TIDMSSTY
RNS Number : 2435R
Safestay PLC
10 September 2014
SAFESTAY PLC
UNAUDITED RESULTS FOR THE PERIOD FROM 29 JANUARY 2014 TO 30 JUNE
2014
Chairman's statement
I am pleased to present the maiden set of interim results of
Safestay plc following its admission to trading on AIM on 2 May
2014.
The Company owns and operates a brand of contemporary hostels,
designed to appeal to a broad range of guests. Known as a "boutique
hostel" within the travel industry, its aim is to provide safe,
stylish accommodation which offers a more attractive alternative to
both traditional hostels and budget hotel accommodation.
The Company was incorporated on 29 January 2014 and admitted to
AIM on 2 May 2014, at which time GBP7.6m was raised from new
investors, which combined with a Coutts & Co loan facility of
GBP5.6m was used to acquire the Safestay joint venture and to
provide working capital. At the time of the Company's admission to
AIM, the joint venture owned a freehold property in Elephant &
Castle from which it operated the Safestay hostel and,
subsequently, on 24 May 2014, the Group acquired a second hostel in
York for GBP2.35m.
Although these results are for the period from incorporation on
29 January 2014 to 30 June 2014, as a result of the listing and
acquisition of the Safestay Joint venture, the Group commenced
trading on 2 May 2014 and these results therefore only include the
trading from that date to 30 June 2014.
Safestay Elephant & Castle
This hostel is located at John Smith House, in Elephant &
Castle, in the London Borough of Southwark, in what were the former
headquarters of the Labour Party. The freehold property has a gross
internal area of 37,000 square feet with 413 beds located in 74
separate rooms.
The hostel opened its doors for business in June 2012 since when
it has seen significant growth in occupancy and average bed rates,
which together drive total bed revenue.
For the six months to 30 June 2014, occupancy at the hostel was
75.6% (2013: 64.1%), which was above the budget for the period. The
average bed rate for the six months to 30 June 2014 increased by
12.2% over the same period last year. Both of these factors
generated an overall increase in total bed revenue for the six
months to 30 June 2014 of 31.8% when compared with the six months
to 30 June 2013.
Safestay York
Located inside the historic walled city of York, this 153 bed
hostel operating from a freehold property was acquired by the Group
on 24 May 2014 as part of its strategy to add venues to the Group
to create a portfolio of hostels in selected locations in the UK
and Europe. Although the average bed rate of the hostel is at
reasonable levels, historically, the occupancy level has been below
50%.
For the six months to 30 June 2014, occupancy was 50.9% compared
with 44.1% in the same period in 2013.
A refurbishment and re-branding of the hostel has commenced
since the period end, which the Directors anticipate will result in
increased occupancy and bed revenue.
In line with its strategy outlined above, the Board is reviewing
further potential acquisition opportunities, and expects that
expansion of the portfolio will follow in due course.
Larry Lipman
Chairman
Contacts:
Larry Lipman Chairman, Safestay Plc: 020 8815 1600
Tom Griffiths, Westhouse Securities Limited: 020 7601 6100
Unaudited
Condensed consolidated income Period
statement from
29 January
to
30 June
2014
Note GBP000
-------------
Revenue 3 502
Cost of sales (41)
Gross profit 461
Administrative expenses (240)
Operating profit 221
Finance costs (84)
Profit before tax 137
Tax (30)
-------------
Profit for the financial period
attributable to owners of the
parent company 107
-------------
Basic earnings per share 5 5.10
Diluted earnings per share 5 4.68
Unaudited
Period
Condensed consolidated statement of comprehensive income from
29 January
to
30 June
2014
GBP000
-----------
Profit for the period 107
Total comprehensive income for the period attributable
to owners of the parent company 107
-----------
Condensed consolidated statement of Unaudited
financial position 30 June
2014
Note GBP000
-----------
Non-current assets
Property, plant and equipment 8 14,701
Current assets
Stock 2
Trade and other receivables 230
Cash and cash equivalents 1,423
1,655
-----------
Total assets 16,356
-----------
Current liabilities
Loans 9 1,800
Trade and other payables 820
2,620
-----------
Non-current liabilities
Loans 9 7,905
-----------
Total liabilities 10,525
-----------
Net assets 5,831
-----------
Equity
Share capital 10 132
Share premium account 11 5,580
