Safestay PLC – Final Results

Safestay PLC – Final Results

Safestay (AIM: SSTY), the owner and operator of a new brand of contemporary hostel, release final results for the year Ended 31 December 2018.

2018 Financial highlights

  • 39% increase in total revenues to £14.6 million (2017: £10.5 million)
  • 8% increase in like for like sales in mainland Europe with Group like for like sales up 1% to £10.6 million (2017: £10.5 million) as UK is down by 1% due to the disruption from adding 73 beds in Elephant & Castle
  • 43% or £6.2 million of net revenue now coming from mainland Europe versus 19% in 2017
  • Occupancy grew to 76% (2017: 73%)
  • Adjusted EBITDA of £3.4m (2017: £3.2 million)
  • Loss before tax reduced to £0.60 million (2017: £0.86 million)
  • Loss per share 2.56p (2017: 2.55p)
  • Completed successful £10.36 million capital raise in December 2018 to fund future expansion

2018 Operational highlights

  • Added 575 beds with 3 new properties in the key gateway cities of Barcelona, Brussels and Vienna
  • Significant improvements in operating margins led to profit before tax from UK hostels increasing by 14% to £1.76 million (2017: £1.55 million)
  • Hostel EBITDAR margins have increased by 7% to 48% (2017 44.8%)
  • Guest recommendation rate increased to 81% (2017 80%)
  • Enhanced website and booking engine implemented in Q4 2018
  • Adopted common property management system (Cloudbeds) now operating in all hostels
  • Madrid rooftop bar open since July 2018

Post year end

  • Completed 73-bed extension to Elephant & Castle on 20 January 2019, triggering a £1.18 million final payment to Safestay under the re-financing transaction in February

Larry Lipman commenting on the results said:

“2018 was a positive year for the business and I am confident that 2019 will deliver continued growth.  The portfolio is maturing and shows the benefits of the Group gaining from economies of scale, geographic spread and group wide automation. This, together with continuing global demand for the modern hostel experience means we are well placed to sell an increasing number of  bed nights in 2019 and add further destination cities to our portfolio.”

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