TIDMHSW
RNS Number : 7590H
Hostelworld Group PLC
26 March 2020
LEI: 213800OC94PF2D675H41
26 March 2020
Hostelworld Group plc
("Hostelworld" or the "Company")
Publication of Annual Report for 2019 and Notice of 2020 Annual
General Meeting
Annual Report and Accounts
Hostelworld, the world's leading hostel-focused online booking
platform, is pleased to announce that its Annual Report 2019 has
been posted or is being made available to shareholders today.
Annual General Meeting
The Company confirms that its Annual General Meeting will be
held at 12 noon on 27 April 2020 at the offices of the Company,
Floor 2, One Central Park, Leopardstown, Dublin 18, Ireland. A
Circular containing the Chairman's Letter and Notice of 2020 Annual
General Meeting and Form of Proxy has also been posted or is being
made available to shareholders today. As announced earlier today,
the Directors of Hostelworld have resolved to cancel the final
dividend for the year ended 31 December 2019. Accordingly, the
Directors are not proposing a resolution to approve the final
dividend at the Annual General Meeting.
We are closely monitoring the Coronavirus (COVID-19) situation.
The Board takes its responsibility to safeguard the health of its
shareholders, stakeholders and employees very seriously and so the
holding of the AGM will be kept under review in line with the
Health Service Executive ("HSE") guidance. I n order to safeguard
the well-being of our shareholders and employees, we are
encouraging shareholders to appoint the Chairman as their proxy
(either electronically or by post) with their voting instructions
rather than attend the AGM in person. Further details regarding the
process to vote by proxy are set out in the Circular containing the
Chairman's Letter and Notice of 2020 Annual General Meeting.
Documents available for inspection
The following documents:
-- Annual Report 2019;
-- Circular containing the Chairman's Letter and Notice of 2020 Annual General Meeting;
-- Form of Proxy;
have been submitted to the UK Listing Authority via the National
Storage Mechanism, and the Irish Stock Exchange (trading as
Euronext Dublin), and will shortly be available for inspection at
the following locations:
www.morningstar.co.uk/uk/NSM
and at:
Companies Announcements Office
Euronext Dublin
28 Anglesea Street
Dublin 2
The Annual Report 2019, the Circular containing the Chairman's
Letter and Notice of the 2020 Annual General Meeting and the Form
of Proxy are also available on the Company's website at
www.hostelworldgroup.com .
Regulated Information
The information set out in the Appendix, which is extracted from
the Annual Report 2019, is included for the purposes of complying
with DTR 6.3.5 and its requirements on how to make public annual
financial reports. The information in the Appendix should be read
in conjunction with the Company's preliminary results for the year
ended 31 December 2019 released on 4 March 2020 which can be viewed
at www.hostelworldgroup.com . Together, these constitute the
material required by DTR 6.3.5 to be communicated in unedited full
text through a Regulatory Information Service.
Contacts:
Hostelworld Group plc
TJ Kelly, Chief Financial Officer
John Duggan, Company Secretary
Tel: +353 (0) 1 498 0700
Appendix
Directors' Responsibilities Statement
The Directors are responsible for preparing the Annual Report
and the Financial Statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare Financial
Statements for each financial year. Under that law the Directors
are required to prepare the Group Financial Statements in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union and Article 4 of the IAS
Regulation and have elected to prepare the parent Company Financial
Statements in accordance with FRS 101 Reduced Disclosure Framework
("Relevant Financial Reporting Framework") and applicable law.
Under company law the Directors must not approve the Financial
Statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of the
profit or loss of the Group for that period.
