Online travel agent (OTA) Hostelworld is focused on helping travellers book hostel accommodation. Hostelworld’s saw bookings increase by 6% in 2017 with this driven by a strong performance in the first half of the year. The backdrop in prior years has been mixed with bookings down 1% in 2016 and up by 1% in 2015. Europe makes up half of Hostelworld’s bookings and in 2016 was impacted by a number of terrorist events. Travel is still a growth area and hostel accommodation offers a uniquely social travel experience. Modern hostels typically include communal lounges and bars while some even feature outdoor swimming pools. The modern, social hostel experience: some even have pools Source: Hostelworld Another attraction of hostel accommodation is that room sharing makes it relatively cheap. Sector bed capacity increased 3% in the 12 months to 30 June 2017 and a number of large hospitality groups are investing in hostel expansion. Against this backdrop the future appears to be bright for online travel agent Hostelworld. The company makes hostel booking relatively easy but does charge an additional fee versus booking directly with a hostel. Hostelworld’s business model: as easy as 1, 2, 3 Source: Hostelworld Hostelworld is, however, a relative minnow in the online travel agent (OTA) with a market value of circa £400m. The US group Booking Holdings has a market value of £75bn and has a range of heavily marketed brands. A key issue for Hostelworld investors, therefore, is whether it can successfully defend its niche. New features to improve loyalty include an online Hostel Noticeboard (launched December 2016) and a language translation service. Hostelworld’s mobile application (app) was used in 29% of bookings in the first half of 2017. This compares to only 17% in the first half of 2015 and suggests that customer loyalty is improving. Hostelworld’s customers go mobile Source: Hostelworld If Hostelworld continues to grow in popularity then profitability should also improve. This is because bookings from paid channels, such as search engines, will decline as more users go directly to Hostelworld. Marketing investment as a percentage of revenue was 50% in the first half of 2015 but had fallen to 41% in the first half of 2017. This trend has a significant impact on the bottom line with marketing the largest single cost for Hostelworld. Looking at the numbers and in the first half of 2017 the group generated €46.6m net revenue and adjusted EBITDA came in at €12.9m. This compares to net revenue of €40.2m the first half of 2016 and adjusted EBITDA of €10.1m. Hostelworld in the first half of fiscal 2017 Source: Hostelworld Hostelworld will report results for 2017 on 10 April and may announce a special dividend. The forecast dividend yield for 2017 is 3.4% (excluding special dividends) and cash on the balance sheet was €17.7m at mid-2017. The consensus forecast P/E for 2018 is now 21.7X with share price appreciation having increased the multiple. Investors have brushed aside issues that hit trading in 2016 and the weak momentum seen in the second half of 2017. Hostelworld’s financial backdrop: growth is expected to continue Source: SharePad If Hostelworld can defend its niche then it is well placed to benefit from long-term growth in the travel sector. The increase in mobile application (app) usage suggests that the company has a reasonable chance of seeing off competitors. Risks include the possibility that a larger rival will develop a branded hostel booking service. Travellers could also increasingly book hostels directly, to save money, or move to alternative booking platforms such as Booking.com. Disclosure: The writer holds shares in Hostelworld.

Zara owner Inditex (BME:ITX) reported a 41 percent jump in online sales over the course of 2017, after a year of “solid growth”. It was the first time the group had reported its online sales, which were a key driver of the group’s performance for the year, which saw net profits rise 7 percent to €3.37 billion. Like-for-like sales, which excludes new store openings, rose 5 percent, with net sales up 9 percent. The group reported revenues of €25.34 billion for the full year. Pablo Isla, Inditex’s CEO, saifd the group had seen “solid growth” throughout the year, with recent investment in technology and logistics leaving the company well placed for continued progress. During the year the company spent €1.8 billion, spent largely on integrating the online and physical businesses. Shares in Inditex, who also own Massimo Dutti, Bershka and Pull & Bear, are currently down 2.27 percent at 23.71 (1017GMT).

Car retailer Marshall Motor Holdings said profits doubled over the course of 2017, pleasing investors with a 16 percent dividend increase. The groups’s strong results were largely due to the sale of its leasing business as well as a hike in revenue, despite recording lower like-for-like new and used car unit sales. Pre-tax profit rose to £53.1 million, up from £22.2 million the year before, with revenue rising by 19.5 percent to hit £2.27 billion. Underlying pre-tax profit increased by 14.4 percent as gross profit margin expanded by eight basis points to 11.7 percent. The company declared a dividend for the full year of 6.4p per share, up 16.4 percent on-year. “Despite the more challenging market backdrop, the board is pleased to announce another record financial performance which was ahead of our previously upgraded expectations,’ chief executive Daksh Gupta said. “During 2017 we took a number steps, including the strategic disposal of Marshall Leasing, to prepare the group for the future. “We are now focused exclusively on our motor retail business and with a significantly strengthened balance sheet remain ideally positioned to exploit future opportunities.” The company warned on the state of the car market going forward, with Gupta drawing on the latest forecast from the Society of Motor Manufacturers and Traders UK which warned of a decline of 5.6 percent in the new vehicle market for 2018. However, Gupta said trading performance in the current financial year to date is “in line with our expectations and our outlook for the full year remains unchanged.” Shares in Marshall Motors (LON:MMH) are currently trading up 3.89 percent at 173.50 (0944GMT).

