company incorporated in the United Kingdom on the 9 October
2015. The condensed consolidated interim financial statements of
the Company for the six months ended 30 June 2017 comprise the
Company and its subsidiaries (together referred to as "the Group").
The condensed consolidated interim financial statements for the
period ended 30 June 2017 are unaudited.
The information for the year ended 31 December 2016 does not
constitute statutory accounts as defined in section 434 of the
Companies Act 2006. A copy of the statutory accounts for that year
has been delivered to the Registrar of Companies. The auditors
reported on those accounts and their report was unqualified, did
not draw attention to any matters by way of emphasis and did not
contain a statement under section 498(2) or (3) of the Companies
Act 2006.
These interim financial statements were authorised for issue by
the Board of Directors of Hostelworld Group plc on 21 August
2017.
2. ACCOUNTING POLICIES
Basis of preparation
The annual financial statements of the Group are prepared in
accordance with IFRSs as adopted by the European Union. The
condensed set of consolidated financial statements included in this
half-yearly financial report has been prepared in accordance with
International Accounting Standard 34 'Interim Financial Reporting',
as adopted by the European Union.
Going concern
The directors are satisfied that the Group has sufficient
resources to continue in operation for the foreseeable future, a
period of not less than 12 months from the date of this report.
Accordingly, they continue to adopt the going concern basis in
preparing the condensed consolidated financial statements.
Accounting policies
The accounting policies applied by the Group in the consolidated
interim financial statements are the same as those applied by the
Group in its consolidated financial statements as at and for the
year ended 31 December 2016.
There are no new or amended IFRSs or IFRIC interpretations that
are effective for the first time for the financial year beginning
on 1 January 2017 that had a material impact on the Group.
The Group is currently assessing the impact of other standards
and interpretations that are effective for the first time for the
financial year beginning on 1 January 2018. It is not expected that
IFRS 9 - Financial Instruments will have a material impact on the
measurement of financial instruments. Based on the Group's existing
business model, the Directors do not anticipate that the
implementation of IFRS 15 - Revenue from Contracts with Customers
will have a material impact on how revenue is recognised.
Accounting estimates and judgements
In preparing these interim consolidated financial statements,
the directors have made judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
The significant judgements made by the directors in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the consolidated
financial statements as at and for the year ended 31 December
2016.
3. REVENUE & SEGMENTAL ANALYSIS
The Group is managed as a single business unit which provides
software and data processing services that facilitate hostel, hotel
and other accommodation bookings worldwide, including ancillary
on-line advertising revenue.
The directors determine and present operating segments based on
the information that is provided internally to the CEO, who is the
Company's Chief Operating Decision Maker (CODM). When making
resource allocation decisions, the CODM evaluates booking numbers
and average booking value. The objective in making resource
allocation decisions is to maximise consolidated financial
results.
All segmental revenue is derived wholly from external customers
and, as the Group has a single reportable segment, inter-segment
revenue is zero. There have been no changes to the basis of
segmentation or the measurement basis for the segment profit or
loss.
Reportable segment information is presented as follows:
Six months Six months Year
ended ended ended 31
30 June 2017 30 June 2016 December 2016
EUR'000 EUR'000 EUR'000
(Unaudited) (Unaudited) (Audited)
Europe 28,606 25,409 49,497
Americas 8,503 7,218 14,938
Asia, Africa and Oceania 9,540 7,541 16,079
Total revenue 46,649 40,168 80,514
-------------- -------------- ---------------
4. OPERATING EXPENSES
Profit/(loss) for the period has been arrived at after charging
the following operating costs:
Six months Six months Year
ended ended ended 31 December
30 June 2017 30 June 2016 2016
EUR'000 EUR'000 EUR'000
(Unaudited) (Unaudited) (Audited)
Marketing expenses 19,353 17,211 32,842
Credit card processing fees 1,105 1,055 1,931
Staff costs 9,484 7,502 14,359
Loss on disposal of property,
plant and equipment - - 19
FX(gain)/loss (74) (262) (214)
Exceptional Items - 271 449
Other administrative costs 4,315 4,660 8,011
Total administrative expenses 34,183 30,437 57,397
Depreciation of tangible
fixed assets 483 480 886
Amortisation of intangible
fixed assets 6,767 6,520 13,845
Impairment of intangible
assets - 8,199 8,199
Total operating expenses 41,433 45,636 80,327
------------- ------------- ------------------
5. TAXATION
The corporation tax charge for the six month period is EUR514k
(30 June 2016: EUR347k), representing the best estimate of the
average annual effective tax rate expected for the full year,
applied to the pre-tax income of the six month period.
The deferred tax charge for the six month period of EUR270k (30
June 2016: credit of EUR1,142k) relates to the amortisation of
deferred tax assets offset by the reduction in deferred tax
liabilities.