In preparing the parent Company Financial Statements, the
Directors are required to:
> Select suitable accounting policies and then apply them
consistently;
> Make judgments and accounting estimates that are reasonable
and prudent;
>State whether financial reporting standard 101 reduced
disclosures framework has been followed, subject to any material
departures disclosed and explained in the financial statements;
and
> Prepare the Financial Statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
In preparing the Group Financial Statements, International
Accounting Standard 1 requires that Directors:
> Properly select and apply accounting policies;
> Present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
> Provide additional disclosures when compliance with the
specific requirements in IFRSs are insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the Group's financial position and financial
performance; and
> Make an assessment of the Company's ability to continue as
a going concern.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the Financial Statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of Financial Statements may differ
from legislation in other jurisdictions.
Responsibility Statement
We confirm that to the best of our knowledge:
> The Financial Statements, prepared in accordance with the
Relevant Financial Reporting Framework, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company and the undertakings included in the consolidation
taken as a whole;
> The Strategic Report includes a fair review of the
development and performance of the business and the position of the
Company and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face; and
> The Annual Report and Financial Statements, taken as a
whole, are fair, balanced and understandable and provide the
information necessary for shareholders to assess the Company's
position and performance, business model and strategy.
This responsibility statement was approved by the Board of
Directors on 3 March 2020 and is signed on its behalf by:
John Duggan
Company Secretary
3 March 2020
Principal Risks and Uncertainties
The Board takes overall responsibility for identifying the
nature and extent of the risks to be managed by the Group to ensure
the successful delivery of its strategic and business priorities.
The Audit Committee monitors certain risk areas and the internal
control system, as set out in the report on governance.
The Group's risk register identifies key risks including any
emerging risks and monitors progress in managing and mitigating
these risks and is reviewed regularly during the year by the Audit
Committee and at least annually by the Board. There was significant
focus on emerging risks as part of the risk assessment review and
the Board is satisfied that there has been a thorough process
carried out to identify emerging risks and put in place remedial
actions to manage or mitigate those risks. The most material risks
facing the Group including any emerging risks are set out in the
table below, together with comments on how they are managed to
minimise their potential impact. While the table below is not
prioritised nor an exhaustive list of all risks that may impact the
Group, it is the Board's view of the principal and emerging risks
at this point in time. Individually or together, these risks could
affect our ability to operate as planned, and could have a
significant impact on revenue and shareholder returns. Additional
risks and uncertainties, including those that have not been
identified to date or are currently deemed immaterial, may also,
individually or together, have a negative impact on our revenue,
returns, or financial condition.
The Board also considered its obligations in relation to
providing both the annual viability and going concern statements
and it conclusions can be found on page 37 and note 1 to the
Consolidated Financial Statements respectively.
Material risks:
No. Category Description and Impact Management and Mitigation
1. Macroeconomic Revenue is derived from Our business is a global
conditions the one, with a dispersed
wider leisure travel population of users, and
sector. a geographically dispersed
Perceived or actual set of destinations. Whilst
economic market conditions may
conditions, including decline in certain regions,
slowing the globally diversified
or negative economic nature of the business
growth, significantly mitigates
rising unemployment rates, this, with c.50% of destination
weakening markets in Europe and
currencies, higher taxes c.50% in rest of world.
or FX movements may impact
tariffs could impair travel decisions and travel
customer patterns by customers,
spending and adversely but typically there is
affect a degree of counterbalancing
travel demand. In movement e.g. the weakening
addition, of the US dollar against
events beyond our control the euro means fewer US
such travellers visiting the
as unusual or extreme Eurozone, but decreased
weather, marketing costs from US
travel related health denominated suppliers
concerns such as Google.
including pandemics and FX translation risk is
epidemics mitigated through matching
or travel-related foreign currency cash
accidents outflows and foreign currency
can disrupt travel and cash inflows and by minimising
result holdings of excess non-euro
in declines in travel currency above anticipated
demand. outflow requirements.
Because these events or
concerns
are largely unpredictable,
influencing
customer demand and
behaviour,
they can adversely affect
our
business and results of
operations.
Significant movements in
FX
rates can have a dramatic
impact
on travel volumes,
revenues
and travel patterns.
