TIDMHSW
RNS Number : 7806T
Hostelworld Group PLC
22 March 2023
HOSTELWORLD GROUP PLC
PRELIMINARY RESULTS FOR FOR THE YEARED 31 DECEMBER 2022
LEI:213800OC94PF2D675H41
Hostelworld Group plc ("Hostelworld" or the "Group" or the
"Company") preliminary results for the year ended 31 December
2022
Return to profitable growth in line with guidance
22 March 2023: Hostelworld, a leading global OTA focused on the
hostel market, is pleased to announce its preliminary results for
the year ended 31 December 2022.
Significant developments
-- Returned the business to profitable adjusted EBITDA
-- Strong recovery in demand as Omicron impact receded and travel resumed
-- Successful launch of our innovative and differentiated
'Social' strategy supporting increase in bookings through Apps and
reduced marketing cost
-- Operating costs below FY 2019 levels facilitated by platform modernisation
-- Continued progress of ESG agenda; accredited Carbon Neutral
label and independent research validating "hostels as a more
sustainable travel option to hotels"
-- Strong start to 2023 with positive trends continuing
Financial highlights
-- Full year net bookings totalled 4.8m, an increase of 228%
year on year (2021: 1.5m), driven by recovery in Europe, and in
particular, Asia and Oceania in H2 2022
-- Net GMV EUR470.1m, an increase of 303% year on year (2021: EUR116.7m)
-- Net Revenue for the period of EUR69.7m, an increase of 312% year on year (2021: EUR16.9m)
-- Net Average Booking Value ("ABV") of EUR14.90, a 23% increase
year on year (2021: EUR12.11), due primarily to bed price
inflation
-- Direct marketing as a percentage of net revenue amounted to
59% (2021: 76%), reducing from 70% in H1 2022 to 52% in H2 2022,
supported by the launch of our app centric 'Social' strategy
-- Operating costs (excluding paid marketing, exceptional items
and share option charges) are below 2019 levels (-13.4%)
-- Adjusted EBITDA profit of EUR1.3m (2021: loss of EUR17.3m)
-- Operating loss EUR13.6m (2021: EUR33.1m)
Balance sheet and cash flow
-- Total cash as at 31 December 2022 of EUR19.0m (2021: EUR25.3m)
-- Refinance process underway for EUR30m term loan facility,
expected to complete in 2023, which will result in lower finance
costs
Gary Morrison, Chief Executive Officer, commented:
"2022 was the year in which Hostelworld demonstrated the
resilience of its business model and the capacity to capitalise on
market demand as it returned. Most significantly, through a
combination of operational progress, disciplined cost control and
the launch of our innovative 'Social' strategy, we returned the
business to profitable growth.
After a slow start to the year driven by Omicron, booking demand
recovered quickly towards 2019 levels into Europe (our largest
destination); with many of our top markets in Southern Europe
exceeding 2019 levels over the summer. Easing of travel
restrictions enabled Oceania and Asia to show strong recovery
through the year, improving from approximately 6% of 2019 levels
before reaching 79% of 2019 levels in December. Central America
continued to perform strongly throughout the year, at approximately
150% of 2019 levels. Similarly, we also saw the resumption of long
haul travel throughout the year, which is especially significant
given that it is a lead indicator of customers booking multi
destination trips. More specifically, long haul bookings recovered
from 27% of 2019 levels to 76% by year end, and in particular,
booking demand from North America into Europe remained above 2019
levels for much of the post Omicron period in the year.
In addition, I am pleased to report on the successful launch of
our differentiated social network growth strategy in 2022 which
capitalises on the unique needs and attributes of the hostelling
category. Since launching these social features on our Apps in Q2,
we have seen strong growth in the number of bookings being made by
social members (customers who have opted into the social Network)
with 50% of our bookings being made by social members at year end,
and a significant increase in the volume of bookings through our
Apps. This, along with strong net booking and average booking value
(ABV) growth, has translated into increased revenues, lower
marketing costs and improved margins.
Overall, I am encouraged by the trends we have seen since the
start of the year despite limited visibility of our key bookings
period , and I believe we are well positioned and firmly on track
to meet the growth targets outlined in our Capital Markets Day
presentation in November."
Trading Update
Throughout 2022, we have seen strong month on month growth in
new customers, net bookings and net revenue as the impact of the
Omicron outbreak subsided. Specifically, we achieved 4.8 million
net bookings in FY 2022, which represents 70% of FY 2019 levels (up
from 21% in FY 2021), and net revenue of EUR69.7m, which represents
86% of FY 2019 levels (up from 21% in FY 2021), driven by higher
average booking values.
As the recovery progressed, we have seen several factors impact
our trading economics versus 2019. In particular, net revenue
growth has outpaced net bookings growth driven by a steady increase
in average net booking values. This has been driven primarily by
bed price inflation (resulting from destination specific recovery
rates versus 2019), which has been partially offset by a reduction
in blended commission rates (due to the removal of Elevate in
2020), and higher cancellation rates (in part driven by a higher
proportion of free cancellation bookings).
Direct marketing costs as a percentage of net revenue were
elevated in the first half of the year versus 2019 by a number of
factors. Our focus on new customer growth, underpinned by our
ability to predict the lifetime value of these new customers versus
their acquisition cost; higher CPCs in paid marketing channels
(driven by higher average booking values); lower conversion rates
in those destinations where some level of restrictions persisted
and finally higher cancellation rates (in part driven by a higher
proportion of free cancellation bookings).
During the second half of the year, direct marketing cost as a
percentage of net revenue reduced at a faster rate (ahead of our
expectations) driven by our App based social strategy. This unique
and highly differentiated strategy reduces direct marketing costs
as a percentage of net revenue by driving new and existing
customers to use our iOS and Android Apps, thereby increasing the
proportion of bookings through lower cost channels. As a
consequence, we now expect direct marketing as a percentage of
revenue to fall from 59% in 2022 to 50-55% in 2023 as outlined in
our Capital Markets Day presentation in November.
The improvement in direct margins coupled with tight cost
control has also driven a significant improvement in operating cash
performance. As at 31 December 2022, cash totalled EUR19.0m, down
EUR6.3m as compared to cash as at 31 December 2021. We will
continue to maintain our cost discipline on an on-going basis and
will look to refinance our current debt facility in 2023.
On the supply side our market position remains strong, with the
hostels connected to our platform accounting for approximately 77%
of the bed nights sold in December 2022, compared to 77% in 2019.
This has been driven by continuous additions to our platform,
offsetting losses from the category driven mainly by hostel
closures due to COVID-19. For clarity, our market coverage metric
does not include hostels removed temporarily from our platform in
Belarus and Russia, due to the ongoing conflict in the region.
Outlook
The medium-term financial targets released to the market at our
Capital Markets Day last November demonstrate the Board's
confidence in our growth strategy and business model to deliver
profitable growth over the next three years. In 2023 we will
continue to develop and progress the opportunities enabled by our
social network strategy, while remaining committed to delivering
high levels of operating performance and cost discipline.
Hostelworld operates in a resilient and growing category with a
loyal customer base that has a strong desire to travel and meet
other people despite the uncertainties the economic cycle may
present. We are encouraged by the trends we have seen since the
start of the year and believe that the business is firmly on track
to deliver the targets for FY 2023 presented at our Capital Markets
Day in November 2022.
Analyst Presentation
A presentation will be made to analysts today at 2.00pm, a copy
of which will be available on our Group website:
http://www.hostelworldgroup.com. If you would like to dial into the
presentation, please contact Powerscourt on the contact details
provided below.
Webcast Link:
https://brrmedia.news/Hostelworld_fy_results
For further information please contact:
Hostelworld Group plc Corporate@hostelworld.com
Gary Morrison, Chief Executive Officer
Caroline Sherry, Chief Financial Officer
David Brady, Head of Commercial Finance
Powerscourt hostelworld@powerscourt-group.com
Eavan Gannon / Nick Dibden +44 (0) 20 7250 1446
About Hostelworld
Hostelworld Group Plc is a ground-breaking social network
powered Online Travel Agent (OTA) focused on the hostelling
category, with a clear mission to help travellers find people to
hang out with. Our mission statement is founded on the insight that
the vast majority of travellers go hostelling as a means to meet
other people, which we facilitate through a series of social
features on our platform that connect our travellers in hostels and
cities based on their booking data. To date the strategy has been
extraordinarily successful, generating significant word of mouth
recommendations from our customers and strong endorsements from our
Hostel partners.
Founded in 1999, Hostelworld is a well-known trusted brand with
almost 250 employees across 11 countries; hostel partners in over
180 countries; and a strong commitment to building a better world
in all that we do. In particular, our focus in the last few years
has been on improving the sustainability of the hostelling
industry, through our membership of the Global Sustainable Tourism
Council (GSTC); our active involvement in the Global Tourism
Plastics Initiative (GTPI); our partnerships with Bureau Veritas to
establish emissions benchmarks for the hostelling industry; and our
recent partnership with South Pole to be a Climate Neutral Group in
2021 and 2022.
Disclaimer
This announcement contains forward-looking statements. These
statements relate to the future prospects, developments and
business strategies of Hostelworld. Forward-looking statements are
identified by the use of such terms as "believe", "could",
"envisage", "estimate", "potential", "intend", "may", "plan",
"will" or variations or similar expressions, or the negative
thereof. Any forward-looking statements contained in this
announcement are based on current expectations and are subject to
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by those statements. If
one or more of these risks or uncertainties materialize, or if
underlying assumptions prove incorrect, Hostelworld's actual
results may vary materially from those expected, estimated or
projected. Any forward-looking statements speak only as at the date
of this announcement. Except as required by law, Hostelworld
undertakes no obligation to publicly release any update or
revisions to any forward-looking statements contained in this
announcement to reflect any change in events, conditions or
circumstances on which any such statements are based after the time
they are made.
