TIDMSSTY
RNS Number : 7150U
Safestay PLC
11 April 2016
Safestay PLC
("Safestay" or "the Company")
Final Results
For the Year to 31 December 2015
Operational highlights
-- Opened Holland Park and acquired Edinburgh, substantially
increasing size of the business to 1,526 beds up from 560 at the
start of the year
-- Elephant & Castle, our only year-on-year comparable
hostel, had another good year showing increases in occupancy to
78.6% (2014: 78.1%), average bed rate up by 5.7% over the previous
year and revenue per available bed up 6.3%
-- In 2015, Safestay laid the foundations for supporting a much larger enterprise through:
o Investing in the senior team with the appointment to the Board
of Philip Houghton as Chief Executive together with the senior
management appointment of Mark Beveridge as Finance Director
o Investing in a new systems infrastructure, a new Group website
and internet booking engine, that has enabled the introduction of
dynamic pricing. This provides a strategic platform to drive
revenues and provide the business with meaningful data to maximise
rate uplift opportunities in the future
o Investing in Revenue, Sales, Marketing and Finance functions
to build a scalable business
Financial highlights
-- Revenues increased to GBP4.0 million (2014: GBP1.9 million)
which only included contributions from Edinburgh since acquisition
on 16 September and Holland Park following it's soft opening in
August
-- EBITDA of GBP0.7 million (2014: GBP0.7 million) driven
through good trading performances from more mature sites, the
introduction of two new sites and building of scalable
infrastructure
-- The Group's freehold property assets increased to GBP28.8 million (2014: GBP14.9 million)
-- Loss before tax of GBP0.6 million (2014: profit before tax of GBP0.1 million)
-- Net asset value per share increased to 48p per share (2014: 45p per share)
Larry Lipman commenting on the results said:
"In revenue terms we doubled the size of the business in 2015
and we are on track with the current sites to do the same again in
2016. As with all small, fast growing businesses we have had to
invest in putting in place the platform to support our growth plans
and we are already seeing the benefits of that decision which
ensures that as new sites come into the Group they can be
efficiently and effectively consolidated.
2016 will see a full year's activity for Safestay Edinburgh and
Safestay Holland Park that will lead to significant increase in
revenue. We have a strong pipeline of on-the-books business.
We expect increasing activity on the website as brand momentum
grows with more direct bookings and greater customer touch-points
and increased contracted group bookings. In addition, we expect
enhanced F&B contribution to the business.
The pipeline of potential acquisitions is in varying stages of
interest.
Our objective remains to create a leading contemporary hostel
business under the Safestay brand focussed on the provision of
stylish and affordable accommodation."
Enquiries:
Safestay plc +44 (0) 20 8815 1600
Larry Lipman, Chairman
Canaccord Genuity Limited
(Nominated Adviser and Broker) +44 (0) 20 7523 8000
Bruce Garrow
Chris Connors
Novella
Tim Robertson +44 (0) 20 3151 7008
Ben Heath
Chairman's Statement
Introduction
I am very pleased to be able to present the results for the 12
months to 31 December 2015 which show the Safestay portfolio of
hostels expanding rapidly and establishing the base to support a
much larger business.
At the end of 2015 Safestay was trading from four hostels (two
in London, one in York and one in Edinburgh) comprising 1,526 beds,
up from 560 beds at the start of the year.
Demand is good and, we believe, set to increase as interest in
alternatives to traditional hotel accommodation grows. The rise of
online offerings such as Airbnb and Flipkey alongside the
contemporary hostel sector has helped greatly, as this has further
educated the travelling population that there are good, certainly
more affordable and perhaps better alternatives in great
locations.
Safestay therefore welcomes the disruption of the status quo
amongst the hotel industry, as we believe we are well placed to
compete, by offering great locations, and a range of accommodation
options to meet the needs and budgets of a broad range of
customers. Combining this with great social spaces sets the
Safestay offer apart from the budget hotels and private
residences.
We are well placed to utilise our knowledge and expertise to
build a scalable business and our track record of acquiring real
estate gives Safestay a significant commercial advantage over our
competitors.
We believe the premium hostel segment is a very exciting
opportunity. We continue the process of educating the external
market as to the advantages of staying at a premium hostel and
thanks to our efforts to date, premium hostels are rapidly gaining
momentum across the consumer and investor communities.
Financial Results
The results we are reporting are for the year ended 31 December
2015. During this time the Elephant & Castle and York hostels
have had a full year's trading whilst the Holland Park and
Edinburgh hostels are part year, coinciding with the phased opening
through August and acquisition on 16 September respectively.
For the year to 31 December 2015, the Group generated revenues
of GBP4.0 million compared to GBP1.9 million in the prior year.
