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LONDON (Alliance News) - Hostelworld Group PLC said on Tuesday its interim profit nearly halved in the first six months of June due to a drop in revenue, despite a higher number of bookings.
In addition, the online booking platform has appointed TJ Kelly as chief financial officer with effect from November 21.
Kelly will be joining from Glanbia, where he is chief financial officer of the Irish food and nutrition firm's Performance Nutrition division. He has been a part of this division for six years since 2012, and has been part of the group for 12 years since 2006.
"We are delighted that someone of TJ's calibre is joining us. TJ brings with him a wealth of financial experience in international consumer-focused businesses and has a proven track record in financial leadership which will help us drive the business forward and deliver on our ambitious goals," said Chief Executive Officer Gary Morrison.
For the six months to the end of June, Hostelworld reported a pretax profit of EUR2.8 million, down from EUR5.2 million the year before, on revenue that dropped by 9.0% to EUR42.6 million from EUR46.6 million.
This was due to the impact of deferred revenue from free cancellation bookings, which corresponds to a 3.5% decrease on a constant currency basis .
The total booking volume for the period however rose to 4.0 million from 3.9 million the year before, driven by a good performance in the core Hostelworld brand.
Hostelworld declared an interim dividend of 4.8 cents per share, down from 5.1 cents the year before.
"Overall, our first half results were in line with our expectations. As previously reported, the market, particularly in Europe, is increasingly competitive. In addition the World Cup and the unusually hot weather in Europe have also led to a softness in bookings in the peak summer months of July and August. If these trends continue like for like, growth in group bookings is likely to be flat for the full year given the expected declines in our supporting brands," Morrison said.
"In response to these circumstances, we are continuing our program of rigorous cost control and our ABV continues to benefit from the increase in the base rate commission implemented in February. Weaker demand also leads to a natural reduction in variable marketing expenses. Combined, these actions will mitigate some of the softness in bookings at the Ebitda level. We continue to see strong underlying cash conversion," Morrison added.
Shares in Hostelworld were down 8.2% at 268.00 pence on Tuesday.
