Hostmore - Ready to party

Hostmore has bucked concerns about the impact of the Omicron variant with its expectation of FY21 pre-IFRS 16 EBITDA 'well ahead of £18.6m market consensus'. While buoyancy in October and November was the driver, December proved resilient with cancellations owing to COVID-19 concerns more than made up by walk-ins and new reservations. We are therefore raising our FY21 forecast of EBITDA (our key metric) by £2m and revenue by £10m. For the current year the newly confirmed imminent easing of COVID-19 restrictions should spur the benefit of Fridays' wide-ranging brand initiatives and growth opportunities in a favourable property market. Hostmore's meagre rating of under 6x FY22e EV/EBITDA belies such positives and is low against an average of c 10x for its peers.

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