---------------- --------------------------- -----------------------------------------------------------------
2. Impact of The continued threat of Our target 18-34 year
terrorism terrorist old population tend to
threat on attacks in key cities and be both flexible as to
leisure travel on destination, and less
aircraft in flight may concerned about risk-taking
reduce than other sectors in
the appetite of the the leisure travel industry.
leisure The dispersed nature of
traveller to undertake our business also acts
trips as a mitigant, with c.50%
particularly to certain of destination markets
geographies, in Europe and c.50% in
resulting in declining rest of world.
revenues.
Increased incidence of
terrorism
impacts consumer
confidence
and can shift demand away
from
certain destinations.
---------------- --------------------------- -----------------------------------------------------------------
3. Competition The business operates in a We continue to execute
highly on our roadmap for growth
competitive marketplace and capitalise on our
and unique market position,
our relative scale and this involves:
size * Investing in leveraging the Group's unique data
could impact our ability assets allowing it to target and grow the most
to profitable customer segments by optimising its
keep pace with changes in overall marketing investment.
customer
behaviour and technology
change. * Continue to strengthen the Group's core platform in
Failure to continue to order to improve its flexibility and the experience
innovate of our customers while also upgrading our third-party
on our product offering platform connectivity in order to defend our
and competitive position.
to compete effectively in
our
marketplace could have an * Continue to focus on expanding our global footprint,
adverse meeting emerging demand and also strengthening our
effect on our market share overall product offering.
and
the future growth of the
business.
Increased competition from
other
online travel agents
("OTAs")
or from the alternative
accommodation
sector via websites, or a
disruptive
new entrant such as large
hotel
chains into the hostel
segment
or loss of key
accommodation
suppliers could impact
revenue
due to potential loss of
traffic
and/or could increase
traffic
and therefore customer
acquisition
costs. Demand for our
services
could suffer, reducing
revenue
and margins.
---------------- --------------------------- -----------------------------------------------------------------
4. Search Engine A large proportion of The Group invests heavily
Algorithms traffic in recruiting and retaining
to our websites is key personnel with the
generated requisite skills and capabilities
through internet search in paid and non paid search.
engines This in-house expertise
such as Google, from is supplemented by the
non-paid deployment of leading
(organic) searches and technology tools.
through
the purchase of The search marketing team
travel-related works closely with Google
keywords (paid search). We to understand any changes
therefore in functionality to the
rely significantly on adwords platform so that
practices we can avail of any efficiencies
such as Search Engine in our search traffic.
Optimisation The Group participates
("SEO") and Search Engine in alpha and beta feature
Marketing tests that give Hostelworld
("SEM") to improve our first mover advantage
visibility with new functionality
in relevant search that can help drive efficiency.
results.
Search engines, including
Google,
frequently update and
change
the logic that determines
the
placement and display of
results
of a user's search, which
can
negatively impact
placement
of our paid and organic
results
in search results. This
could
result in a decrease in
bookings
and thus revenue. It could
also
result in having to
replace
free traffic with paid
traffic,
which would negatively
impact
margins
---------------- --------------------------- -----------------------------------------------------------------
5. Brand Consumer trust in our We are focussed on investing
brand in our core products,
is essential to ongoing platform and technological
revenue capabilities to support
growth. Negative publicity our brand proposition
around as well as actively managing
our products or services our brand portfolio through
could social media channels.
negatively impact on Our customer service team
traveller strive to ensure that
and accommodation provider customers have a positive
confidence experience at all stages
and result in loss of of interacting with us.
revenue. The Group has a Crisis
Management Policy in place
which includes appropriate
escalation.