Chairman's Statement: Michael Cawley
Despite the challenges which Omicron and travel restrictions
presented, 2022 has been a year of recovery and growth for
Hostelworld. It was a notable year for the business, marked by a
renewal of booking demand, revenue growth and the delivery of a
positive adjusted EBITDA in line with market guidance. Our
innovative and differentiated 'social' strategy has enabled the
Group to capitalise on the welcome return of travel demand. Since
the launch in April 2022 of the social network features on our iOS
and Android platforms we have seen a significant increase in the
volume of bookings through our Apps. Our mission, to 'enable
travellers find people to hang out with', has resonated strongly
with our customers and our social network features has helped begin
the journey of building a community of like-minded travellers. This
strategy is helping to drive increased revenues, lower direct
marketing costs as a percentage of revenue and will deliver
improved profitability.
Throughout the year we have seen a good recovery and growth in
net bookings and net revenue as the impact of the Omicron variant
receded and governments lifted restrictions on international
travel. Some regions recovered earlier than others. Asia, in
particular was weak but by year end after the easing of
restrictions in China it too was firing on all cylinders. Such was
the strength of demand that activity levels in some countries
exceeded 2019 levels throughout 2022. This has given us confidence
both in the continuing popularity of hostelling and in
Hostelworld's ability to grow its share in the sector.
This revival in demand has been achieved while maintaining
excellent cost discipline. I am pleased to report that operating
costs (excluding paid marketing, exceptional items and share option
charges) are below 2019 levels (-13.4%), reflecting both cost
management measures implemented in recent years to reduce fixed
costs and operational efficiencies facilitated by our platform
modernisation. We believe there is no conflict between our goal to
be the leading OTA for hostellers while being exceptionally
disciplined on cost.
Sustainability
Reflecting our commitment to a sustainable future, and in
keeping with our UK listing and financial disclosure requirements,
the business focussed on its compliance with the requirements of
the Taskforce for Climate related Financial Disclosures ("TCFD").
Complying with the TCFD recommendations, we have disclosed
information across the following key areas: Governance, Strategy,
Risk Management, and Metrics and Targets (further details are
provided within the sustainability section to the annual
report).
I am pleased with the significant progress we have made in
executing our ESG strategy in 2022. The Group welcomed the
publication of a report by leading sustainability and compliance
specialist Bureau Veritas, which confirmed that hostels are
approximately three-quarters less carbon intensive than hotels,
with hostels producing 75% less Scope 1 and Scope 2 carbon
emissions than hotels on a per-bed basis. Given the age profile of
our customer cohort and the importance it justifiably attaches to
sustainability we believe hostelling offers them the most
sustainable option for their accommodation needs. Consequently,
this affords Hostelworld, as the only OTA exclusively promoting
hostels, a unique opportunity to create a distinct competitive
advantage among sustainability conscious travellers.
As part of our commitment to focus hostels on the importance of
sustainability, we partnered with Bureau Veritas to develop a
bespoke sustainability measurement and management system for
hostels. This framework, 'Staircase to Sustainability', is the
first of its kind and is based on the Global Sustainable Travel
Council's (GSTC's) sustainability criteria. This innovative
programme, tailored to the hostelling industry, will enable hostels
to showcase their sustainability credentials, thereby advancing the
category's inherent competitive advantage.
In partnership with emission reduction experts South Pole, the
Group made further progress on executing its ESG strategy by
achieving climate neutral status in respect of 2021 and 2022.
Furthermore, the Group also remains committed to reducing its
own carbon emissions and complies with the requirements of the
Science Based Targets initiative. In 2022 the Group reduced our
absolute Scope 1 and 2 emissions by over 42%, over base year
2021.
Capital structure and dividend
Our principal objective is to deliver growth that drives
long-term sustainable value creation for our shareholders. Overseen
by the Board, the Group continues to work on a number of key
capital allocation priorities to maximise shareholder returns: (1)
re-financing the existing EUR30m term loan drawn down in February
2021 to reduce leverage and interest costs (current outstanding
debt EUR34.3m [1] ); (2) working with the Irish Revenue
Commissioners to agree a schedule of repayments in respect of
EUR9.4m warehoused payroll tax which was extended to companies by
the Irish government as a COVID-19 financial support [2] ; and (3)
continued investment in the business to deliver long term
growth.
The Board continues to believe that the payment of dividends
would not be in the best interests of the business for the
foreseeable future.
Your Board contributing effectively
As Chairman I am pleased to report that your Board continues to
operate effectively in its ongoing assessment of strategy and
business performance, overseeing the culture of Hostelworld and
ensuring meaningful progress continues to be made in the important
area of diversity and inclusion. Long-term succession planning for
senior executive roles and Board members continued to be a core
focus area in 2022. Details of the Board's work in this important
area is set out in the Corporate Governance Statement within the
annual report. The composition of the Board is fully compliant with
the 2018 UK Corporate Governance Code. The Board has undertaken an
appraisal of the Directors, as well as an evaluation of the
performance of the Board and each sub-committee, both of which
concluded that the Board is functioning effectively.
Colleagues, customers and shareholders
I wish to thank my Board colleagues and the management team for
their commitment, energy, and strategic insight in guiding the
business back to profitable growth despite a very challenging
operating environment. I also want to pay tribute to our excellent
staff for the resilience, determination and creativity they have
demonstrated throughout this most difficult time. Together with the
management team, they have re-built the business on very strong
foundations. Despite some macro-economic uncertainties, I am very
confident that 2023 will be another year of strong growth for the
business. Furthermore, I am encouraged by the Group's long-term
opportunities and prospects and believe that Hostelworld is well
positioned to capitalise on strong demand for travel.
Finally, I would like to express my sincere thanks to our
shareholders for your continued support.
Michael Cawley
Chairman
21 March 2023
Chief Executive's Review: Gary Morrison
I am pleased to report we made solid progress on all elements of
our strategy in 2022.
In particular we launched our App centric social strategy in
April 2022, driven by the insight that the vast majority of
travellers in our category choose to go hostelling as a means to
meet other people, which we facilitate through our social features
that connect our travellers in hostels and cities based on their
booking data 14 days before their arrival date. To date, the
strategy has been very successful, generating significant growth in
App bookings, word of mouth recommendations by our customers, and
strong endorsements from our hostel partners.
In parallel, we also continued to invest in our marketing
technology platform, which enables us to allocate marketing spend
to maximise new customer acquisition, underpinned by our ability to
predict the lifetime value of these new customers versus their
acquisition cost in a very granular fashion. We also made solid
progress on modernising our platform to enable us to support faster
execution of our growth strategy. This included migrating our
entire company to the cloud and exiting our on-premise data
centres.
Finally, the Group continues to progress its Environmental,
Social and Governance agenda; and in particular our partnership
with South Pole on climate neutral accreditation and with our
hostel partners to promote the inherent sustainability advantages
of hostel accommodation.
Executing our growth strategy
During 2022 we continued to execute our highly differentiated
growth strategy, which capitalises on the unique needs of the
hostelling category. In particular, our growth strategy seeks to
capitalise on three unique attributes of our customers and their
needs as a category, relative to the mainstream leisure travel
category.
-- Helping our customers find people to hang out with while travelling
One of the key differentiating features of our category is that
the vast majority of our customers, 60% of which are travelling
solo, choose to stay in hostels as means to meet other people in
person (not because they are cheap). We also know from looking at
reviews on our platform and posts by our customers on third party
social networks that when our customers meet people to hang out
with, the experience is magical.
Driven by this insight, we launched a series of social features
in our iOS and Android apps in April and June 2022 respectively,
using the data from our platform to help our travellers find people
to hang out with. In essence, these features help our travellers
understand what kinds of travellers will be staying at a hostel on
the dates they are shopping for, and other chat room-based features
that help them meet other travellers in both the hostel and the
destination based on their shared interests.
Overall, I am very pleased with the take up of these features to
date. By year end, 50% of our bookings were being made by customers
who had opted in to the social network (social members); and more
than 80% of our social members were using the features while
travelling. Moreover, we observed that these social features were
attracting more profitable customers. In the first six weeks
post-acquisition (new customers acquired April - September 2022)
social members were 4x more likely to be recruited via the App;
make 1.6x the number of bookings; and twice as likely to make these
bookings via the App.
Over the next 18 months, we plan to build more value into the
social network through richer user profiles, richer messaging
capabilities and recommendations type features to help our
travellers find more people to hang out with, and more fun things
to do together. Over time, I expect that these features will
encourage more travellers in the hostelling category to use our
platform, and eventually provide confidence for other youth/student
travellers to meet new people to hang out with via solo travel in
hostels.
-- Leveraging our customer's booking patterns to optimise marketing allocation
A second differentiating feature of our category is the nature
of hosteller booking patterns compared to mainstream leisure
travellers. The vast majority of mainstream leisure travellers tend
to take a single destination trip, once a year or less. This is in
sharp contrast to hostellers, the majority of whom go on a trip
comprising multiple destinations, with some taking multiple trips
per year, and with many coming back over several years.
The relatively high frequency of customer bookings over time
post-acquisition, coupled with the characteristics of the bookings
themselves has enabled us to build accurate customer booking models
for our category that predict the future revenue of new customer
cohorts after only 28 days of observation. This in turn, enables us
to invest a greater proportion of revenue in new customer
acquisition with a high degree of confidence in the future revenue
of these new customers, and confidence in the return of those
marketing investments over time.