During the year under review, the new sites in Holland Park and
Edinburgh contributed for just over 4 and 3 months
respectively.
Investment in the development of infrastructure of the business
to support its future growth has meant the Group reported a loss
before tax of GBP0.6 million compared to a pre-tax profit of GBP0.1
million in the previous year. The investment was spread across the
business and aimed at enabling the Group to manage the expected
increase in the number of hostels it operates. As a consequence,
the Company recorded a loss per share of 2.5p compared with a
profit of 1.3p per share in 2014.
The Group now consists of three freehold properties and one
leasehold property. As at 31 December 2015, its freehold property
portfolio was valued at GBP28.8 million (2014: GBP14.9 million). In
addition, the Group's interest in the leasehold property is carried
as a finance lease at GBP12.7 million (2014: GBPnil).
As at 31 December 2015, the Company had gross bank and loan note
borrowings of GBP18.3 million (2014: GBP9.3m) secured against its
freehold properties with an average weighted interest cost of
4.05%.
Gearing, measured as the proportion of total liabilities (which
now includes the Holland Park lease) less trade and other payables
and derivative financial instruments as a proportion of total
shareholder's equity is 1.72 (2014: 1.05).
We continue to focus on investment in the business to help drive
growth and deliver on our strategy. As a result, the Directors have
not recommended the payment of a dividend for the year (2014: 0.3
pence per share).
Key achievements in 2015
2015 was a transformational year for Safestay since the demerger
in 2014 when the business became an AIM-listed hostel group. The
addition of trading hostels in London Holland Park and Edinburgh
complemented the existing properties in London Elephant &
Castle and York perfectly. These hostels position Safestay as the
leading premium hostel group in the UK offering 1,526 beds in key
gateway cities.
Elephant & Castle had another good year showing increases in
occupancy to 78.6% (2014: 78.1%), average bed rate up by 5.7% and
revenue per available bed up 6.3% over the previous year.
Our smallest site in York improved upon its first half
performance benefitting from focused management activity and an
expanded marketing programme. In its first full year's trading,
occupancy was up to 50.3% (2014 was not comparable) and a strong
average bed rate. The site made a positive contribution to the
Group and has the scope for further improvement.
The year saw the opening of Safestay London Holland Park and the
acquisition of Smart City Hostels, Edinburgh. The major
refurbishment works in Holland Park were completed in August and
early indications are positive. As a new opening it takes time to
mature the business (typically three years) with early adopters
being predominantly independent travellers, given that group
enquiries have a longer lead time. Guest satisfaction at Holland
Park in Q4 of 2015 was the strongest across all Safestay properties
(source: Renivate post-stay net promoter score) and group enquiries
for 2016 and beyond gives confidence in the trading outlook as the
business matures through 2016/17.
The Edinburgh hostel was acquired in September and trades as
Smart City Hostels by Safestay, Edinburgh. The majority of the
refurbishment works are complete with the balance scheduled to be
concluded shortly after the student rooms are released back to the
business in May (part of the hostel is currently converted to
student accommodation and rented to the University of Edinburgh
during the academic year). Trading post-acquisition has been very
encouraging with the hostel benefiting from management focus and
the synergies from the London hostels and group-wide contracts.
Enhanced revenues have been complemented with the realisation of a
number of cost savings as the hostel has been integrated into
Safestay's infrastructure.
In Q4 Safestay introduced a new property management system, web
site and internet booking engine which went live at the end of
January 2016. These tools will allow Safestay to consolidate
processes across the hostels, unlocking further revenue potential
and the ability to reduce the cost of acquisition by building the
brand equity and increasing the proportion of direct business. In
order to unlock this potential the Sales, Marketing and Revenue
Management functions have been strengthened with key management
appointments.
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A core part of Safestay's success is our property expertise. The
ability to source the right properties on competitive terms is
critical to the growth agenda. Our track record of acquiring real
estate gives Safestay a significant commercial advantage as well as
underpinning the value of the company. 2015 has reinforced this
point with a favourable long leasehold achieved underpinning
Safestay London Holland Park and the freehold acquisition of Smart
City Hostels, Edinburgh.
In preparing Safestay for accelerated growth into key European
gateway cities the group has been strengthened by the senior
management appointment of Mark Beveridge as Finance Director in
November 2015. Mark joins Safestay from InterContinental Hotels
Group (IHG) plc as Director of Corporate Finance where he notably
supported their growth agenda in the EMEA region. Since joining
Mark has strengthened Safestay's finance function which will
underpin driving enhanced trading performance from the existing
portfolio and supporting the growth activity.
