16th Apr 2014 08:54
LONDON (Alliance News) - Portable hotel accommodation and services provider Snoozebox Holdings PLC Wednesday saw its shares tumble after it said its losses widened in the full-year, during a turbulent period which saw changes in its management team.
Snoozebox, which converts old shipping containers into portable hotels and provides accommodation at events, posted pretax losses of GBP9.4 million for the year to December 31, 2013, compared with a profit GBP4.2 million, despite revenue rising to GBP6.7 million from GBP3.8 million a year earlier.
It said although it has achieved repeat bookings, the operating costs and deployment time for short-term events are too high and have results in the losses during the period.
"Current expectations are that the next generation portable hotel will reduce deployment costs by an order of magnitude and will increase available room nights substantially, delivering the ability to deploy at more events," it said.
Revenue, however, was boosted by strong sales for its events and hotels business. The events segment, which includes all activities providing short-term hotel accommodation at popular events and festivals, saw revenue rise to GBP5.6 million from GBP3.8 million buoyed by growth across all its sectors, motor sport, leisure and entertainment and event support services.
Average room rates grew to over GBP350 compared with GBP127, while occupancy rates of 80% to 100% were achieved during events in the second-half, which resulted in an improvement in gross margins to 73% from 54% in 2012.
The hotels business - which includes all activities in relation to the provision of long-term managed hotel solutions - recorded revenue of GBP1.1 million compared with nil a year earlier.
Snoozebox said it saw the emergence of demand for longer term hotel deployments and it deployed and operated hotels at Thorpe Park Silverstone Ciricuit and Nigg Energy park
The firm said it is continuing to develop its temporary housing accommodation and healthcare offerings and has recently entered into an agreement with Compass Group PLC to deliver a portable medical hotel model to the market.
Snoozebox has been struggling for some time and following an audit of its 2012 figures - which saw its pretax loss widen to GBP4.4 million from GBP1.3 million the previous year - as the company announced worse-than-expected results and the departures of its Chief Executive and Finance Director.
The firm subsequently conducted a review and identified the need for funding which led to a fundraising of GBP9.4 million in June as well as the need to develop new units capable of more rapid and lower cost deployment.
Chairman David Morrision admitted the company had experience some "turbulence" after it promoted Chief Financial Officer Lorcán Ó Murchú to Chief Executive. Former CEO Robert Breare stepped down from the position last year to concentrate on sales and business development.
However Morrison noted that the "delivery of the events programme went well and that, consistently, the feedback from our guests was positive and their response is now manifesting itself in repeat bookings for the events to which we have committed for the current year."
Looking ahead, Snoozebox said 2014 will be a "transitional" year as it "services the demand for longer term deployments with the existing room stock and introduces the Next Generation Portable Hotel to service the events market."
Despite raising GBP9.4 million in June the company Wednesday said it plans to raise up to GBP11 million by way of a firm placing and up to GBP1 million in an additional placing at a price of 10 pence per placing share. Panmure Gordon will act as bookrunners.
The stock was trading at 9.67 pence Wednesday morning, down 1.83 pence or 15.89% making it the third biggest faller on AIM.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Snoozebox Holdings