Following the launch of our social strategy we now have
additional valuable data points from our social network to power
our new customer acquisition activities, given that new customers
who sign up to the social network (social members) are
significantly more profitable than non-social members. This
distinction allows us to refine our new customer acquisition
activities using the common attributes of more valuable social
members as a targeting mechanic in addition to broad based
targeting of the hostel traveller category.
-- Providing additional relevant travel products to our customer base
The third differentiating feature of our category is in the
nature of the additional travel products purchased compared to
mainstream leisure customers. In general, mainstream leisure
customers will tend to purchase ancillary products such as ground
transportation, car rentals, and things to do when they arrive in
the destination.
Hostellers, on the other hand, are much more interested in other
group orientated travel products which provide additional
opportunities to find people to hang out with. These products would
include opportunities to meet other hostellers staying in the same
destination for walks, bike rides, eating out and pub crawls; and
events that hostels create and operate themselves for their
guests.
To that end, in August 2022 we launched Linkups in two pilot
destinations on our social network which enables our customers to
set up their own group events for others to join in that
destination. We then publish these Linkups (group events) to all of
our customers who will be in the same destination at the same time
as the group event date. Similar to our hostel product, we also
show our customers who else has signed up for each event, so that
they can get an idea as to what kind of other travellers they will
meet at the event. So far, the pilot results have been encouraging,
and we plan to release a variant in 2023 that will enable Hostels
to load their own group event catalogues in the same way onto our
network.
Investing in our platform
Over the course of the year, we also made solid progress on
modernising our platform. This included migrating our entire
technology stack to the cloud in the first half of the year and
exiting our on-premise data centres. During the second half of the
year, we started the process of upgrading our key legacy backend
applications to make them "cloud native".
Over the midterm, migrating from a cloud hosted stack to a
series of cloud native applications will deliver many advantages,
such as application level "on demand" scaling, a more flexible
microservices based architecture, and more opportunities to use off
the shelf features from our cloud services provider, such as
artificial intelligence and machine learning optimisation engines.
Collectively, these technology benefits will flow through into
reduced hosting costs and enable faster execution of our growth
strategy.
In parallel, we also completed the acquisition of the remaining
shares in Counter App Limited in March 2022 and completed bringing
the platform in house in early May 2022. Hostelworld first invested
in Counter App Limited in November 2019 to create a next generation
hostel Property Management System (PMS) platform to replace our
legacy PMS platform Back Pack Online (BPO). At that time, we chose
to partner with Counter's founders based on our belief in their
vision of a mobile centric platform built specifically for the
needs of the hostel industry. Over the last two plus years, the
Counter team has made good progress towards their vision with
Counter.app recently ranked 21st best PMS product out of 195 by
Hotel Tech Report (a leading property technology review site).
As part of the original shareholders' agreement, we included an
option for Hostelworld to take full ownership of Counter in
accordance with an acquisition process which was to commence in
November 2022. Earlier this year, we agreed with Counter's founders
to accelerate the timeline by which we would acquire full share
ownership and thus full operational control of the platform. This
enabled us to more tightly integrate Counter into Hostelworld's
ecosystem to accelerate its growth and align it more fully with our
overall platform modernisation strategy.
Progressing our ESG agenda
In parallel with helping millions of travellers in our category
Meet The World(R), we are also committed to building a better world
in everything we do.
-- Making sustainability a competitive advantage over time
Over the last 12 months, we have continued to see growing
evidence of the importance of sustainability in travel across all
stakeholders in the travel ecosystem. Within the hostelling
category itself, more than half of our customers now report that
"Sustainability plays a role in where I stay" and more than half of
our hostel partners report that they are actively working on
sustainability initiatives.
More broadly, we are continuing to see the evolution and broad
adoption of sustainable travel "standards" maintained by third
party bodies such as the UNWTO, GSTC and Travalyst; and the
emergence of sustainability related disclosure filing requirements,
driven by TCFD. All these developments point towards one outcome -
companies operating in the travel industry will be expected to do
more, and disclose more fully, their programmes to reduce the
impact of travel on the environment. With this rapidly evolving
context, we have organised our approach to Sustainability as three
linked initiatives
The first initiative relates to developing a data driven fact
base that we, and our hostel partners can use to promote hostelling
as the most sustainable accommodation option available. To that
end, earlier this year, we collaborated with Bureau Veritas to
calculate the Scope 1 & 2 emissions of a representative group
of hostels and compared these with the publicly available emissions
data from a representative group of hotel chains. In September
2022, Bureau Veritas published its findings, indicating that the
hostelling category emits approximately a third of the Scope 1 and
Scope 2 emissions (tCO2e) on a per bednight basis compared to a
one-night stay in a typical hotel chain [3] . This type of data is
invaluable for ourselves and our hostel partners to inform and
educate young travellers that staying in Hostels is the most
sustainable form of accommodation.
The second initiative takes the first initiative one step
further, by investing in providing a common framework for our
hostel partners to not only showcase their sustainability
credentials on our platform, but also make progress to more
sustainable operations. To that end, we have been working closely
with our hostel partners, the Global Sustainable Tourism Council
(GSTC) and a number of other relevant bodies to build out a set of
relevant sustainability criteria based on GSTC standards; and
exploring ways to capture a hostel's compliance with these criteria
in a standardised low-cost way, appropriate to the size and means
of the small businesses in our category. Eventually in Q4 2023 / Q1
2024, we plan to surface compliance to these criteria on our site,
such that our customers can make more informed decisions as to
where to stay.
Finally, our third initiative relates to reducing our own
emissions, and I am pleased to report during 2022 we were awarded
climate neutral status in partnership with South Pole, through our
investment in various climate offset projects to fully offset our
own emissions [4] . Furthermore, we are also complying with the
requirements of the Science Based Targets initiative and in 2022
reduced our Scope 1 & 2 emissions by over 42%, over base year
2021.
-- Investing in our employees and hostel partners and communities
This year saw us further enhance our agile approach to working,
introducing a host of new policies and initiatives to support our
employees. We launched the Hostelworld Mental Health Champions
programme, to raise awareness on the importance of mental health,
and offering our teams peer support across our global locations. In
addition, Diversity, Equity and Inclusion became a key focus
throughout the year, with 100% of our People Managers receiving
Inclusive Leadership Training, and a variety of thought provoking
and motivating events being hosted, celebrating periods such as
International Women's Day, Pride Month, and Black History Month. We
are also proud to have become supporters of the 30% Club Ireland in
May of this year and having been awarded the Investors in Diversity
Bronze Accreditation by the Irish Centre for Diversity.
More generally, the reduction in travel restrictions at the
beginning of the year also paved the way for us to restart our
regional hostel conferences and local hostel events. In April 2022
we held our first in person hostel conference since 2019 in
Copenhagen, and hosted smaller events in Rome, Porto and Lisbon.
These events provide a unique opportunity for us to promote our
strategy, share industry trends and solicit feedback from our
hostel partners. In parallel with these in person events, we
continued to run webinars across all our geographies, and ran our
Extraordinary HOSCARS once again this year introducing new
categories such as The Eco Warrior and The Digital Nomad.
Finally, as we seek to Build a Better World and positively
impact the communities we work and live within, we introduced
volunteering days to enable our team to give back, while offering
matched charity donations when our employees choose to give back by
donating recognition awards or referral bonuses through company led
charity initiatives.
-- Continuing to enhance our approach to corporate governance
During 2022, we continued to enhance our governance procedures
to ensure sound and informed decision making in the business and at
board level to ensure compliance with the recommendations of the
TCFD framework. Following amendments made to the Board Charter in
2021 which established climate risk and sustainability issues as
matters requiring on-going board oversight, an ESG Steering
Committee led by the CFO met monthly and provided updates to the
board at each scheduled board meeting during the year. The board
reviews progress against the various elements of our ESG strategy
and provides the right blend of oversight and leadership in making
sure that the business is run in a socially responsible way.
Summary
Over the course of 2022, we have demonstrated the capacity of
our business to capitalise on market demand as it returned, and
through a combination of operational progress, disciplined cost
control and the launch of our innovative 'social' strategy, we have
returned the business to profitable growth. This is a significant
milestone for our business, and I would like to thank each and
every one of our employees for their commitment and hard work
towards laying these strong foundations for a successful future. I
also want to thank our shareholders for their continued
support.
As I look to 2023, I am pleased to see that our social network
growth strategy is continuing to gain traction with our customers
and delivering as anticipated and will become even more valuable
for customers and hostel partners as more members join the network.
As outlined in our Capital Markets Day we expect continued growth
of our social network to drive growth in revenue, margins and
EBITDA, which coupled with an asset light operating model will
drive increased operating leverage and strong cash conversion.
Overall, I continue to believe that our business is well
positioned and firmly on track to deliver the medium-term targets
set presented at our Capital Markets Day in November 2022.