Outlook
Safestay has grown rapidly through 2015 adding in two new
hostels and in so doing becoming the UK's leading premium hostel
Group. The changes we have made to our systems, people and
processes provide us with the platform to drive additional value
from our existing portfolio and absorb new properties. The Board
remains confident in our trading outlook for 2016.
We are currently sourcing new opportunities both in the UK and
principal cities across Europe that are popular with our target
market.
We look forward with confidence to an exciting and profitable
journey ahead.
Larry Lipman
Chairman
11 April 2016
Safestay plc
Consolidated Income Statement
Note 2015 2014
GBP'000 GBP'000
Revenue 1 4,023 1,938
Cost of sales (486) (204)
-------- --------
Gross profit 3,537 1,734
Administrative expenses (3,327) (1,154)
-------- --------
Operating profit 210 580
Finance income 1 1
Finance costs (821) (444)
-------- --------
(Loss) / Profit before tax (610) 137
Tax 8 (22)
-------- --------
(Loss) / Profit for the financial year/period
attributable to owners of the parent company (602) 115
======== ========
Basic (loss)/earnings per share 2 (2.52p) 1.29p
Diluted (loss)/earnings per share 2 (2.52p) 1.18p
There is no difference between the diluted loss per share and
the basic loss per share presented. Due to the loss incurred in the
year the effect of the share options in issue is anti-dilutive.
The revenue and operating result for the period is derived from
acquired and continuing operations in the United Kingdom.
Safestay plc
Consolidated Statement of Comprehensive Income
2015 2014
GBP'000 GBP'000
(Loss)/Profit for the year/period (602) 115
-------- --------
Other comprehensive income
Items that will not be reclassified subsequently
to profit and loss
Revaluation of freehold land and buildings 152 206
Total comprehensive (loss)/income for the
period attributable to owners of the parent
company (450) 321
======== ========
Safestay plc
Consolidated Statement of Financial Position
Note 2015 2014
GBP'000 GBP'000
Non-current assets
Property, plant and equipment 3 42,327 15,000
Intangible assets 4 1,352 -
Goodwill 4 525 -
-------- --------
Total non-current assets 44,204 15,000
-------- --------
Current assets
Stock 19 4
Trade and other receivables 594 167
Deferred tax - 21
Derivative financial instruments 20 7
Cash and cash equivalents 1,060 3,310
--------
Total current assets 1,693 3,509
-------- --------
Total assets 45,897 18,509
-------- --------
Current liabilities
Loans and overdrafts 5 693 1,314
Finance lease obligations 6 65 -
Trade and other payables 1,062 662
-------- --------
Current liabilities 1,820 1,976
-------- --------
Non-current liabilities
Bank loans and convertible loan notes 5 17,391 7,786
Finance lease obligations 6 10,196 -
Derivative financial instruments 36 46
--------
Total non-current liabilities 27,623 7,832
-------- --------
Total liabilities 29,443 9,808
-------- --------
Net assets 16,454 8,701
======== ========
Equity
Share capital 8 342 192
Share premium account 9 14,504 6,410
Merger reserve 1,772 1,772
Share based payment reserve 23 6
Revaluation reserve 358 206
Retained earnings (545) 115
-------- --------
Total equity attributable to owners of
the parent company 16,454 8,701
======== ========
These financial statements were approved by the Board of
Directors and authorised for issue on 11 April 2016.
Signed on behalf of the Board of Directors Larry Lipman
Safestay plc
Consolidated Statement of Changes in Equity
Share Share Merger Share Revaluation Retained Total
Capital premium Reserve based Reserve earnings equity
GBP'000 account GBP'000 payment GBP'000 GBP'000 GBP'000
GBP'000 reserve
GBP'000
-------- -------- -------- -------- ----------- --------- --------------
Balance as at 29
January 2014 - - - - - - -
Comprehensive income
Profit for the
period - - - - - 115 115
Other comprehensive
income - - - - 206 - 206
-------- -------- -------- -------- ----------- --------- --------------
Total comprehensive
income - - - - 206 115 321
-------- -------- -------- -------- ----------- --------- --------------
Transactions with
owners
Issue of shares
Share based payment
charge for the
period 192 6,410 1,172 - - - 8,374
Balance at 31 December
2014 192 6,410 1,772 6 206 115 8,701
Comprehensive income
Loss for the year - - - - - (602) (602)
Other comprehensive
income - - - - 152 - 152
-------- -------- -------- -------- ----------- --------- --------------
Total comprehensive
income - - - - 152 (602) (450)
-------- -------- -------- -------- ----------- --------- --------------
Transactions with
owners
Issue of shares 150 8,094 - - - - 8,244
Dividend paid (58) (58)
Share based payment
charge for the
period - - - 17 - - 17
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-------- -------- -------- -------- ----------- --------- --------------
Balance at 31 December
2015 342 14,504 1,772 23 358 (545) 16,454
======== ======== ======== ======== =========== ========= ==============
Dividends paid in the year relate to the dividends declared of
0.3 pence share in the previous year.