Share-based payment reserve 12
Retained earnings 107
Total equity attributable to owners of the
parent company 5,831
-----------
Condensed consolidated statement of cash Unaudited
flows Period from
29 January
to
30 June 2014
Note GBP000
-------------
Cash flows from operating activities
Cash generated from operations 7 223
Interest paid (25)
-------------
Net cash generated from operating activities 198
-------------
Cash flows from investing activities
Purchase of property, plant and equipment (2,510)
Net cash outflow on acquisition of subsidiaries (5,320)
Net outflow from investing activities (7,830)
-------------
Cash flows from financing activities
Issue of shares 4,800
Payment for share issue costs (896)
Repayment of borrowings (4,546)
Increase in borrowings 5,600
Issue of loan notes 4,324
Loan arrangement fees (227)
Net cash inflow from financing activities 9,055
-------------
Net increase in cash and cash equivalents 1,423
Cash and cash equivalents at beginning of
period -
Cash and cash equivalents at end of period 1,423
-------------
Condensed consolidated Total
statement of changes in Share Share-based Retained
equity capital Share premium payment earnings
account reserve
GBP000 GBP000 GBP000 GBP000 GBP000
--------- -------------- ------------ ---------- -------
Comprehensive income
Profit for the period from
29 January 2014 to 30 June
2014 - - - 107 107
Transactions with owners
Shares issued in the period 132 5,580 12 - 5,724
Balance at 30 June 2014 132 5,580 12 107 5,831
--------- -------------- ------------ ---------- -------
1. Basis of preparation and accounting policies
The condensed interim consolidated financial statements of the
Company and its subsidiaries ("the Group") for the period from 29
January 2014 to 30 June 2014 ("the period") have been prepared
using accounting policies consistent with International Financial
Reporting Standards (IFRS) as adopted by the European Union. This
interim statement does not constitute full accounts as defined by
Section 434 of the Companies Act 2006.
These condensed interim financial statements have not been
audited, do not include all of the information required for full
annual financial statements. While the financial figures included
within this interim report have been computed in accordance with
IFRS applicable to interim periods, this report does not contain
sufficient information to constitute an interim financial report as
set out in International Accounting Standard 34 Interim Financial
Reporting.
2. Operating segments
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision makers.
The chief operating decision makers, who are responsible for
allocating resources and assessing performance of the operating
segments, have been identified as the executive directors.
Currently there is only one operating segment, which is the
operation of hostel accommodation in the UK.
3. Revenue
Revenue is stated net of VAT and comprises revenues from
overnight hostel accommodation and the sale of ancillary goods.
Accommodation and the sale of ancillary goods is recognised when
services are provided.
Sale of ancillary goods comprises sales of food, beverages and
merchandise.
Deferred income comprises deposits received from customers to
guarantee future bookings of accommodation. This revenue is
recognised once the bed has been occupied.
4. Business combinations
On 2 May 2014, Safestay plc acquired 100% of the partner's
interest in the Safestay joint venture, which owns and operates the
Safestay Elephant & Castle hostel. The joint venture was
between Safeland plc and Moorfield Funds who owned 20% and 80%
respectively. Moorfield Funds sold their interest for GBP6.242m.
Safeland plc demerged their 20% interest in consideration of
3,617,246 Safestay shares.
Assets acquired and liabilities recognised at the date of acquisition
were as follows:
GBP000
Non-current assets
Property, plant and equipment 12,200
Current assets
Stock 3
Trade and other receivables 117
Cash and cash equivalents 922
1,042
-------
Total assets 13,242
-------
Current liabilities
Bank loans 250
Trade and other payables 645
895
-------
Non-current liabilities
Bank loans 4,296
-------
Total liabilities 5,191
-------
Net assets 8,051
-------
Consideration transferred:
3,617,246 Safestay plc shares issued to Safeland plc 1,809
Cash paid to Moorfield fund 6,242
-------
8,051
-------
The directors have completed a review of the fair value of the
assets acquired and liabilities recognised and consider there is no
material difference to the amounts shown in the table above.