Gary Morrison
Chief Executive Officer
21 March 2023
Financial Review: Caroline Sherry
2022 2021 2022 2021
Net bookings 4.8m 1.5m Basic loss per share (14.71) cent (30.96) cent
========== ========== =============================== ============= =============
Net revenue EUR69.7m EUR16.9m Adjusted EBITDA profit/(loss)* EUR1.3m (EUR17.3m)
========== ========== =============================== ============= =============
Net average booking value
(ABV)* EUR14.90 EUR12.11 Adjusted EBITDA margin* 2% -102%
========== ========== =============================== ============= =============
Gross merchandise value (GMV)* EUR470.1m EUR116.7m Adjusted loss per share* (5.97) cent (22.12) cent
========== ========== =============================== ============= =============
Direct marketing costs per net
booking* EUR8.63 EUR8.53 Cash and cash equivalents EUR19.0m EUR25.3m
========== ========== =============================== ============= =============
Direct marketing costs as a % Adjusted free cash flow
of net revenue* 59% 76% absorption* (521)% (131)%
========== ========== =============================== ============= =============
Operating expenses EUR83.1m EUR49.5m Net asset position EUR52.2m EUR67.1m
========== ========== =============================== ============= =============
Operating loss for the year EUR13.6m EUR33.1m
========== ========== =============================== ============= =============
Loss for the year EUR17.3m EUR36.0m
========== ========== =============================== ============= =============
*The Group uses Alternative Performance Measures (APMs) which
are non-IFRS measures to monitor the performance of its operations
and of the Group as a whole. These APMs along with their
definitions are provided in the Appendix 1 of the Annual
Report.
Revenue
Revenue for the period was EUR69.7m, an increase of 312%
compared to 2021 (2021: EUR16.9m) driven by strong booking demand
as key markets recovered and travel restrictions eased.
The Group's net bookings totalled 4.8m (2021: 1.5m). Net Average
Booking Value (ABV), the average value paid by a customer for a net
booking, increased by 23% in 2022 (2021: 30% increase) to EUR14.90
(2021: EUR12.11), driven predominantly by bed price inflation
factors relating to destination specific recovery rates where a
higher proportion of bookings came from higher-value destinations
such as Europe and North America and longer length of stay
bookings.
Net GMV, which is the gross transaction value of bookings on our
platform less cancellations, totalled EUR470.1m in 2022 (2021:
EUR116.7m).
The deferred revenue provision at year end totalled EUR3.0m
(2021: EUR1.0m), and accounts for bookings with a free cancellation
option, where the cancellation date has not yet passed.
Cancellation rates have normalised post COVID-19 and we have noted
a higher portion of customers opting for the flexibility of a free
cancellation booking option, post COVID-19.
Operating expenses
Operating expenses before impairment totalled EUR83.1m (2021:
EUR49.5m), with EUR28.6m of the EUR33.6m yearly increase driven by
an increase in direct marketing spend, as a result of recovering
booking demand. Total marketing spend was EUR42.2m in 2022 (2021:
EUR13.8m) with direct marketing costs totalling EUR41.4m (2021:
EUR12.8m). Direct marketing costs as a percentage of net revenue
improved to 59% (2021: 76%) due to a decline in cancellation rates
and an increase in conversion. H1 2022 marketing spend was elevated
driven by Omicron where we experienced lower conversion rates in
destinations where some level of restrictions persisted and higher
cancellation rates. Marketing costs normalised in H2 2022 at circa
50-55%. This was due to a combination of normal travel patterns
resuming in primary markets and the app-centric social strategy
driving marketing efficiencies, with more customers booking in iOS
and Android applications.
The Group's operating loss amounted to EUR13.6m (2021:
EUR33.1m), a year on year decrease of EUR19.5m. This was primarily
driven by a combination of an increase in net revenue of EUR52.8m,
offset by an increase in direct marketing costs of EUR28.6m and in
staff costs of EUR2.9m (excluding the impact of capitalised
development labour). The remaining cost base remains largely
consistent year on year as the Group continues its focus of
maintaining our operating cost base and eliminating unnecessary
spend.
The Group also incurred a foreign exchange loss of EUR0.7m
(2021: loss EUR0.4m) which arose due to the strengthening of the US
dollar against the Euro.
Adjusted EBITDA profit of EUR1.3m (2021: loss of EUR17.3m) was
driven by strong booking recovery.
Exceptional items
Exceptional items are identified due to their nature or
materiality to help the reader form a better view of overall and
adjusted trading. The Group incurred EUR0.8m of exceptional cost
items in 2022. EUR0.5m related to a final settlement paid to the
founder of Counter App Limited, in respect of an exit from their
shareholders' agreement, and EUR0.3m in relation to settlement
costs for the final stage of a group-wide reorganisation (2021:
EUR0.6m). The new structure organises the Group's marketing,
product, development and analytics employees into autonomous growth
teams.
Share based payment
The Group has incurred a total share-based payment expense of
EUR2.4m (2021: EUR2.2m) relating to equity settled share-based
payment transactions.
EUR0.7m (2021: EUR0.7m) relates to costs incurred for the
Group's Long-Term Incentive Plan ("LTIP") schemes. The 2019 LTIP
grant which was due to vest in 2022, did not vest.
EUR1.7m (2021: EUR1.4m) has been recognised in relation to the
Group's Restricted Share awards ("RSU") scheme. In February 2022
50% of the RSU share award granted in 2021, in lieu of a cash
bonus, vested and the remaining 50% vested in February 2023
(February 2023: 1,027,653 shares vested, February 2022: 1,184,211
shares vested).
During 2022 the Company granted a new RSU award to selected
employees, including the Executive Directors and members of the
management team. A total of 3,339,084 nil cost awards were granted.
These awards will vest after three years dependent upon the
participant being employed by Hostelworld as of the vesting date
and satisfactory personal performance.
The balance of the award expense is in relation to the Save As
You Earn ("SAYE") scheme.
EUR2.4m (2021: EURnil) was transferred from the share-based
payment reserve to retained earnings for expired and exercised
share-based awards.
Earnings per share
Basic loss per share for the Group was 14.71 cent (2021: 30.96
cent).
Adjusted loss per share was 5.97 cent per share (2021 loss per
share: 22.12 cent per share). During 2022, the company issued 1.2m
shares to satisfy SAYE and restricted share awards granted by the
Company at a value EUR0.01 per share. The weighted average number
of shares in the period was 117.3m (2021: 116.3m) and the total
number of shares at the balance sheet date was 117.5m (2021:
116.3m).
Finance costs
The Group incurred EUR4.3m of finance costs in 2022 (2021:
EUR3.5m). Cash interest of EUR1.3m (2021: EURnil) was paid to HPS
Investment Partners LLC (or subsidiaries or affiliates thereof).
Under the terms of the agreement the Group elected to capitalise
all interest into the loan balance in year 1 of the facility. In
year 2 the Group has elected to capitalise 4% and pay cash interest
of a margin of 5% plus Euribor.
Taxation
The Group corporation tax charge for 2022 is EUR0.2m (2021:
EUR0.2m) and primarily relates to our UK, Spanish and Portuguese
operations where tax losses from our Irish operations cannot be
utilised.
The Group is carrying a deferred tax asset of EUR9.2m (2021:
EUR8.4m). The current year deferred tax credit of EUR0.8m (2021:
EUR0.8m) relates to a deferred tax asset recognised in the current
year for capital allowances not utilised and available for future
offset. Deferred tax assets are recognised to the extent that it is
probable that future taxable profits will be available against
which any unused tax losses and unused tax credits can be utilised.
Future taxable profits allowing recoverability of the deferred tax
asset have been estimated using the Board approved 2023 budget and
further four-year outlook. The Group has been loss making since
2020 as a direct consequence of COVID-19. The Group is budgeted to
return to a profit before tax driven by a recovery to normal
trading, which forms the basis of the recoverability of the
deferred tax asset.
The Group has availed of the Irish Revenue tax warehousing
scheme and deferred payment of all Irish employer taxes from
February 2021 to March 2022. The total amount warehoused at 31
December 2022 was EUR9.4m (2021: EUR8.0m). The Group has agreed
with the Irish Revenue Commissioners to not repay any balance due
on the warehoused facility until April 2024. The Group will incur
an interest charge of 3% from 01 May 2023 on the outstanding
warehoused liability. The Group continues to monitor and comply
with the appropriate Revenue guidelines applicable to this
scheme.
Development labour
Total intangible asset additions amount to EUR4.5m (2021:
EUR4.3m) relating to work performed on our social strategy,
platform modernisation and a new app 2.0 rolled out in 2022. This
balance includes EUR2.1m (2021: EUR1.7m) of staff costs capitalised
during the year. The year on year increase is due to the volume of
time spent in 2021 on experimentation and other non capitalisable
work, such as migrating to the cloud.
Liquidity and financing
At the balance sheet date cash and cash equivalents totalled
EUR19.0m (2021: EUR25.3m), including EUR750k (2021: EUR750k) of
restricted cash relating to a rental guarantee in place . The Group
has maintained strong discipline over its costs, and during peak
trading in spring and summer 2022 the Group generated cash.
The Group has borrowings of EUR31.1m (2021: EUR28.2m). In
February 2021 the Group signed a EUR30m 5-year term loan facility
with certain investment funds and accounts of HPS Investment
Partners LLC (or subsidiaries or affiliates thereof). An amount of
EUR28.8m, net of original issue discount, was drawn down on 23
February 2021. The facility bears interest at a margin of 9% per
annum over EURIBOR. The Group will look to refinance the facility
in 2023 to obtain lower margin interest rate costs.
Related parties
Related party transactions are disclosed in note 23 of the
Group's Annual Report and Financial Statements.
Dividend
The Board will not pay a cash dividend under its current policy
in respect of the 2022 financial year. Any payment of cash
dividends will be subject to the Group generating adjusted profit
after tax, the Group's cash position, any restrictions in the
Group's banking facilities and subject to compliance with Companies
Act 2006 requirements regarding ensuring sufficiency of
distributable reserves at the time of paying the dividend.
