25th Sep 2019 10:09
(Alliance News) - Safestay PLC on Wednesday reported a first-half revenue increase and said it forecasts full-year growth after strong summer trading.
Shares in the hostel operator were 11% higher at 35.00 pence each on Wednesday morning.
In the six months to June 30, revenue r0se by 24% to GBP8.1 million from GBP6.5 million in the first half of 2018, but the firm recorded a widened pretax loss to GBP904,000 from GBP790,000. Finance costs rose by 83% to GBP1.5 million and depreciation & amortisation expenses more than doubled to GBP1.6 million from GBP777,000.
Safestay also reported a 6.0% year-on-year rise in average bed rate, to GBP19.50 from GBP18.40. The company said the average bed rate excludes properties in Vienna and Brussels as they are currently operating as hotels and so have higher fees.
The majority of Safestay's revenue was generated in the UK, which recorded a 7.7% rise to GBP4.2 million from GBP3.9 million. However, its Other Europe segment is catching up; revenue there rose by 50% to GBP3.8 million from GBP2.6 million.
During the period, Safestay acquired a freehold 161-bed site in Pisa, Italy for GBP3.0 million. It also opened a new restaurant at a hostel in central Barcelona and extending a property in the Elephant & Castle area of south London.
Earlier in September Safestay announced it had acquired a 52-bedroom hotel in Glasgow for GBP3.2 million. It also signed a joint venture with EOS Sicav PLC to develop a 660-bed hostel in the Italian city of Venice. The company will have a 50% stake in the Venice venture.
Safestay added that it has experienced "positive summer trading" and forecasts full-year revenue to exceed GBP17.0 million. This would represent a 16% increase on 2018's revenue of GBP14.6 million.
Chair Larry Lipman said: "2019 has to date been good for trading seen in the 24% increase in sales for the first half and for expansion with the acquisition of three new hostels which once completed will add 1,000 beds, increasing the portfolio by nearly one third. From a trading perspective, we have yet to see the full benefit from our acquisitions in Vienna, Brussels, Pisa and more recently Glasgow together with the medium-term potential of Paris and Venice."
"Safestay is therefore in an enviable position to continue its positive growth trajectory, building a portfolio of well positioned hostels under a premium, contemporary hostel brand."
By Eric Cunha; [email protected]
Copyright 2019 Alliance News Limited. All Rights Reserved.
Related Shares:
SFE.L