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Hostel accommodation provider Hostelworld slashed its dividend after reporting a fall in profit as a jump in cancellations weighed. The company also warned on profit as trading in the current year had been hurt by the impact of the coronavirus outbreak.
"Trading since late-January had been challenged by the outbreak of the COVID-19 virus which is having a significant impact on global travel demand" [...] "if near term trends were to persist to the end of March we estimate the impact to earnings (EBITDA) to be in the range €3m to €4m for the first quarter of 2020," the company said.
The sombre update came as profit were impacted by a rise in cancellations and costs.
For 2019, pre-tax profit more than halved to €3bn from €6.6bn as revenue fell 2% to €80.7m on-year.
Marketing costs increased to 41% of net revenue, up from 37%, driven by the full year impact of cancellations in 2019, CPC inflation and increased paid channel investment in the second half of 2019, the company said.
The final dividend proposed was slashed to 2.1 euro cent per share from 9.0 euro cent last year, taking the full year dividend to 6.3 euro cent per share, down from 13.8 euro cent per share.
At 8:26am: (LON:HSW) Hostelworld Group Plc share price was -15.85p at 89.15p