The credit of EUR1,142k in the six month period 30 June 2016
relates to the reduction in carrying value of the deferred tax
liability arising from the impairment charge (Note 7), offset by
the amortisation of deferred tax assets.
6. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is
based on the following:
Six months Six months Year ended
ended ended 31 December
30 June 2017 30 June 2016 2016
(Unaudited) (Unaudited) (Audited)
Earnings:
Earnings for the purposes of basic
earnings
per share (EUR'000s) 4,393 (4,707) 784
------------- ------------- ------------
Earnings for the purposes of diluted
earnings
per share (EUR'000s) 4,393 (4,707) 784
------------- ------------- ------------
Six months Six months Year ended
ended ended 31 December
30 June 2017 30 June 2016 2016
(Unaudited) (Unaudited) (Audited)
Number of Shares:
Weighted average number of ordinary
shares for
the purposes of basic earnings per
share ('000s) 95,571 95,571 95,571
Effect of dilutive potential ordinary
shares:
Share options ('000s) 400 - -
------------- ------------- ------------
Weighted average number of ordinary
shares for
the purposes of diluted earnings
per share ('000s) 95,971 95,571 95,571
------------- ------------- ------------
Earnings per Share:
Basic earnings/(loss) per share
(cents) 4.60 (4.93) 0.82
------------- ------------- ------------
Diluted earnings/(loss) per share
(cents) 4.58 (4.93) 0.82
------------- ------------- ------------
7. INTANGIBLE ASSETS
The table below shows the movements in intangible assets for the
period:
Capitalised
Domain Affiliates Development
Goodwill Names Technology Contracts Costs Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Cost
Balance at 1 January
2016 47,274 214,640 13,325 5,500 5,735 286,474
Additions - - - - 1,211 1,211
Effect of foreign
currency exchange
difference - - - - (1) (1)
----------- ---------- ----------- ----------- ------------- ----------
Balance at 30 June
2016 47,274 214,640 13,325 5,500 6,945 287,684
----------- ---------- ----------- ----------- ------------- ----------
Additions - - 118 - 1,174 1,292
Transfer from tangible
assets - - 383 - - 383
Effect of foreign
currency exchange
difference - - (12) - 1 (11)
----------- ---------- ----------- ----------- ------------- ----------
Balance at 31 December
2016 47,274 214,640 13,814 5,500 8,120 289,348
----------- ---------- ----------- ----------- ------------- ----------
Additions - - 42 - 363 405
Effect of foreign
currency exchange
difference - - - - - -
----------- ---------- ----------- ----------- ------------- ----------
Balance at 30 June
2017 47,274 214,640 13,856 5,500 8,483 289,753
----------- ---------- ----------- ----------- ------------- ----------
Accumulated amortisation
and impairment
Balance at 1 January
2016 (29,426) (77,789) (12,936) (5,500) (1,851) (127,502)
Charge for the period - (4,844) (117) - (1,559) (6,520)
Impairment - (8,199) - - - (8,199)
----------- ---------- ----------- ----------- ------------- ----------
Balance at 30 June
2016 (29,426) (90,832) (13,053) (5,500) (3,410) (142,221)
----------- ---------- ----------- ----------- ------------- ----------
Charge for the period - (5,472) (209) - (1,644) (7,325)
Transfer from tangible
assets - - (187) - - (187)
Effect of foreign
currency exchange
difference - - 4 - - 4
----------- ---------- ----------- ----------- ------------- ----------
Balance at 31 December
2016 (29,426) (96,304) (13,445) (5,500) (5,054) (149,729)
----------- ---------- ----------- ----------- ------------- ----------
Charge for the period - (5,074) (165) - (1,528) (6,767)
Effect of foreign
currency exchange
difference - - - - - -
----------- ---------- ----------- ----------- ------------- ----------
Balance at 30 June
2017 (29,426) (101,378) (13,610) (5,500) (6,582) (156,496)
----------- ---------- ----------- ----------- ------------- ----------
Net book value
At 30 June 2016 17,848 123,808 272 - 3,535 145,463
----------- ---------- ----------- ----------- ------------- ----------
At 31 December 2016 17,848 118,336 369 - 3,066 139,619
----------- ---------- ----------- ----------- ------------- ----------
At 30 June 2017 17,848 113,262 246 - 1,901 133,257
----------- ---------- ----------- ----------- ------------- ----------
In 2016, following a review of trading performance the directors
reassessed the estimated future cashflows associated with the
Hostelbookers intellectual property assets. This led to the
recognition of an impairment charge of EUR8,199k in relation to the
value of the Hostelbookers domain names. The estimated useful life
of these domain names was also reduced from the reporting date of
30 June 2016.
At 30 June 2017, there are no indications that the Hostelbookers
intellectual property assets are carried at an amount higher than
their recoverable amount.
