Hostelworld Share News (HSW)

(Sharecast News) - Shares in Hostelworld rose strongly on Thursday after online travel agent reiterated its full-year guidance after an improvement in trading in the third quarter.

The company said generated revenues were up 5% year-on-year over the three months to 30 September, helped by a 2% rise in bookings and 3% higher average booking values.

This was bolstered by an improved effective commission rate, which increased to 16.3% from 15.2% the year before.

Meanwhile, direct marketing costs equalled 47% of revenues during the quarter, down from 51% in the first half and 49% a year earlier.

For the first three quarters combined, net revenues were more or less flat at €72.6m, as 1% higher net bookings were offset by lower deferred revenue benefits. Year-to-date adjusted ETBIDA fell to €15.4m from €17.8m, with margins down to 21% from 25%.

"Our third-quarter results show that the strategic plan we announced at our Capital Markets Day is delivering positive results," said chief executive Gary Morrison.

The company kept its full-year adjusted EBITDA guidance of €19.8m, which is said was in line with market forecasts.

"Looking ahead, we are on schedule to launch our social network monetisation and the provision of budget accommodation initiatives in the fourth quarter. The timely delivery of these foundational initiatives is a key step towards delivering our growth strategy, as set out at our Capital Markets Day," Morrison said.

Shares were 5.1% higher at 124p by 1004 BST.