---------------- --------------------------- -----------------------------------------------------------------
6. Data Security We capture personal data Hostelworld works closely
from with internal and external
our customers, including audit functions to ensure
credit that our system architectures,
card details and retain work processes and policies
this are in place to provide
on our systems. There is as much protection as
always possible .
a risk of a cyber security Hostelworld continues
related to be fully compliant
attack or disruption, with the guidelines of
including the payment card industry
by criminals, hacktivists (i.e. is "Level 1 PCI
or compliant"), and is in
foreign governments on our the process of implementing
systems its compliance obligations
or those of third party in connection with certain
suppliers. aspects of Payment Services
Cybercrime including Directive 2 ("PSD2") as
unauthorised it relates to customer
access to confidential payment authorisation
information requirements. Specifically,
and systems would have the Group will be required
significant to facilitate the implementation
reputational impact and of certain customer authentication
could security measures by its
result in financial and/or payment processor, issuing
other banks and card schemes.
penalties. We have implemented a
comprehensive privacy
compliance programme to
align with our on-going
obligations under GPDR
and have invested in our
own data protection resources
to monitor compliance.
Our Data Protection Officer
is responsible for informing,
advising and monitoring
compliance on all matters
relating to the protection
of personal data in the
Company. We regularly
review our employee information
security policy and we
continue to invest in
security training for
all staff so that they
remain vigilant and alert
to the possibility of
cybercrime.
For 2020, Hostelworld
plan to migrate parts
of the e-commerce platform
to the Cloud. Whilst risk
is minimal, there still
is risk that security
gaps may manifest during
the migration.
---------------- --------------------------- -----------------------------------------------------------------
7. Regulation The global nature of our We monitor regulatory
business matters in locations in
means we are exposed to which we provide services
issues with a particular focus
regarding competition, on those areas where we
licensing have local operations.
of local accommodation, Suitable experienced resources
language have been engaged to ensure
usage, web-based trading, consumer compliance requirements,
consumer compliance with the Listing
compliance, tax, Rules, the FRC Corporate
intellectual Governance Code and the
property, trademarks, data Market Abuse Regulations.
security Developments to international
and commercial disputes in laws and regulations continue
multiple to be closely monitored
jurisdictions. as Brexit proceeds. The
The recent investigation Group's multinational
by structure with Head Office
UK Competition and Markets in Dublin provides some
Authority natural mitigation to
(CMA) into clarity, the potential impact.
accuracy A detailed analysis of
and presentation of the Group's practices
information by a number of senior
on OTA sites could impact executives in the Group
revenue. 's Legal, Marketing and
Product departments concluded
In addition, as a listed that a limited number
company of amendments to the Group's
on the London and Euronext online sales practices
Irish was required in order
Stock Exchanges, adherence to achieve substantial
to compliance with the CMA's
the Listing Rules is written guidelines.
required.
Compliance with new
regulations
can mean incurring
unforeseen
costs, and non-compliance
could
result in penalties and
reputational
damage.
Uncertainty remains as to
the
impact of Brexit on UK and
international
laws and regulations
including
matters such as travel
visas
or work visas for our UK
staff.
---------------- --------------------------- -----------------------------------------------------------------
8. Tax The taxation of e-commerce In collaboration with
businesses our tax advisers, a large
is constantly being professional services
evaluated firm, we assess possible
and developed by tax tax impacts in the jurisdictions
authorities in which we operate to
around the world. The ensure our tax obligations
taxation are aligned to the operational
of online transactions in nature of our business.
the
travel space remains
unsettled.
Due to the global nature
of
our business, tax
authorities
in other jurisdictions may
consider
that taxes are due in
their
jurisdiction, for example
because
the customer is resident
in
that jurisdiction or the
travel
service is deemed to be
supplied
in such jurisdiction. If
those
tax authorities take a
different
view than the Group as to
the
basis on which the Group
is
subject to tax, it could
result
in the Group having to
account
for tax that it currently
does
not collect or pay, which
could
have a material adverse
effect
on the Group's financial
condition
and results of operation
if
it could not reclaim taxes
already
accounted for in the
jurisdictions
the Group considers
relevant.
Changes to tax legislation
or
the interpretation of tax
legislation
or changes to tax laws
based
on recommendations made by
the
OECD in relation to its
Action
Plan on Base Erosion and
Profits
Shifting ("BEPS") or
national
governments may result in
additional
material tax being
suffered
by the Group or additional
reporting
and disclosure
obligations.