8. PROPERTY, PLANT AND EQUIPMENT
During the six months ended 30 June 2017, the Group invested
EUR770k on additional property, plant and equipment (30 June 2016:
EUR600k)
9. TRADE AND OTHER RECEIVABLES
30 June 30 June 31 December
2017 2016 2016
EUR'000 EUR'000 EUR'000
(Unaudited) (Unaudited) (Audited)
Amounts falling due within one
year
Trade receivables 1,216 991 892
Prepayments and accrued income 999 790 731
Value Added Tax 1,755 1,434 1,004
3,970 3,215 2,627
----------- ----------- -----------
10. CASH AND CASH EQUIVALENTS
30 June 30 June 31 December
2017 2016 2016
EUR'000 EUR'000 EUR'000
(Unaudited) (Unaudited) (Audited)
Cash and cash equivalents 17,662 18,652 24,632
Restricted cash balances - (2,225) -
Unrestricted cash balances 17,662 16,427 24,632
------------ ------------ ------------
The Group entered into a guarantee with AIB Bank plc during 2015
related to the lease of office space in Dublin. The guarantee
initially required that EUR2,225k remain on deposit with the bank.
The requirement was removed by AIB Bank plc during 2016.
11. SHARE CAPITAL
Share capital as at 30 June 2017 amounted to EUR955,708 (30 June
2016: EUR955,708). There were no additional shares issued during
the six month period ending 30 June 2017.
12. TRADE AND OTHER PAYABLES
30 June 30 June 31 December
2017 2016 2016
EUR'000 EUR'000 EUR'000
(Unaudited) (Unaudited) (Audited)
Amounts falling due within one
year
Trade payables 4,183 3,674 3,344
Accruals and other payables 7,935 7,115 5,797
Payroll taxes 529 674 524
Value Added Tax 4 84 4
12,651 11,547 9,669
------------ ------------ ------------
13. DIVIDS
Amounts recognised as distributions to equity holders in the
financial year:
Six months Six months Year ended
ended 30 ended 30 31 December
June 2017 June 2016 2016
EUR'000 EUR'000 EUR'000
Final 2015 dividend of EUR0.0275
per share (paid 31 May 2016) - 2,628 2,628
Interim 2016 dividend of EUR0.048
per share (paid 27 September
2016) - - 4,588
Final dividend for the year
ended 31 December 2016 of
EUR0.104 per share (paid 6
June 2017) 9,939 - -
Supplementary dividend of
EUR0.105 per share (paid 6
June 2017) 10,035 - -
19,974 2,628 7,216
----------- ----------- -------------
Interim dividend for the year ended
31 December 2017 of EUR0.051 per share
(2016: EUR0.048 per share) 4,874 4,588 -
----------- ----------- -------------
The directors declare an interim dividend of 5.1 cents per share
amounting to EUR4.9m (30 June 2016: EUR4.6m) be paid to
shareholders on 22 September 2017. This dividend has not been
included as a liability in these condensed consolidated interim
financial statements. The interim dividend is payable to all
shareholders on the Register of Members on 1 September 2017.
14. SHARE BASED PAYMENTS
On 29 March 2017, 847,663 nil cost share options were granted to
employees as part of a long term incentive plan. These share
options will vest on 28 March 2020, subject to meeting performance
conditions.
On 5 April 2016, 928,464 nil cost share options were granted to
employees as part of a long term incentive plan. During the six
months to 30 June 2017, 19,380 of these share options have been
forfeited leaving 909,084 still in issue at 30 June 2017. These
share options will vest on 4 April 2019, subject to meeting
performance conditions.
15. RELATED PARTY TRANSACTIONS
During the six months ended 30 June 2017, the Group had no
transactions with any related parties, and as at the reporting
date, the Group had no amounts owing to any related party.
During the six months ended 30 June 2016, the former controlling
shareholder of the Group, H&F Wings Lux 1 S.Ã r.l. ("Lux 1")
paid a discretionary bonus payment of EUR1,559k (EUR1,400k net of
employer taxes) to certain senior management and employees of the
Group in relation to their performance up to the date of Admission.
The Group did not bear any costs associated with this payment. Mr.
Feargal Mooney, executive director and CEO, received an award of
EUR850k.
16. EVENTS AFTER THE REPORTING DATE
On 5 July 2017 181,208 options were granted to a number of
eligible employees in the Group as part of a Save as You Earn
scheme. These options will vest in August 2020 subject to a number
of conditions.
An interim dividend of 5.1 cents per share amounting to EUR4.9m
(30 June 2016: EUR4.6m) is referred to in note 13 above.
There were no other material subsequent events since the
reporting date.
HOSTELWORLD GROUP PLC
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
(a) the condensed set of consolidated financial statements has
been prepared in accordance with IAS 34 'Interim Financial
Reporting';
(b) The interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year); and
(c) The interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
By order of the board
__________________ ______________
Feargal Mooney Mari Hurley
Chief Executive Officer Chief Financial Officer
Date: Date:
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DFLFLDVFLBBZ
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August 22, 2017 02:00 ET (06:00 GMT)
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