5. Earnings per share
Unaudited
Period from
29 January
to
30 June
2014
GBP000
Profit for the financial period attributable to owners of
the parent company 107
-------------
No.
000
Weighted average number of ordinary shares for
the purposes of basic earnings per share 2,100
Effect of potential dilutive ordinary shares:
share options 189
Weighted average number of ordinary shares for the purposes
of diluted earnings per share 2,289
-------------
Basic earnings per share 5.10p
Diluted earnings per share 4.68p
Diluted Earnings per share is calculated by adjusting the
earnings and number of shares for the effects of dilutive options
and other dilutive potential ordinary shares.
6. Dividends
No interim dividend has been declared or paid.
7. Cash flows from operating activities
Unaudited
Period from
29 January
to
30 June 2014
GBP000
Profit before tax 137
Depreciation 9
Finance costs 84
Share-based payments charge 12
242
Changes in working capital
Decrease in stock 1
Increase in trade and other receivables (113)
Increase in trade and other payables 93
223
-------------
8. Property, plant and
equipment
Freehold Plant and equipment
Land and buildings Six months Total
GBP000 GBP000 GBP000
-------------------------------------- ----------------------- -------------------
Cost
Acquisitions 12,127 73 12,200
Additions 2,471 39 2,510
-------------------------------------- ----------------------- -------------------
End of period 14,598 112 14,710
-------------------------------------- ----------------------- -------------------
Depreciation
Charge for the period - 9 9
-------------------------------------- ----------------------- -------------------
End of period - 9 9
-------------------------------------- ----------------------- -------------------
Net book value
30 June 2014 14,598 103 14,701
-------------------------------------- ----------------------- -------------------
Freehold land and buildings comprises the two hostels, Safestay
Elephant & Castle and Safestay York. Both properties are
pledged to secure banking facilities and loan notes granted to the
Group.
Due to the high residual value and long useful life,
depreciation on the property is negligible.
9. Loans
Unaudited
Year
ended
30 June
2014
GBP000
---------
At amortised cost
Bank loan 5,600
Convertible loan notes 2,800
Loan notes 1,524
---------
9,924
Unamortised Borrowing costs (219)
---------
9,705
---------
The Bank loan has a term of five years on which interest is
payable at 3.25% over LIBOR. The Group has given security to the
bank including a first ranking charge over the Group's freehold
hostel in the Elephant & Castle. There were no breaches in bank
loan covenants as at 30 June 2014.
The convertible loan notes were issued on 2 May 2014. They are
convertible into Ordinary Shares at the option of the noteholder,
at any time prior to redemption, as a rate which values each
Ordinary Share at 57.5p per share. The redemption period is three
years from the date of issue. Interest is payable at 6% per annum.
The convertible loan notes are secured by way of a charge over the
Group's hostel in the Elephant & Castle, ranking after the
security granted to the bank.
The loan notes were issued on 24 May 2014. They are repayable in
one year. The rate of interest on the Loan notes is 0.75% per month
for the first eight months and then 11% per annum for the remaining
four months. The loan notes are secured over the Group's Hostel in
York.
All of the Group's loans disclosed above comprise borrowings in
sterling.
The repayment profiles of the loans are as follows:
Convertible Other short Total
loan notes Bank loan term loan
GBP000 GBP000 GBP000 GBP000
------------ ---------- ------------ -------
Due within one year - 300 1,524 1,824
Between two and five years 2,800 5,300 - 8,100
Balance at 30 June 2014 2,800 5,600 1,524 9,924
------------ ---------- ------------ -------
10. Share capital
GBP000
--------
Allotted, issued and fully paid
1 Ordinary Share of 1p issued on 29 January -
2014
13,217,246 Ordinary Shares of 1p each issued
on 2 May 2014 132
--------
13,217,247 Ordinary Shares of 1p each as at
30 June 2014 132
--------
11. Share premium
Share premium received on 13,217,246 Ordinary Shares
issued on
2 May 2014 at 49p per share 6,476
Share issue costs (896)
-----------
5,580
-----------
Copies of this announcement are available on the Company's
website www.safestay.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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