Construction giant Balfour Beatty (LON:BBY) saw shares rise in early trading on Wednesday after reporting a jump in profits in 2017. The group, who are currently running the London Crossrail project, saw underlying operating profit more than double to £19 million. Pre-tax profit hit £165 million, up from £62 million in 2016. The group’s order book fell during the year, however, down 8 percent to £11.4 billion as the group made a concerted effort to take on projects aligned with their capabilities. Its troubled UK construction division moved into profit during the year, reporting a £16 million profit compared to a loss of £65 million the previous year. Leo Quinn, group Chief Executive, said: “These results clearly demonstrate that our Build to Last programme is transforming Balfour Beatty. The Group has been repositioned to drive sustainable growth in profits, underpinned by a strong balance sheet. It has the right culture and capabilities to capitalise on the rising tide of infrastructure spend in our chosen markets. “As a result of Build to Last, and the governance and controls now in place, we remain on track to achieve industry-standard margins in the second half of 2018. In the medium term, we are building a Group capable of delivering market-leading performance.” Shares in Balfour Beatty (LON:BBY) are currently trading up 2.71 percent at 282.91 (0903GMT).

Security and surveillance systems developer Petards Group (LON:PEG) recorded record profits in 2017, with revenue recording an increase for the fourth year in a row to hit £15.6 million. The group posted a 30 percent rise in annual profit after enjoying “another good year” in 2017. Pre-tax profit rose to £1.21 million, with revenue increased by 2 percent to £15.6 million. Petards invested heavily in its eyeTrain hardware and software over the course of the year, with gross margins expanded to 38.6 percent, from 36.3 percent. “The group’s order book at 31 December 2017 was over £18m, of which £12m is expected to be taken to revenue during 2018,” chairman Raschid Abdullah said. “We are also engaged in on-going discussions for new projects across all areas of our business, many of which our customers have themselves already been awarded. “This coupled with a strong balance sheet provides the board with confidence for the group’s prospects in 2018 and beyond.” Shares sunk in early trading, however, and are currently down 2.04 percent at 23.02 (0841GMT).

Wealth management and insurance company Prudential (LON:PRU) announced a 45 percent increase in profit over the course of 2017, alongside the announcement that it would demerge its UK and European investment management businesses. The company also announced that it would demerge its UK and European investment management business, splitting them in two separately-listed companies. The shareholders would hold interests in both Prudential and the new European business, M&G Prudential. The group’s results were buoyed by “positive inflows” into its managed fund products and growth in Asia. Pre-tax profit rose to £3.30 billion, up from £2.28 billion a year earlier, with operating profit increasing by 10 percent to £4.70 billion. “Our clear, consistent strategy, high-quality products and constantly improving capabilities have enabled us to deliver excellent progress across the group, led by double-digit growth in our Asia business,” chief executive Mike Wells said. “We have also achieved all of our 2017 objectives, which we set in December 2013. This represents the third set of objectives successfully achieved within the last 10 years.” Prudential shares are currently up 4.66 percent at 1910.50 (0831GMT).

Shares in Morrisons (LON:MRW) rose in early trading on Wednesday, after the company declared a special dividend as their turnaround strategy begins to take effect. The group declared a special dividend of 4p per share and a final dividend of 4.43 pence, a 12.2 percent rise in the total dividend for the year. Profits also rose during the period, with pre-tax profit up 16.9 percent to £380 million and revenue up 5.8 percent to £17.3 billion. Net debt continued to fall, offset by a 2.8 percent rise in like-for-like sales excluding fuel, and the group confirmed that it was on course for annualised wholesale-supply sales to all partners to exceed £700 million by the end of 2018, and to be more than £1bn ‘in due course’. “Morrisons is now entering its third consecutive year of growth, which is a credit to the whole team,” chairman Andrew Higginson said. “We will continue to prioritise consistent, meaningful and sustainable growth, which I am confident we are well placed to keep delivering.” Morrisons were forced to implement a turnaround plan after a spate of profit warnings back in 2014. The most recent sets of results seem to show a revival in the group’s business, as the supermarket sector overall starts to fare better.

Copper miner Antofagasta (LON:ANTO) reported preliminary results on Tuesday which pointed to a year of recovery, helped by rising copper prices. The miner with operations predominantly in Chile enjoyed a 59% increase in EBITDA to $2,586. A 31% rise in copper prices helped boost earnings as production for the period was mildly down 0.7% on the previous year. The higher copper price also assisted stronger cashflow which allowed the group to reduce net debt to just $42 million. Copper prices have increased dramatically over the past year helped the mining sector to recoup much of the losses suffered during fears of a Chinese hard landing. Antofagasta CEO commented on the results: “We have continued to invest through the cycle while maintaining our focus on cost discipline and operating performance. As a result, as copper prices rose in 2017 Antofagasta had another successful year completing the development of Encuentro Oxides, meeting our safety target of zero fatalities and achieving both our production and cost guidance. “EBITDA increased by 59% to $2.6 billion with operating cash flow rising to $2.5 billion. Testament to the improved copper market and our continuing cost management programme, our EBITDA margin rose to 54% – the highest level since 2012 when the copper price was 30% higher. As a result of this performance the Board has recommended a final dividend of 40.6 cents per share which, combined with the interim dividend, brings the total dividend for the year to 50.9 cents per share, an increase of 177% on 2016, and represents a cash payout of 67% of earnings. “Our priorities for 2018 are continued capital discipline and the next phase of our growth – notably the review and expected approval of the Los Pelambres Incremental Expansion project and progressing expansion plans at Centinela.”