Trading and financing update
LEI:213800OC94PF2D675H41
Hostelworld Group plc
("Hostelworld" or the "Group" or "we")
Trading and financing update
13 January 2021: Hostelworld, a leading global OTA focused on the hostel market, provides the following update on current trading and financing.
Trading and financing update
As anticipated in our trading update dated 15 October 2020, global travel demand remained muted throughout Q4 2020 with ongoing travel restrictions continuing to severely impact the global travel industry. The trading deterioration we had experienced since the end of August 2020 continued throughout Q4 2020, with minimal booking demand and ABV contraction primarily due to bed price deflation. Notwithstanding this, we have continued to release significant enhancements to strengthen our core platform to enhance our service offering and competitiveness when normal travel patterns resume.
FY 2020 net bookings were in line with the guidance range of 20 - 22% of FY 2019 issued at the time of our October trading update.
As at 31 December 2020, the Group's net cash position stood at €18.2 million (as at 30 June 2020: €29.4 million) with current liabilities of €20.7 million (as at 30 June 2020: €23.3 million), a reduction of €2.6 million versus June 2020 due to the partial repayment of a €3.5 million short-term financing facility. Cash liabilities due in H1 2021 are expected to be in the range of €6.5 - 7.0 million.
Q4 2020 monthly operating cash outflow of €1.7 million remains in line with expectations.
COVID-19 continues to cause significant disruption to the global travel market, resulting in prolonged travel restrictions and lockdowns across key geographies, impacting demand. While the positive news around vaccination programmes is welcomed, the timing of the recovery remains uncertain. As a result, while we continue to actively assess our cost base, the Board has considered our future funding requirements and is actively evaluating both debt and equity options, to secure the Group's long-term financial position.
Throughout Q4 2020, Hostelworld has had positive engagement with a number of debt providers and is now in negotiations with a short-list of selected lenders in relation to a new €30m debt facility. The proposed facility is expected to have a contractual maturity of five years, at a cost in the low to mid-teens, with other conditions, including a minimum liquidity covenant, security and warrants provisions, in line with current market practice for facilities of this nature.
Whilst there is no guarantee that the Company will agree the terms of the debt facility currently being negotiated, in advance of borrowing under the potential facility, the Company will be required to obtain shareholder approval to amend the borrowing limit contained within the Company's Articles of Association.
Gary Morrison, Chief Executive of Hostelworld, commented:
"COVID-19 has had a prolonged and significant impact on our business and the entire global travel industry. We have taken swift action to protect the business and improve the core platform to position the business well for when demand returns. Given the prolonged nature of the restrictions, we are now actively assessing ways to strengthen our balance sheet.
The Board and I remain confident that the Group's enhanced service offering, and competitive positioning will provide a strong platform to deliver growth when normal travel patterns resume, delivering long-term future upside for our shareholders."
MAR information
This announcement contains inside information for the purposes of Article 7 of the UK version of the Market Abuse Regulation (EU 596/2014) ("MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Company by Caroline Sherry, Chief Financial Officer.
For further information please contact:
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Hostelworld Group plc Gary Morrison Chief Executive Officer Caroline Sherry Chief Financial Officer Rudolf O'Kane Head of Commercial Finance |
Tel: +353 (0) 1 498 0700 |
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Powerscourt Lisa Kavanagh / Eavan Gannon |
Tel: +44 (0) 20 7250 1446 hostelworld@powerscourt-group.com
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About Hostelworld Group
Hostelworld Group, the global hostel-focused online booking platform, inspires passionate travellers to Meet The World, and come back with life-changing stories to tell. Our customers are not your average tourists; they crave cultural connection and unique experiences that we make possible by providing an unbeatable selection of hostels in unmissable locations - all in the palm of their hand.
It is the social nature and community feel of hostels and their environment that enable travellers to embrace journeys of discovery, adventure and meaning. We have more than 13 million reviews across over 17,000 hostels in more than 179 countries, making our brand the leading online hub for social travel. Our website operates in 19 different languages and our mobile app in 13 languages.
Disclaimer
This announcement may contain forward-looking statements with regard to the financial position and results of Hostelworld's activities. Any forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Many of these risks and uncertainties relate to factors that are beyond Hostelworld's ability to control or estimate precisely. The risks and other factors which may affect financial performance are detailed in Hostelworld's publicly filed annual reports. Any forward-looking statements in this announcement are current only as of the date on which such statements are made. Hostelworld undertakes no obligation to update any forward-looking statements, save in respect of any requirement under applicable law or regulation.
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