| Hostelworld owner made €18.3m profit |
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| Sunday, 19 October 2008 | |
Sunday Business Post | Irish Business NewsHostelworld owner made €18.3m profit Sunday, October 19, 2008 By Gavin Daly Web Reservations International (WRI), owner of the Hostelworld.com site, made a ...www.sbpost.ie/post/pages/p/story.aspx-qqqt=IRELAND-qqqm=news-qqqid= Sunday, October 19, 2008 Web Reservations International (WRI), owner of the Hostelworld.com site, made a pre-tax profit of €18.3 million last year, as almost 83 million people visited its network of websites to book hostel accommodation around the world. The Dublin firm had revenues of €34 million in 2007,up from €27.2 million in 2006, when profits were €16 million. The company, which was founded in 1999 by Ray Nolan and Tom Kennedy, had planned to take a stock market listing earlier this year, but decided not to go ahead with the flotation. Last year, WRI’s profits were hit by a €1.25million deduction for ‘‘costs related to a proposed financing transaction and costs to reorganise the group’s legal structure’’. It also had ‘‘financial expenses’’ of €1.7 million on loans and overdrafts. Feargal Mooney, who took over from Nolan as WRI chief executive last February, said the company was enjoying strong growth, both in its traditional business and its ‘‘startup’’ Boo.com website, which it launched last year. That site combines travel information and reviews with social networking, and had ‘‘great potential’’, he said. The 2007 figures exclude the performance from WRI’s loss-making hotel booking business, WorldRes, which was made a separate company last year as it prepared to go public. If ‘‘discontinued operations’’ are included, WRI had €36.3 million in revenues last year and made a pre-tax profit of €8 million. WRI’s 2007 ac count s showed that the WorldRes business was sold on December 31 for €1 to a company controlled by Nolan. WRI’s shareholders can subscribe for shares in that company and, if it is sold on for more than €1 in the future, WRI and its shareholders will share in the proceeds. Mooney said the firm had decided to spin out the WorldRes business because it was focusing on selling hotel accommodation through the Boo.com site. He said that WRI had rebranded its central Hostelworld.com site and recently relaunched its Hostels.com business. While WRI has traditionally made its money from handling online hostel bookings, Mooney said it was broadening its business to other travel services and online advertising. The firm recently formed a partnership with Ryanair to launch a site called Ryanairvillas.com, allowing villa owners to lease their properties. WRI has about 90 staff, with overseas bases in Shanghai and Sydney. As well as Mooney and the co-founders, its directors include chairman Fintan Drury, former Aer Lingus chief financial officer Brian Dunne and Mark Opzoomer, the former managing director of Yahoo! in Europe. The company was valued at about €400 million in 2004 when it raised external funding from Summit Partners, a US venture capital company. However, it bought back some of Summit Partners’ shares in 2006 as part of a corporate restructuring. The 2007 accounts show the firm paid €35 million to Summit Partners for those shares. As part of that process, a total of €12.2 million was paid to trusts owned by Nolan, Kennedy and fellow director Paddy Holahan, and a further €1.5 million was paid to WRI directors and key management. |
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