Vox Markets Logo

Safestay reports 2019 revenue boost as it plans to restart business

09:19, 29th May 2020
Francesca Morgan
RNS Newswire
TwitterFacebookLinkedIn

Safestay (AIM: SSTY)  FOLLOW has described 2019 as “a transformational year” for the group as it published final results for the 12 months to 31 December 2019. 
 
The group outlined that its strategy for 2019 was largely focused on expanding its network, improving its underlying profitability and investing into its premium hostel positioning.  
 
The hostel operator reported a total revenue increase of 26% to £18.4m against £14.6m in 2018 with like for like sales up 7% which it said illustrated a successful performance. 
 
Specifically, 49% or £9m of net revenue came from properties outside the UK, a 43% increase from £6.2 million in 2018 which reflects the opening of several new sites across Europe. 
 
Adjusted EBITDA for the year to December 2019 was £6.1m and £3.8m pre-IFRS 16 adjustment from £3.4m in 2018, while pre-tax losses remained in line at £0.6m.  
 
A 50% expansion in bookings made via the Safestay website has largely driven the increase the increase in revenue with losses almost halved for the period on a per share basis from 2.56p in 2018 to 1.48p in 2019. 
 
Shares in Safestay opened flat at 15p on Friday morning. 

SSTY price chart

 Post period end, the Company closed all of its hostels from 1 April due to the Covid-19 pandemic and is currently tly focussed on its preparation for a staggered reopening plan over the course of 2020. 
 
The company said it had extended its debt facility with HSBC from £17.9m to £22.9m for a new five-year term until January 2025 and agreed a further £5m overdraft with HSBC. 
 
The extended finance facilities and available government reliefs means the business is now “well placed to weather the current crisis”. 
 
Chairman of the group, Larry Lipman, said the company would open hostels 'over the course of 2020, as and when we believe they can be profitable'. 
 
“Our focus is on ensuring the safety of our guests, initially targeting the domestic markets in each country, and then looking to gradually return to normal trading patterns,” he commented. 
 
“Navigating the re-engagement of the business will require us to be highly flexible as we test and match demand in individual markets, however, we are confident of being able to do this and making sure that we balance increased operational cost with increased income,” he said. 
 
The company has said it will not provide guidance on its trading performance for 2020 as due to many unknown factors, not least the point at which it will be allowed to re-open its sites. 
 
Follow News & Updates from Safestay here: FOLLOW

 

TwitterFacebookLinkedIn

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

Recent Articles
Watchlist