Caroline Sherry
Chief Financial Officer
21 March 2023
HOSTELWORLD GROUP PLC
CONSOLIDATED INCOME STATEMENT
FOR THE YEARED 31 DECEMBER 2022
2022 2021
Notes EUR'000 EUR'000
Revenue 3 69,690 16,901
Operating expenses before impairment 4 (83,113) (49,515)
Impairment of intangible assets 10 - (367)
Reversal of impairment of trade receivables 18 129
Share of results of associate (206) (225)
Operating loss (13,611) (33,077)
Finance costs 7 (4,301) (3,501)
Loss before taxation (17,912) (36,578)
Taxation credit 8 649 562
Loss for the year attributable to the equity owners of the parent Company (17,263) (36,016)
----------- ------------
Basic and diluted loss per share (euro cent) 9 (14.71) (30.96)
HOSTELWORLD GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2022
2022 2021
EUR'000 EUR'000
Loss for the year (17,263) (36,016)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations (11) 32
--------- --------
Total comprehensive income for the year attributable
to equity owners of the parent Company (17,274) (35,984)
--------- --------
HOSTELWORLD GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
2022 2021
Notes EUR'000 EUR'000
Non-current assets
Intangible assets 10 73,358 79,390
Property, plant and equipment 735 293
Deferred tax assets 11 9,174 8,352
Investment in associate 980 1,186
Cash and cash equivalents 12 750 750
-------- --------
84,997 89,971
Current assets
Trade and other receivables 3,246 2,002
Corporation tax 22 18
Cash and cash equivalents 12 18,212 24,517
-------- --------
21,480 26,537
-------- --------
Total assets 106,477 116,508
-------- --------
Issued capital and reserves attributable to equity owners of the parent
Share capital 13 1,175 1,163
Share premium 13 14,328 14,328
Other reserves 6,432 6,475
Retained earnings 30,308 45,140
Total equity attributable to equity holders of the parent Company 52,243 67,106
-------- --------
Non-current liabilities
Trade and other payables 14 9,438 8,049
Borrowings 15 30,869 28,209
-------- --------
40,307 36,258
Current liabilities
Trade and other payables 14 12,863 12,795
Lease liabilities 547 86
Borrowings 15 244 -
Corporation tax 273 263
-------- --------
13,927 13,144
-------- --------
Total liabilities 54,234 49,402
-------- --------
Total equity and liabilities 106,477 116,508
-------- --------
The financial statements were approved by the Board of Directors
and authorised for issue on 21 March 2023 and signed on its behalf
by:
Gary Morrison Caroline Sherry
Chief Executive Officer Chief Financial Officer
Hostelworld Group plc registration number 9818705 (England and
Wales)
HOSTELWORLD GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2022
Share Share Retained Other Total
capital premium earnings reserves
Notes EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------ --------- --------- ---------- ---------- ---------
Balance at 1 January
2021 1,163 14,328 81,156 1,218 97,865
------ --------- --------- ---------- ---------- ---------
Total comprehensive
income for the year - - (36,016) 32 (35,984)
------ --------- --------- ---------- ---------- ---------
Issue of warrants 15 - - - 3,073 3,073
------ --------- --------- ---------- ---------- ---------
Credit to equity
for equity settled
share-based payments - - - 2,152 2,152
------ --------- --------- ---------- ---------- ---------
Balance at 31 December
2021 1,163 14,328 45,140 6,475 67,106
------ --------- --------- ---------- ---------- ---------
Issue of shares 13 12 - - - 12
------ --------- --------- ---------- ---------- ---------
Total comprehensive
income for the year - - (17,263) (11) (17,274)
------ --------- --------- ---------- ---------- ---------
Credit to equity
for equity settled
share-based payments - - - 2,399 2,399
------ --------- --------- ---------- ---------- ---------
Transfer of exercised
and expired share-based
awards - - 2,431 (2,431) -
------ --------- --------- ---------- ---------- ---------
Balance at 31 December
2022 1,175 14,328 30,308 6,432 52,243
------ --------- --------- ---------- ---------- ---------
HOSTELWORLD GROUP PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2022
Notes 2022 2021
EUR'000 EUR'000
-------------------------------------------------------- ------ --------- -----------
Cash flows from operating activities
------ --------- -----------
Loss before tax (17,912) ( 36,578 )
------ --------- -----------
Amortisation and depreciation 11,597 12,411
------ --------- -----------
Impairment of intangible assets 10 - 367
------ --------- -----------
Share of results of associate 206 225
------ --------- -----------
Net profit on disposal of leases (1) (793)
------ --------- -----------
Net loss on disposal property, plant and equipment 1 492
------ --------- -----------
Finance expense 7 4,301 3,501
------ --------- -----------
Employee equity settled share-based payment expense 2,396 2,162
------ --------- -----------
Changes in working capital items:
------ --------- -----------
Increase in trade and other payables 1,457 5,074
------ --------- -----------
Increase in trade and other receivables (1,244) (321)
------ --------- -----------
Cash generated from/ (used by) operations 801 (13,460)
------ --------- -----------
Interest paid (including lease interest) (1,370) (155)
------ --------- -----------
Income tax paid (180) (136)
------ --------- -----------
Net cash used in operating activities (749) (13,751)
------ --------- -----------
Cash flows from investing activities
------ --------- -----------
Acquisition / development of intangible assets 10 (4,597) (4,397)
------ --------- -----------
Purchases of property, plant and equipment (196) (75)
------ --------- -----------
Net cash used in investing activities (4,793) (4,472)
------ --------- -----------
Cash flows from financing activities
------ --------- -----------
Deferred consideration - (345)
------ --------- -----------
Proceeds from borrowings 15 - 28,800
------ --------- -----------
Transaction costs relating to borrowings 15 - (862)
------ --------- -----------
Repayment of borrowings 15 - (1,164)
------ --------- -----------
Repayments of obligations under lease liabilities (752) (1,160)
------ --------- -----------
Net cash (used in)/ from financing activities (752) 25,269
------ --------- -----------
Net (decrease)/increase in cash and cash equivalents (6,294) 7,046
------ --------- -----------
Cash and cash equivalents at the beginning of the year 25,267 18,189
------ --------- -----------
Effect of foreign exchange rate changes (11) 32
------ --------- -----------
Cash and cash equivalents at the end of the year 12 18,962 25,267
------ --------- -----------
HOSTELWORLD GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
1. General Information
Hostelworld Group plc, hereinafter "the Company", is a public
limited Company incorporated in the United Kingdom on the 9 October
2015 under the Companies Act and is registered in England and
Wales. The registered office of the Company is One Chamberlain
Square, Birmingham, B3 3AX, United Kingdom.
The Company and its subsidiaries (together "the Group") provide
software and data processing services that facilitate hostel,
B&B, hotel and other accommodation bookings worldwide.
The Company's shares are quoted on Euronext Dublin and the
London Stock Exchange.
The financial information, comprising of the consolidated income
statement, consolidated statement of comprehensive income,
consolidated statement of financial position, consolidated
statement of changes in equity, consolidated statement of cash
flows and related notes, has been taken from the consolidated
financial statements of Hostelworld Group plc ("Company") for the
year ended 31 December 2022, which were approved by the Board of
Directors on 21 March 2023. The financial information does not
constitute statutory accounts within the meaning of sections 435(1)
and (2) of the Companies Act 2006 or contain sufficient information
to comply with the disclosure requirements of International
Financial Reporting Standards ("IFRS").
An unqualified report on the consolidated financial statements
for the year ended 31 December 2021 has been given by the auditors,
Deloitte Ireland LLP. It did not include reference to any matters
to which the auditors drew attention by way of emphasis without
qualifying their report and did not contain any statement under
section 498 (2) or (3) of the Companies Act 2006. The consolidated
financial statements will be filed with the Registrar of Companies,
subject to their approval by the Company's shareholders at the
Company's Annual General Meeting on 09 May 2023.
2. Going Concern
The Directors, after making enquiries, have a reasonable
expectation that the Group and Company has adequate resources to
continue operating as a going concern for the foreseeable
future.
Since the beginning of the COVID-19 pandemic, the Group has
maintained strong discipline over its cost base and cash reserves,
with trading and cash forecasts being prepared on a weekly basis.
Actions taken in the current period by the Directors to preserve
the Group's cash position include the non-payment of cash
dividends, the elimination of all non-essential operating costs
including marketing, recruitment, travel and other variable
overheads, the employment of a procurement manager to closely
monitor and challenge contract spend in place, the non-payment of
cash bonuses and the issuance of a restricted stock option in lieu
of a cash bonus to employees, exiting our long term lease
commitment facilities in favour of smaller office spaces across our
locations, organisational redesigns and associated headcount
reductions, and Government COVID-19 supports in Ireland which were
availed of until February 2022, as well as warehousing of Irish
employer and employee taxes incurred to March 2022.
The 2023 budget has been prepared on a 12-month calendar basis,
with the Board also approving a further four-year outlook, which
has also been considered within going concern to capture a period
of one year from date of signing.
Revenue and marketing cost projections within Budget 2023 have
been developed by triangulating three different models, where each
model output has helped to validate the others.
1. Regional level forecasting reflecting an easing of the
remaining travel restrictions in place. From 2020 through 2022 we
can evidence a correlated increase in revenue when borders reopen.
We have assumed a full recovery to pre-pandemic booking levels in
2023 in our largest markets, with other markets taking longer.
