DAVY VIEW

Hostelworld (HSW) released its interim results this morning. It had already updated on the key line items on July 10th, so focus quickly shifts to recent trading and outlook. Trading in H1 was behind our expectations; however, importantly, trends improved through the year with growth returning in June and continued positive momentum in July. HSW reiterated that FY guidance is in line with expectations (and our forecasts) with mid-single-digit revenue growth and an aEBITDA margin of 20%. HSW will need a good second half to meet guidance, but it is starting to see the benefits of increased commission rates from its Elevate marketplace tool (+15% year-on-year). This is one of a number of strategic initiatives outlined at its recent Capital Markets Day (CMD) to drive growth. Further evidence of the benefit of these initiatives will be key to driving a re-rating.