Given the growth opportunities the Hostelworld Board wishes to pursue, and the resources and investment required to deliver against a "Roadmap for Growth" strategy, the Board have determined that a change to capital allocation policy is required. The Hostelworld Group will require flexibility on the best use of shareholders' funds to optimise shareholder return and to deliver against the long-term interests of the business and shareholders.
As a consequence, the Board have taken the decision to reduce the level of annual dividend to a range of 20% to 40% of the Group's Adjusted Profit After Tax. The Board is recommending a full year final dividend of 2.1 euro cent per share which together with the interim dividend of 4.2 euro cent per share brings the total dividend for 2019 to 6.3 euro cent per share. This equates to a distribution of 41% of the Adjusted Profit After Taxation in respect of 2019 and €62.7m having been returned to shareholders since IPO in November 2015.
Other financial highlights include:
While full year net revenue of €80.7m declined 2% (2018: -5%), H2 net revenue of €41.8m increased 6% (H1 2019: -9%)
Full year Hostelworld brand net bookings declined by 5% (2018: -1%), with a return to net bookings volume growth during H2 2019 -1% (H1 2019: -8%), driven by Q4 2019 +1%
Average Net Booking Value of ("ABV") €11.97 (2018: €11.64), a 3% increase over 2018
Cancellations of €9.3m (2018: €5.5m) in-line with expectations, year-over-year increase reflects full year impact of July 2018 global roll-out
Operating costs were flat compared to 2018, (excluding impact of exceptional costs and IFRS 16), despite our investment in "Roadmap for Growth" initiatives and having delivered a return to growth in the latter part of H2 2019
Marketing costs increased to 41% of net revenue (excluding deferred revenue), (2018: 37%) driven by the full year impact of cancellations in 2019, CPC inflation and increased paid channel investment in H2 2019
Adjusted EBITDA of €20.5m (2018: €22.5m) in-line with market expectations, down 9% on 2018 and 11% on a constant currency basis
Return on Capital Employed of 11% (2018: 13%)
Adjusted Earnings per Share of 15.5 € cent (2018: 18.2 € cent)
Adjusted cash conversion of 53% (2018: 101%) and free cash flow of €10.9m (2018: €22.8m), impacted by one-off timing of cash receipts and increased investment spend. Adjusting for these one-off items, and the impact of the deferral of the revenue related to free cancellation bookings, normalised cash of 64% (2018: 90%) and a total distribution of 41% of Adjusted PAT.