Forecasting at a regional level allows us to forecast specific bed
prices, booking models, geographic mix and seasonality effectively
in our modelling;
2. Channel mix between free and paid customers where assumptions
are made based on volume of new customer acquisitions, cost of
customer acquisitions and anticipated bookings based on marketing
spend;
3. Modelling new and returning customers by using statistical
models built using over 15 years of customer data. This rich
customer cohort data set enables us to model recurring revenue
streams, with a high degree of predictability. We layer in
additional knowledge on new customer acquisition costs and expected
economics between free and paid customers.
Forecasting at this regional and channel level also allows us to
adjust for bed price inflation and cost of living pressures. These
risks are somewhat mitigated as our target 18-34 year old
population typically have the means and the flexibility to travel,
tending to view it as a 'rite of passage' rather than purely
discretionary spend. Hostels are a cost-effective means to travel
and our strategy focusses on customers connecting on a free
platform that we provide.
We have assumed in Budget 2023 a modest contraction in our ABV
year on year, provisioning for unit bed price deflation versus 2022
and increased volume from Asian markets, where bed prices are
lower. We have modelled modest price inflation in our operating
costs. We have not assumed any revenue from partnerships such as
Roamies, Goki and Counter in our financial modelling.
Climate related risks can impact our business as a customer may
not want to travel, a hostel may be forced to close, or an area is
not accessible. The budgeting process has incorporated all
operating costs relating to our sustainability roadmap, as well as
the cost of future emission reductions and offsets. Following an
assessment completed by the Group, the budget does not contain any
other liabilities, provisions or contingent liabilities relating to
climate change. Revenue cashflows included in the budgeting process
have captured for example the impacts of adverse weather conditions
experienced by the Group in 2022 as we model based on historic run
rates at a country and seasonal level.
In addition to our base budget for 2023, we have prepared three
additional scenarios that depict different recovery levels and
trading volumes. An upside scenario tracks an increase in revenue
and operating expenses. A downside scenario includes reduced
revenue while maintaining the same level of operating spend. A
worst-case includes further reduced revenue with a reduction in
operating cost spend to mitigate. Under all scenarios, the Group
has sufficient cash reserves available and remains compliant with
financial covenants under its current term loan facility agreement
with HPS Investment Partners LLC (or subsidiaries or affiliates
thereof). The Group has also set out in its viability statement
within the annual report additional scenarios considered by the
Group in its assessment of going concern.
The directors took steps to ensure adequate liquidity is
available to the Group for the duration of the pandemic and
recovery period. On 19 February 2021 the Group signed a EUR30m
five-year term loan facility with certain investment funds and
accounts of HPS Investment Partners LLC (or subsidiaries or
affiliates thereof). An amount of EUR28.8m was received on 23
February 2021. The key features of the facility are as follows:
-- The facility is single drawdown and bears interest at a
margin of 9.0% per annum over EURIBOR (with a EURIBOR floor of
0.25% per annum).
-- Financial covenants comprise (1) adjusted net leverage
(Hostelworld has to ensure that total net debt is no more than 3.0
x adjusted EBITDA from 31 December 2023 to 30 September 2024, and
no more than 2.5 x adjusted EBITDA from 31 December 2024 onwards);
and (2) minimum liquidity (Hostelworld has to ensure that at close
of business on the last business day of each month until it is
testing the adjusted net leverage ratios there is free cash in
members of the Group which have guaranteed repayment of the
facility of at least EUR6.0 million).
-- Security on the facility includes the share capital of the
Group, the bank accounts of the Group and the Group's intellectual
property.
We were in compliance with our minimum liquidity covenants at 31
December 2022.
At this point in time, the consequences of the current unrest in
Ukraine are uncertain. We have not experienced a significant impact
to our revenue during 2022, and we continue to monitor any
development in the conflict, and the impact to the Group closely.
The Group has no operations in either Russia or Ukraine and total
forecasted revenues for 2022 in these regions was less than 0.01%
of the Group's net revenue. No revenue has been budgeted for these
countries in 2023.
Having considered the Group's Board approved 2023 budget, cash
flow forecasts prepared for 12 months from 21 March 2023, current
and anticipated trading volumes, current and anticipated levels of
cash and debt, together with mitigating actions available, the
Directors are satisfied that the Group and Company 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 Group financial statements.
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 worldwide, including ancillary on-line
advertising revenue.
The Directors determine, and present operating segments based on
the information that is provided internally to the Chief Executive
Officer, 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.
The CODM assesses the performance of the business based on the
consolidated adjusted loss after tax of the Group for the year.
This measure excludes the effects of certain income and expense
items, which are unusual by virtue of their size and incidence, in
the context of the Group's ongoing core operations, such as the
impairment of intangible assets and one-off items of
expenditure.
All revenue is derived wholly from external customers and is
generated from a large number of customers, none of whom is
individually significant.
The Group's major revenue-generating asset class comprises its
software and data processing services and is directly attributable
to its reportable segment operations. In addition, as the Group is
managed as a single business unit, all other assets and liabilities
have been allocated to the Group's single reportable segment. There
have been no changes to the basis of segmentation or the
measurement basis for the segment profit or loss.
Revenue split by country, is dependent on the location of the
hostel or property. Hostelworld has completed its software and data
processing services with. No single country, year on year,
contributes 10% or more of total revenue. Our top five countries
year on year account for 38% of overall revenue (2021: 43%)
relating to USA and key European destinations. Revenue split by
continent is presented as follows:
2022 2021
EUR'000 EUR'000
-------------------------- ---------- ----------
Europe 45,936 10,713
---------- ----------
Americas 15,719 5,213
---------- ----------
Asia, Africa and Oceania 8,035 975
---------- ----------
Total revenue 69,690 16,901
---------- ----------
Revenue arising within Ireland, the country of domicile,
amounted to EUR1,795k (2021: EUR492k). Disaggregation of revenue is
presented as follows:
2022 2021
EUR'000 EUR'000
---------- ----------
Technology and data processing fees 69,363 16,849
---------- ----------
Advertising revenue and ancillary services 327 52
---------- ----------
Total revenue 69,690 16,901
---------- ----------
In the year ended 31 December 2022, the Group generated 100%
(2021: 100%) of its revenues from the technology and data
processing fees that it charged to accommodation providers.
As at 31 December 2022, EUR3,005k of revenue relating to free
cancellation bookings has been deferred (2021: EUR1,020k).
Revenue is recognised at the time the reservation is made in
respect of non-refundable commission on the basis that the Group
has met its performance obligations at the time the booking is
made. In respect of the free cancellation product, which offers the
traveller the opportunity to make a booking on a free cancellation
basis and to receive a refund of their deposit in certain
circumstances, such related revenue is not recognised until the
last cancellation date has passed as one party can withdraw from
the contract until such a date has passed. Deferred revenue is
expected to be recognised within twelve months of initial
recognition.
The Group's non-current assets are located in Ireland,
Australia, the United Kingdom, Portugal, and China. Non-current
assets are disaggregated as follows:
2022 2021
EUR'000 EUR'000
-------------------------- ---------- --------
Total non-current assets 84,997 89,221
---------- --------
Analysed as:
---------- --------
Ireland 83,825 87,799
---------- --------
Australia 980 1,186
---------- --------
United Kingdom 20 32
---------- --------
Portugal 156 165
---------- --------
China 16 39
---------- --------
4. Operating Expenses excluding Impairment
Loss for the year has been arrived at after charging/(crediting)
the following operating costs:
2022 2021
Notes EUR'000 EUR'000
------ ---------- --------
Marketing expenses 42,233 13,792
------ ---------- --------
Staff costs 18,078 15,101*
------ ---------- --------
Credit card processing fees 2,047 573
------ ---------- --------
Loss on disposal plant, property and equipment 1 492
------ ---------- --------
Net profit on disposal of leases 14 (1) (793)
------ ---------- --------
Exceptional items 5 835 588
------ ---------- --------
FX loss 714 419
------ ---------- --------
Other administrative costs 7,609 6,932*
------ ---------- --------
Total administrative expenses 71,516 37,104
------ ---------- --------
Depreciation of tangible fixed assets 11 968 1,519
------ ---------- --------
Amortisation of intangible fixed assets 10 10,629 10,892
------ ---------- --------
Total operating expenses excluding impairment 83,113 49,515
------ ---------- --------
*An amount of EUR445k has been re-presented in the prior year
between staff costs and other administrative costs relating to
third party contractors engaged by the Group to assist on
development labour projects for a period of time.
Included in staff costs are government assistance amounts
totalling EUR376k (2021: EUR1,771k) for a subsidy received under
the Employment Wage Subsidy Scheme in Ireland. Prior year amounts
also include EUR15.9k received for furloughed employees under the
Coronavirus Job Retention Scheme in the UK.
Included within marketing expenses are direct marketing costs of
EUR41,393k (2021: EUR12,763k). Other administration costs include
rent and rates, legal and professional, training and recruitment,
website maintenance and security, ecommerce and data analytics.
Included within operating expenses is a total credit of EUR184k
(2021: EURnil) in relation to an R&D tax credit claimed in
respect of projects completed in 2021.
5. Exceptional Items
2022 2021
EUR'000 EUR'000
------------------------------ ---------- --------
Merger and acquisition costs - (127)
---------- --------
Litigation settlements 519 -
---------- --------
Restructuring costs 316 715
---------- --------
Total 835 588
---------- --------
In the current year, exceptional items relate to a final
settlement amount paid to the founder of Counter App Limited, on
their exit from the company and associated legal costs. Current and
prior year restructuring costs primarily relate to staff costs
incurred as part of a restructure to a simpler and more efficient
growth orientated organisational structure. The new structure
organises the Group's marketing, product, development and analytics
employees into autonomous growth teams. The restructure concluded
in 2022. Prior year merger and acquisition credit of EUR127k
relates to a release of costs previously accrued for due to a
revision of estimate for professional fees incurred on related
service.
