Hostelworld Share Discussion Threads

[lordyjordy1] 26/5/2016 17:32

price to earnings?

[mammyoko] 26/5/2016 17:23

Watch out here all holders. I used to know the H&F MD who bought this rubbish back in 2009. I remember talking to him about it at the time and the emphasis he placed on what a great marketeer the CEO was. He did not make him sound like the person I would want to invest in. Knowing the H&F MD as I do you can be absolutely sure that this was dressed up to within an inch of its life for sale.
The supposedly revolutionary aspect to this business was that it had registered literally hundreds of thousands of IP addresses (think of the annual fees) so that any search returned Hostelworld/Web Reservations. I'm afraid I have no idea whether this is standard practice but it seemed like an elaborate and expensive strategy and certainly was explained to me in the context that this wasn't entirely ethical.
Don't be deceived by the WPCT holding. Mr Patient has had some absolute pups sold to him by assorted snake-oil salesman and the size of his holding has had very little influence on whether the price stabilised in those companies (e.g. UTW).

Having been an FD for one of Mr Woodford's ill-advised investments in tech I would have no doubt that the H&F guy ran rings round him on this one.
How many gap-year backpackers are there wanting to stay in hostels rather than with AirB&B hosts anyway? This business will gradually dwindle until it will likely be taken private again by another PE bloodsucker. Rinse and repeat written all over it.

[pugugly] 26/5/2016 12:29

Could this be yet another Woodford disaster to add to his many recent failures such as RM2 etc ?

[nakedsteve] 26/5/2016 09:52

what's a PE disaster?

[mammyoko] 26/5/2016 09:08

Another PE disaster waiting to happen

[stevenbetts] 26/5/2016 08:23

Not so much today, have been tracking these so could be a good entry point.

[battlebus2] 13/5/2016 11:00

These are having a better day :))

[battlebus2] 07/4/2016 16:04

Continuing the upward trend....

[battlebus2] 05/4/2016 07:18

Fair set of results with improved second half.

[battlebus2] 04/4/2016 16:07

Nibbled a few ahead of results..

[utsushi] 14/3/2016 19:15

Thank you MTIOC.
If the business model is weak, and the valuation is very high then sooner or later a big re-rating downward will occur.
On the other side however, the current price action is ironically bullish short term, Woodford has taken 15%, booking are up 21% and trading is in-line, and leverage can be very good if you have a real growth storey.
I think more information is required and will wait for the next set of results-the stock is thinly traded at this altitude.

[mtioc] 11/3/2016 22:41

Valuation appears very high.

I am not sure about business model. On one hand, if you read Safestay (listed hostel operator) reports, it suggests about 50-60% of their business comes through HW. It is the dominant hostel intermediary.On the other hand, when you read HW reports, it has a battle to drive organic as opposed to paid traffic. Essentially, Google then HW extract a rent from the disparate and fragmented hostel market. My concern is that Google ultimately extracts more than HW.

At the moment, my hunch is that this is a decent but over leveraged and over valued business.

[hibberts] 10/3/2016 16:10

Still under the radar at the mo.

[simon gordon] 19/1/2016 17:06

Forecasts from Davy up on Sharescope:

2016
T/O - 65.84
EPS - 15.9
DPS - 11.93

2017
T/O - 72.71
EPS - 18.14
DPS - 13.59

I presume the above figures are in Sterling.

[mtioc] 03/1/2016 19:38

I am researching HSW and trying to get an EV.

The market cap of the equity is c. £208m.

The pre IPO debt appeared to be c. £300m (£320m of debt and £20m of cash).

This suggests an EV of c. £508m for a business with "adjusted" prior year EBITDA of £27m, which implies a an 18x multiple.

However, the pre IPO debt will have included shareholder debt. The IPO proceeds where c. £125m. Does anyone know how these were applied (i.e. to ordinary equity with no reduction in debt or to loan notes with a reduction in debt)? Even if it was all shareholder debt, the multiple only falls to c. 16x.

[simon gordon] 17/12/2015 07:57

Davy - 15/12/15:

Winning the budget-conscious customer has defined category leaders in the consumer space such as Aldi, Ryanair and Uber. We think Hostelworld plays to this theme. The Millennial generation currently accounts for 90% of bookings; however, we expect the appeal of this category to broaden, driven by mobile technologies and increased marketing intensity. This potential is not captured in the company’s multiples and our £2.85 price target suggests more than 25% upside. We initiate with an ‘Outperform’ rating.

[sphere25] 01/12/2015 16:07

The phones are going to try and find sellers here :-D

Gone nicely vertical!

[simon gordon] 24/11/2015 14:10

What Investment - 24/11/15:

‘We added one new company to the portfolio, buying into Hostelworld Plc on its market flotation. It is the market leader in online youth hostel booking around the world, owning the Hostelworld, Hostelbookers and Hostels.com brands. Our proprietary Grassroots research highlighted the strength of the business franchise, with complementary comments from hostel owners. The business has good opportunities to benefit from a growing hostel market, further penetration of their mobile phone App and various pricing initiatives. The initial valuation is modest for an online market leader with a high expected dividend yield.’

[greasynut] 29/10/2015 11:44

I am interested here because I use the product fairly regularly. It is reliable and trustworthy and widely used amongst hostel providers worldwide. Of course they moan about the commissions, but I would never have heard about their hostels without HSW in many cases.

I spent a couple of hours today reading the prospectus. They are probably not going to make much money this year as they are spending so much on marketing. Acquisition cost per user has about doubled over the last couple of years, but I'm not sure how much value this is delivering. At least on the numbers presented today they have been much more profitable relying more on word of mouth in previous years.

This could well be a short term thing as a pre-IPO tactic or trying to solidify their image in potential users conciousness.

Difficult to value as earnings could go anywhere this year. However, if it is available on market at around £2 next Monday, that would be a PB<2, which must be a reasonable start for such an asset light, debt free business.

[ukinvestor220] 28/10/2015 07:48

Hostelworld Group plc ("Hostelworld", "the Company" or the "Group"), the world's leading hostel-focused online booking platform, announces the successful pricing of its placing (the "Offer") of 71,718,432 ordinary shares (the "Offer Shares") at a price of 185 pence per Share (the "Offer Price"). The Company's issued share capital of 95,570,778 ordinary shares will be admitted to the premium listing segment of the Official List of the Financial Conduct Authority, and the secondary listing segment of the Official List of the Irish Stock Exchange, and to trading on the main market for listed securities of the London Stock Exchange and the Irish Stock Exchange's Main Securities Market ("Admission"). Conditional dealings will commence at 8.00 am on 28 October 2015 under the ticker HSW.