Hostelworld Group

Website: Hostelworld Group
Index: FTSE Small Cap
EPIC: HSW
Supersector: Travel and Leisure
Sector: Travel and Leisure
Subsector: Travel and Tourism
Market Cap: £131.91M
Payout Frequency: -

Hostelworld Group Dividend Analysis and Summary

Declared Dividend and Key Dates

Total FY2025 Dividend and Policy

Total FY2025 dividend: 2.40 € cent per share (Interim 0.82 € cent paid 19 Sept 2025 + Final 1.58 € cent)
Policy: Progressive dividend targeting 20%–40% of adjusted profit after tax
Cash cost of FY2025 dividend: ~€3.0m
FY2025 adjusted PAT: €15.0m ? payout ~20% of adjusted PAT
Coverage: Adjusted EPS 11.91c vs DPS 2.40c (~5.0x cover); Basic EPS 5.63c (~2.3x cover)

Indicative Yield

Using the disclosed year-end share price (~€1.43): FY2025 DPS 2.40c implies a yield of ~1.7%. Actual yield will vary with the prevailing share price.

Dividend Sustainability and Growth Outlook

Profitability: Adjusted EBITDA €19.9m (21% margin); adjusted PAT €15.0m supports the dividend at the lower end of the 20–40% range.
Cash and leverage: Year-end cash €12.2m, net debt €1.6m after funding the OccasionGenius acquisition with a €10.3m term loan; leverage remains low against EBITDA.
Cash generation: FY2025 cash conversion fell to 51% (vs 66%), but management targets ~70% adjusted FCF conversion in 2026; if delivered, headroom for progressive dividends improves.
Coverage headroom: Current payout (~20%) leaves scope to grow dividends alongside earnings within the stated 20–40% policy.
Capital returns balance: Ongoing buyback (£5m programme, largely completed by Q1 2026) complements cash dividends; buyback cancellations modestly enhance per-share metrics without stressing coverage.

Structural and Capital Allocation Developments Relevant to Dividends

M&A: Acquisition of OccasionGenius Inc. for $12m, funded by a €10.3m 3-year AIB term loan (EURIBOR + 2.2%). Covenants (Cashflow Cover =1.2x; Adjusted Leverage =3.0x) begin testing June 2026; current leverage appears conservative.
Share buyback: £5m programme; 3.06m shares repurchased and cancelled by YE 2025, with substantial completion by end Q1 2026. Reduces share count and supports DPS progression over time.
Dividend policy: Progressive policy reinstated in 2025 with clear payout framework (20–40% of adjusted PAT), enhancing visibility for income investors.

Risks and Flags to Dividend Stability

Trading sensitivity: Exposure to global travel demand; management notes potential impacts from Middle East tensions, mixed regional booking trends, and airline pricing.
Marketing inflation: Direct marketing costs at 48% of generated revenue FY2025 (improved to 45% in H2); sustained efficiency gains are important to protect margins and cash.
Cash obligations: Ongoing repayments of €3.5m warehoused payroll taxes through April 2027; new bank debt introduces covenant oversight (first test June 2026). While headroom appears ample, breaches could constrain distributions.
Execution and integration: Delivery risk around integrating OccasionGenius and scaling new revenue streams (Social Passes, 3PI) that underpin the growth/FCF outlook.
Currency: Dividends paid in EUR; FX exposure for GBP-based investors.

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency
09/05/2019	05/06/2019	Final	9.00¢	USX
29/08/2019	20/09/2019	Interim	4.20¢	USX

Total (Annual Dividends Per Share): 9.72p (Using exchange rate on 30/04/2026 $ = £0.73627)

Dividend Yield = Annual Dividends Per Share (9.72p) ÷ Share Price (107p) = 9.08%

Ex Dividend Date	Payment Date	Type	Amount	Currency
16/04/2026	12/05/2026	Final	1.58¢	EUX
28/08/2025	19/09/2025	Interim	0.82¢	EUX
16/04/2020	08/05/2020	Final	2.10¢	USX
29/08/2019	20/09/2019	Interim	4.20¢	USX
09/05/2019	05/06/2019	Final	9.00¢	USX
30/08/2018	21/09/2018	Interim	4.80¢	USX
10/05/2018	14/06/2018	Final	12.00¢	USX
31/08/2017	22/09/2017	Interim	5.10¢	USX
27/04/2017	06/06/2017	Special	10.50¢	USX
27/04/2017	06/06/2017	Final	10.40¢	USX
01/09/2016	27/09/2016	Interim	4.80¢	USX
28/04/2016	31/05/2016	Final	2.75¢	USX

Year	Interim	Final	Special	Currency	Total	Change
2020		2.100		USX	2.100	-84.090
2019	4.200	9.000		USX	13.200	-21.420
2018	4.800	12.000		USX	16.800	-35.380
2017	5.100	10.400	10.500	USX	26.000	244.370
2016	4.800	2.750		USX	7.550

Number of Shares:

Payment	Paid	Amount
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