6. Staff Costs
The average monthly number of people employed (including
Executive Directors) was as follows:
2022 2021
Average number of persons employed:
----- -----
Administration and sales 130 110
----- -----
Development and information technology 109 116
----- -----
Total 239 226
----- -----
The aggregate remuneration costs of these employees is analysed
as follows:
2022 2021
Notes EUR'000 EUR'000
-------- ---------- ----------
Staff costs comprise:
-------- ---------- ----------
Wages and salaries 14,638 12,378
-------- ---------- ----------
Termination benefits - exceptional items 218 672
-------- ---------- ----------
Social security costs 1,987 1,367
-------- ---------- ----------
Pensions costs 432 460
-------- ---------- ----------
Other benefits 687 442
-------- ---------- ----------
Share option charge 2,396 2,162
-------- ---------- ----------
20,358 17,481
-------- ---------- ----------
Capitalised development labour 10 (2,062) (1,708)
-------- ---------- ----------
Total 18,296 15,773
-------- ---------- ----------
7. Finance Costs
2022 2021
Notes EUR'000 EUR'000
------ ---------- -----------
Interest on lease liabilities 31 102
------ ---------- -----------
Finance costs - HPS facility 15 4,243 3,344
------ ---------- -----------
Finance costs - other 27 55
------ ---------- -----------
Total 4,301 3,501
------ ---------- -----------
8. Taxation
2022 2021
Notes EUR'000 EUR'000
------ ---------- -----------
Corporation tax:
------ ---------- -----------
Current year charge 183 372
------ ---------- -----------
Adjustments in respect of prior years (10) (178)
------ ---------- -----------
Total 173 194
------ ---------- -----------
Origination and reversal of temporary differences 11 (822) (756)
------ ---------- -----------
Total tax credit for the year (649) (562)
------ ---------- -----------
Corporation tax is calculated at 12.5% (2021: 12.5%) of the
estimated taxable profit for the year. The Irish 12.5% corporation
tax rate has been used as this is the rate at which most of the
Group's profits will be taxed. Taxation for other jurisdictions is
calculated at the rates prevailing in the respective jurisdictions.
The corporation tax charge relates primarily to our UK, Portuguese
and Spanish operations where tax losses from our Irish operations
cannot be utilised. The charge for the year can be reconciled to
the consolidated income statement as follows:
2022 2021
EUR'000 EUR'000
--------- -----------
Loss before tax on continuing operations (17,912) (36,578)
--------- -----------
Tax at the Irish corporation tax rate of 12.5% (2021: 12.5%) (2,239) (4,572)
--------- -----------
Effects of:
--------- -----------
Tax effect of expenses that are not deductible in determining taxable profit 1,672 1,556
--------- -----------
Tax effect of losses not utilised 480 3,173
--------- -----------
Tax effect of losses utilised (34) -
--------- -----------
Tax effect of income taxed at different rates 201 50
--------- -----------
Depreciation less than capital allowances (53) (130)
--------- -----------
Effect of different tax rates of subsidiaries operating in other jurisdictions 156 295
--------- -----------
Recognition of deferred tax asset (822) (756)
--------- -----------
Adjustments in respect of prior years (10) (178)
--------- -----------
Total (649) (562)
--------- -----------
In 2022 the Group had an unrecognised deferred tax asset of
EUR4,607k (2021: EUR4,127k). No deferred tax asset was recognised
in the current or prior year for unused trading tax losses as it
was not considered probable that the Group will be able to utilise
the deferred tax asset for these losses over a five-year period
based on the profit or loss set out within the Group's 2023 budget
and further four-year outlook. Unrecognised deferred tax assets
relate to Irish trading losses and have no expiry date.
9. Loss per Share
Basic loss per share is computed by dividing the loss for the
year after tax available to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the year.
2022 2021
Weighted average number of shares in issue ('000s) 117,338 116,321
--------- -----------
Loss for the year (EUR'000s) (17,263) (36,016)
--------- -----------
Basic loss per share (euro cent) (14.71) (30.96)
--------- -----------
Diluted loss per share is computed by adjusting the weighted
average number of ordinary shares in issue to assume conversion of
all potential dilutive ordinary shares. The issue of warrants and
share options and share awards are the Company's only potential
dilutive ordinary shares. Ordinary shares potentially issuable from
share-based payment arrangements and warrants are anti-dilutive due
to the loss in the financial period meaning there is no difference
between basic and diluted earnings per share.
2022 2021
Weighted average number of ordinary shares in issue ('000s) 117,338 116,321
-------- ----------
Effect of dilutive potential ordinary shares:
-------- ----------
Share options ('000s) - -
-------- ----------
Weighted average number of ordinary shares for the purpose of diluted earnings per share
('000s) 117,338 116,321
-------- ----------
Diluted loss per share (euro cent) (14.71) (30.96)
-------- ----------
10. Intangible Assets
The table below shows the movements in intangible assets for the
year:
Goodwill Domain Technology Affiliates Contracts Capitalised Total
Names Development
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
--------- ---------- ----------- --------------------- ---------------------- ----------
Cost
--------- ---------- ----------- --------------------- ---------------------- ----------
Balance at 1 January
2021 47,274 214,708 14,100 5,500 18,021 299,603
--------- ---------- ----------- --------------------- ---------------------- ----------
Additions - - - - 4,397 4,397
--------- ---------- ----------- --------------------- ---------------------- ----------
Disposals for the year - - (52) - - (52)
--------- ---------- ----------- --------------------- ---------------------- ----------
Balance at 31 December
2021 47,274 214,708 14,048 5,500 22,418 303,948
--------- ---------- ----------- --------------------- ---------------------- ----------
Additions - 71 15 - 4,511 4,597
--------- ---------- ----------- --------------------- ---------------------- ----------
Balance at 31 December
2022 47,274 214,779 14,063 5,500 26,929 308,545
--------- ---------- ----------- --------------------- ---------------------- ----------
Accumulated
amortisation and
impairment
--------- ---------- ----------- --------------------- ---------------------- ----------
Balance at 1 January
2021 (29,426) (150,488) (13,922) (5,500) (14,015) (213,351)
--------- ---------- ----------- --------------------- ---------------------- ----------
Charge for year - (7,810) (119) - (2,963) (10,892)
--------- ---------- ----------- --------------------- ---------------------- ----------
Disposals for the year - - 52 - - 52
--------- ---------- ----------- --------------------- ---------------------- ----------
Impairment recognised - - - - (367) (367)
--------- ---------- ----------- --------------------- ---------------------- ----------
Balance a t 31
December 2021 (29,426) (158,298) (13,989) (5,500) (17,345) (224,558)
--------- ---------- ----------- --------------------- ---------------------- ----------
Charge for year - (7,813) (32) - (2,784) (10,629)
--------- ---------- ----------- --------------------- ---------------------- ----------
Balance a t 31
December 2022 (29,426) (166,111) (14,021) (5,500) (20,129) 235,187
--------- ---------- ----------- --------------------- ---------------------- ----------
Carrying amount
--------- ---------- ----------- --------------------- ---------------------- ----------
At 31 December 2021 17,848 56,410 59 - 5,073 79,390
--------- ---------- ----------- --------------------- ---------------------- ----------
At 31 December 2022 17,848 48,668 42 - 6,800 73,358
--------- ---------- ----------- --------------------- ---------------------- ----------
Capitalised development cost additions during the year comprised
of internal staff costs of EUR2,062k (2021: EUR1,708k) and other
internally generated additions of EUR2,449k (2021: EUR2,689k).
Development costs have been capitalised in accordance with IAS 38
Intangible Assets and are therefore not treated, for dividend
purposes, as a realised loss. Hostelworld continue to utilise
affiliate contracts to generate revenue and continue to pay
affiliate partner commissions.
Impairment review
The carrying value of the capitalised development costs balance
at 31 December 2022 is EUR6,800k (2021: EUR5,073k). Prior year
impairment charge of EUR367k relates to an impairment of a specific
project following a management decision to cease ongoing
investment.
The carrying value of the goodwill balance at 31 December 2022
is EUR17,848k (2021: EUR17,848k) and relates to an investment in
Hostelworld.com Limited by the Group in 2009. Goodwill, which has
an indefinite useful life, is subject to annual impairment testing,
or more frequent testing if there are indicators of impairment.
Following impairment testing based on the assumptions below, no
impairment was recognised for goodwill in the current or prior
year.
The carrying value of the Group's domain names and certain
technology assets, referred to henceforth as 'intellectual
property' at 31 December 2022 is EUR48,668k (2021: EUR56,410k).
Following impairment testing based on the assumptions below, no
impairment was recognised for the Group's intellectual property in
the current or prior year.
11. Deferred Taxation
Deferred tax assets primarily relating to temporary differences
between the carrying value of intangible assets and their tax
base.
2022 2021
EUR'000 EUR'000
----------------------------------------------- ---------- ----------
Opening balance 8,352 7,596
---------- ----------
Credited to the consolidated income statement 822 756
---------- ----------
Closing balance 9,174 8,352
---------- ----------
The deferred tax credit for the year ended 31 December 2022 of
EUR822k (2021: EUR756k) relates to a deferred tax asset created in
the current year for capital allowances not utilised and available
for future offset. Deferred tax is determined using tax rates and
laws enacted or substantively enacted by the reporting date. The
total tax charge in future periods will be affected by any changes
to the applicable tax rates in force in jurisdictions in which the
Group operates and other relevant changes in tax legislation.
