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Hostelworld

August 2020

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • HSW
  • Price:
  • 63p
Could this be a turning point for the shares after a torrid period? Hostelworld has raised £14m via a placing (19.9% at a 7% discount) and put in place new bank facilities (Eu7m, plus a separate Eu3.5m facility) which, alongside its existing net cash of EU15.2m, provides improved liquidity to trade through Covid-19. Separately, the group has also initiated cost reduction measures, including cutting all brand marketing and furloughing some staff, to mitigate the sharp reduction in trading volumes. As a result, it now expects an H1 20 EBITDA loss in the range of Eu8m-Eu9m (H1 ’19 EBITDA profit: Eu8.9m). Estimated monthly cash costs are expected to reduce to Eu1.9m. Hostelworld expects the vast majority of ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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