---------------- --------------------------- -----------------------------------------------------------------
9. Business Failure in our IT systems As an e-commerce organisation,
Continuity or the Group's business continuity
those on which we rely plan focusses on the continued
such operation of consumer
as third party hosted facing products and related
services services to ensure our
could disrupt availability e-commerce trading systems
of can continue to process
our booking engines and bookings. Our fully distributed
payments and redundant architecture
platforms, or availability across two data centres
of based in two different
administrative services at countries supports this
our approach. The Group has
office locations, with an worked with external advisers
adverse to produce robust documented
impact to our customer business continuity and
service. disaster recovery capabilities.
We have also extended
our eCommerce Business
Continuity Plans ("BCP")
to include our corporate
offices .
---------------- --------------------------- -----------------------------------------------------------------
10. People The Group is dependent on The Group has developed
ability stronger recruitment processes
to attract, retain and supported by effective
develop HR policies and procedures.
creative, committed and The Group has an increased
skilled focused on understanding
employees so as to achieve the drivers of employee
its engagement, this has informed
strategic objectives. the development of its
Employee Value Proposition,
aimed at attracting the
right calibre of talent,
driving levels of motivation,
retention and alignment
and commitment to the
Group's strategic goals.
The Group also operates
from five global offices,
which provides flexibility
for location of recruitment
of key talent, thereby
opening up a larger pool
of talent for selection.
A non-executive director
has been designated to
fulfil the workforce engagement
role as set out in the
2018 UK Corporate Governance
Code.
---------------- --------------------------- -----------------------------------------------------------------
11. Brexit The Group is exposed to The Group is a global
Brexit-related business and continues
risks and uncertainties in to grow its international
relation footprint and presence
to its continued impact on across its key markets.
global Through continued international
markets and currency expansion and diversification
exchange the Group will seek to
rate fluctuations. The naturally mitigate the
uncertainties impacts of Brexit. However,
in relation to the the Group will continue
movement to assess the impacts
of people may result in of Brexit and implement
the any necessary remediation
reduction of bookings steps to mitigate its
particularly impact on the Group.
into and from the UK
travel
market and from UK
nationals
which could impact on
Group
revenue. In the year ended
31
December 2019, the UK as a
destination
represented 6% of total
Group
bookings (2018: 6%) and
14%
of Group bookings were
from
UK nationals (2018: 14%).
Overall a decline in
macroeconomic
conditions in the UK could
negatively
impact consumer confidence
and
reduce spending in all
areas
including the wider
leisure
travel sector.
---------------- --------------------------- -----------------------------------------------------------------
Emerging risks:
No. Category Description and Impact Management and Mitigation
1. Payment Reliance on single payments Payments is a part of
Processor processor (Worldpay) for Hostelworld the product roadmap. The
and exposure to their downtime, Group is investing in
service etc. a payment team to enhance
the functionality in this
space.
---- --------------- -------------------------------------- ----------------------------------
2. Climate Change Changing consumer demand as Climate change issues
a result of increased awareness may impact travel decisions
of issues related to climate and travel patterns by
change adversely impacting financial customers, but is mitigated
performance. to the extent that our
business is a global one,
with a dispersed population
of users, and a geographically
dispersed set of destinations.
---- --------------- -------------------------------------- ----------------------------------
3. Mergers and Anticipated benefits of mergers Suitable experienced resources
Acquisition and acquisitions may not materialise have been engaged internally
due to inaccurate evaluation and external professional
of business targets, over estimation advisers are engaged to
of synergies or poor management ensure expertise in identifying,
and or integration of acquisition evaluating and conducting
target. due diligence and subsequent
transaction execution
and integration. In addition
Board approval is required
for all transactions and
regular updates are presented
to the Board on potential
targets, including strategic
evaluations of any proposed
significant investments.
---- --------------- -------------------------------------- ----------------------------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
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END
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