Deferred tax assets are recognised to the extent that it is
probable that future taxable profits will be available against
which any unused tax losses and unused tax credits can be
utilised.
12. . Cash and Cash equivalents
2022 2021
EUR'000 EUR'000
---------- --------
Non-current assets
---------- --------
Cash and cash equivalents 750 750*
---------- --------
Total 750 750
---------- --------
Current assets
---------- --------
Cash and cash equivalents 18,212 24,517*
---------- --------
Total 18,212 24,517
---------- --------
*Upon review of the April 2022 IFRIC Agenda item "Demand
Deposits with Restrictions on Use arising from a Contract with a
Third Party (IAS 7 Statement of Cash Flows)" the Group has changed
the presentation of cash and cash equivalents which are not
available for use for the period ended 31 December 2022. The amount
of EUR750k, which relates to a rental guarantee in place, has been
classified in non-current assets as the guarantee is in place for a
period of longer than 12 months after balance sheet date. As the
amount is held in a bank account which can be accessed by the Group
the amount has been disclosed as a cash and cash equivalent.
Balance of cash and cash equivalents comprise cash and
short-term bank deposits only.
13. Share capital
No of shares of EUR0.01 each Ordinary shares Share premium Total
(Thousands) EUR'000 EUR'000 EUR'000
----------------------------- ---------------- -------------- --------
At 1 January 2021 and 31 December 2021 116,321 1,163 14,328 15,491
----------------------------- ---------------- -------------- --------
Share issue - 22 February 2022 1,184 12 - 12
----------------------------- ---------------- -------------- --------
Share issue - 30 September 2022 6 - - -
----------------------------- ---------------- -------------- --------
At 31 December 2022 117,511 1,175 14,328 15,503
----------------------------- ---------------- -------------- --------
The Group has one class of ordinary shares which carries no
right to fixed income. The share capital of the Group is
represented by the share capital of the parent Company, Hostelworld
Group plc. All the Company's shares are allotted, called up, fully
paid and quoted on the London Stock Exchange and Euronext
Dublin.
On 19 February 2021, the Group agreed to issue warrants of
3,315,153 ordinary shares of EUR0.01 each in the capital of
Hostelworld (equivalent to 2.85% of Hostelworld's issued share
capital at the time of warrants issue). As at 31 December 2022 no
warrants had been exercised. Further detail is included within note
15.
On 22 February 2022, the company issued 1,184,211 shares to
satisfy restricted share awards granted by the Company at a value
EUR0.01 per share.
On 30 September 2022, the company issued 6,070 shares in
relation to the 2019 SAYE at a value of EUR0.01 per share.
14. Trade and other payables
2022 2021
EUR'000 EUR'000
---------- ----------
Non-current liabilities
---------- ----------
Payroll taxes 9,438 8,049
---------- ----------
Total 9,438 8,049
---------- ----------
The Group has availed of the Irish Revenue tax warehousing
scheme and deferred payment on all Irish employer taxes arising
during the period from February 2021 to March 2022. Total amount
warehoused at 31 December 2022 amounted to EUR9,438k (2021:
EUR8,049k). The Group continues to liaise with Irish Revenue on the
matter and comply with all appropriate guidelines applicable. At 31
December 2022 amounts warehoused are recognised as non-current
reflecting the intention and unconditional right not to repay
balance within 12 months. The Group have agreed with the Irish
Revenue to commence a repayment plan in April 2024.
2022 2021
EUR'000 EUR'000
---------- ----------
Current liabilities
---------- ----------
Trade payables 3,944 5,425
---------- ----------
Accruals and other payables 5,136 6,113
---------- ----------
Deferred revenue 3,201 1,036
---------- ----------
Payroll taxes 582 221
---------- ----------
Total 12,863 12,795
---------- ----------
At 31 December 2022, EUR3,005k of revenue was deferred relating
to free cancellation bookings (2021: EUR1,020k), EUR178k was
deferred relating to featured listings (2021: EUR16k) and EUR18k
was deferred relating to Roamies (2021: EURnil).
Included in accruals and other payables is a credit provision
amounting to EUR150k (2021: EUR1,300k) for vouchers and incentives
to customers for use on future bookings reflecting the expected
value attached to vouchers. Reduction year on year relates to
utilisation rates which materialised during 2022 where a reduced
cohort of customers used their vouchers than what the Group have
historically experienced and takes account of a large volume of
vouchers expiring in Q1 2023 for customers who obtained a voucher
instead of a refund during COVID-19. Also included in accruals and
other payables is an amount of EUR1,778k (2021: EUR2,017k) relating
to customers who have cancelled their free cancellation booking but
have not yet been refunded.
15. Borrowings
2022 2021
EUR'000 EUR'000
---------- ----------
Opening Balance 28,209 1,164
---------- ----------
Received on Drawdown - 28,800
---------- ----------
Repayments - (1,164)
---------- ----------
Loan issuance costs - issue of warrants - (3,073)
---------- ----------
Transaction costs relating to borrowings - (862)
---------- ----------
Finance costs 4,243 3,344
---------- ----------
Finance interest paid (1,339) -
---------- ----------
Total 31,113 28,209
---------- ----------
On 19 February 2021 the Group signed a EUR30m five-year term
loan facility with certain investment funds and accounts of HPS
Investment Partners LLC (or subsidiaries or affiliates thereof).
The facility is single drawdown and bears interest at a margin of
9.0% per annum over EURIBOR (with a EURIBOR floor of 0.25% per
annum). In the first year following drawdown, all interest was
rolled up and capitalised. Between the first and third
anniversaries of drawdown, Hostelworld elected to capitalise 4.0%
per annum of the accruing interest with the balance of the interest
during that period (and all interest accruing after the third
anniversary of drawdown) being cash pay.
The facility agreement includes the following financial
covenants: (1) adjusted net leverage (Hostelworld has to ensure
that total net debt is no more than 3.0 x adjusted EBITDA from 31
December 2023 to 30 September 2024, and no more than 2.5 x adjusted
EBITDA from 31 December 2024 onwards); and (2) minimum liquidity
(Hostelworld has to ensure that at close of business on the last
business day of each month until it is testing the adjusted net
leverage ratios there is free cash in members of the Group which
have guaranteed repayment of the facility of at least EUR6.0
million).
The lenders have the right to require repayment of the facility
if Hostelworld is subject to a change in control and Hostelworld
has the option to repay the facility early. If the facility is
repaid for any reason within the first four years of its term a
prepayment fee is payable as follows: if repayment is made (1) in
the first two years after drawdown then all interest from the date
of repayment to the second anniversary of drawdown is due, plus a
2% fee of the amount repaid, (2) between the second and the third
anniversary of drawdown the fee is 2% of the amount repaid and (3)
between the third and fourth anniversary of drawdown the fee is 1%
of the amount repaid.
Hostelworld and its principal trading subsidiaries will
guarantee repayment of the facility and amounts payable under it
and provide the lenders with a customary security package over
their assets. Cash dividends to shareholders are permitted provided
total net debt is below 2.0 x adjusted EBITDA, no events of default
are ongoing and the above stated minimum liquidity covenant will be
complied with after taking into account the proposed dividends. The
Group is required to fund any new acquisitions through new equity
and/or through a maximum of 50% of retained excess cashflow. Any
acquisition by the Group of the remaining shareholdings in Goki PTY
Limited and Counter App Limited is required to be funded from cash
on the balance sheet.
An amount of EUR28.8m was received on 23 February 2021, net of
original issue discount.
Issue of warrants:
In connection with the facility, Hostelworld has agreed to issue
warrants over 3,315,153 ordinary shares of EUR0.01 each in the
capital of Hostelworld (equivalent to 2.85% of Hostelworld's
current issued share capital at the time of issue of the warrants)
to the lender. The warrants may be exercised at any time during the
term of the loan and for a twelve-month period following its
scheduled termination at an exercise price of EUR0.01 per ordinary
share. Shares issued will be the same class and carry the same
rights as existing shares. An amount of EUR3,073k was recorded for
the initial recognition of the warrants calculated on the basis of
the market price of the shares on the date of the agreement 19
February 2021 of EUR3,106,538 minus the subscription price of
EUR33,152 (3,315,153 X EUR0.01). No warrants have been exercised as
at 31 December 2022.
[1] PIK interest due EUR3.4m
[2] No balance is due on the facility until April 2024, when the
Group will finalise a repayment schedule with the Revenue
Commissioners
([3]) The data was compiled by independent laboratory testing,
inspection and certification services provider, Bureau Veritas,
including hostels with 27,509 beds across Europe and was
benchmarked against a sample of the average emissions per bed in
representative European hotel chains. Bureau Veritas examined data
in 2019, 2020 and 2021, with 2019 figures represented as the
benchmark given capacity constraints during ongoing periods of
Covid-19 travel restrictions in 2020 and 2021. Findings show that
average carbon emissions per bed in hotels averages at 1.18 tCO 2
e, compared with 0.30 tCO 2 e in the hostels surveyed as part of
the study. tCO 2 e measures in metric tons the carbon dioxide
equivalent of Scope 1 and Scope 2 emissions of the hostels and
hotels studied. Study source: www.bureauveritas.co
.uk/hostelworld-carbon-impact-analysis
([4]) We have offset the cost of all Scope 1, Scope 2 and Scope
3 emissions made by the group. This includes all Scope 3 emissions
which are purchased consumables offset already the companies that
we partner with. South Pole have independently verified our
emissions.
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END
FR EAFDFAFDDEAA
(END) Dow Jones Newswires
March 22, 2023 03:00 ET (07:00 GMT)
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