Notwithstanding the proposed tightening of restrictions amid concerns about the Omicron variant of COVID-19, Hostmore has accompanied news of continued buoyant trading with assurances of costs mitigation and further COVID-19 leasehold concessions this year and next. Confirmation of like-for-like EBITDA in October and November was up on 2019, and a positive response to Fridays’ Christmas promotions, reinforce our confidence in our current year forecasts. Meanwhile, expected growth opportunities in a favourable property market are being realised with a likely accelerated rollout (five sites in legal negotiations). We reiterate that an EV/EBITDA multiple of 6x FY22e is a sharp discount to that of its peers (we estimate c 10x average) and ignores Fridays’ strong rejuvenation prospects, backed by our forecast of FY22 financials well ahead of pre-pandemic levels.
