Hostelworld Group PLC Trading and financing update (4703L)
January 13 2021 - 1:00AM
UK Regulatory
TIDMHSW
RNS Number : 4703L
Hostelworld Group PLC
13 January 2021
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
EUR18.2 million (as at 30 June 2020: EUR29.4 million) with current
liabilities of EUR20.7 million (as at 30 June 2020: EUR23.3
million), a reduction of EUR2.6 million versus June 2020 due to the
partial repayment of a EUR3.5 million short-term financing
facility. Cash liabilities due in H1 2021 are expected to be in the
range of EUR6.5 - 7.0 million.
Q4 2020 monthly operating cash outflow of EUR1.7 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 EUR30m 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:
Hostelworld Group plc Tel: +353 (0) 1 498 0700
Gary Morrison Chief Executive
Officer
Caroline Sherry Chief Financial
Officer
Rudolf O'Kane Head of Commercial
Finance
Powerscourt Tel: +44 (0) 20 7250 1446
Lisa Kavanagh / Eavan Gannon hostelworld@powerscourt-group.com
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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