Safestay plc
Consolidated Statement of Cash Flows
Note 2015 2014
GBP'000 GBP'000
Operating activities
Cash generated from operations 643 639
-------- --------
Net cash generated from operating activities 643 639
-------- --------
Investing activities
Interest received 1 1
Purchases of property, plant and equipment (4,082) (2,724)
Acquisition of business 7 (14,150) -
--------
Acquisition of subsidiary net of cash - (5,320)
--------
Net cash outflow from investing activities (18,231) (8,043)
-------- --------
Financing activities
New loans 10,500 9,917
Loan arrangement fees (81) (226)
Issue of ordinary shares for cash 8,535 8,114
Fees related to the issue of shares (1,041) (1,549)
Dividend paid (58) -
Interest paid (620) (356)
Loan repayments (1,897) (5,186)
--------
Net cash generated from financing activities 15,338 10,714
-------- --------
Net (decrease)/increase in cash and cash
equivalents (2,250) 3,310
--------
Cash and cash equivalents at end of period 1,060 3,310
======== ========
Safestay plc
Basis of Preparation
On 11 April 2016, the Directors approved this preliminary
announcement for publication. Copies of this announcement are
available from the Company's registered office at 1a Kingsley Way,
London N2 0FW and on its website, www.safestay.com. The Annual
Report and Accounts will be sent to shareholders in due course and
will be available on the Company's website, www.safestay.com. The
financial information presented above does not constitute statutory
financial statements as defined by section 435 of the Companies Act
2006 for the year ended 31 December 2015.
The financial information for the year ended 31 December 2015 is
derived from the statutory financial statements for that year,
prepared under IFRS, under which the auditors have reported. The
audit report was unqualified, did not include references to matters
to which the auditor drew attention by way of emphasis without
qualifying their report and did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006. The statutory
financial statements for the year ended 31 December 2015 will be
delivered to the Registrar of Companies following the Company's
Annual General Meeting.
The accounting policies applied in this announcement are
consistent with those of the annual financial statements for the
year ended 31 December 2015, as described in those financial
statements.
1. Significant Accounting Policies
Revenue
Revenue is stated net of VAT and comprises revenues from
overnight hostel accommodation, income from the rental of student
accommodation during the academic year and the sale of ancillary
goods and services. Accommodation and the sale of ancillary goods
and services is recognised when provided. Income from the rent of
student accommodation is recognised on a straight line basis over
the academic year to which the rent relates.
The 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 is recognised as
revenue once the bed has been occupied.
Leases
The Group as lessor
Rental income from operating leases is recognised on a
straight-line basis over the term of the relevant lease.
The Group as lessee
Assets held under finance leases are recognised as assets of the
group at the present value of the lease payments at the inception
of the lease. The corresponding liability to the lessor is included
in the balance sheet as a finance lease obligation.
Lease payments are apportioned between finance expenses and
reduction in lease obligation so as to achieve a constant rate of
interest on the remaining balance of the liability. Finance
expenses are recognised immediately in the profit and loss
account.
All other leases are classified as operating leases. Operating
leases are recognised in the income statement on a straight line
basis over the life of the lease.
Property, plant and equipment
Freehold property is stated at fair value and revalued annually.
Valuation surpluses and deficits arising in the period are included
in other comprehensive income. Fixtures fittings and equipment are
stated at cost less depreciation and are depreciated over their
useful lives. The applicable useful lives are as follows:
Fixtures, fittings and equipment 3 years
Freehold properties 50 years
Leasehold properties 50 years
Assets held as finance leases are depreciated over the shorter
of the lease term and their expected useful lives on the same basis
as owned assets.
Critical accounting judgements and key sources of estimation and
uncertainty
The fair value of the Group's property is the main area within
the financial information where the Directors have exercised
significant estimates.
-- The fair value of the Group's property portfolio is based
upon an external valuation and is inherently subjective.
-- The Holland Park lease showed indicators that it could be
treated as either a finance or operating lease. The Group's
decision to treat it as a finance lease was based on a balanced
judgment of relevant factors. Furthermore, the fair value of the
Group's finance lease asset is inherently subjective. The
methodology applies a discount rate to the future lease payments to
approximate to the fair value of the asset.
-- The Smart City hostel in Edinburgh was acquired in a
competitive market and supported by an external valuation. The
allocation of the acquisition price to each asset class in
combining with the Group is subjective.
2. Earnings per Share
The calculation of the basic and diluted earnings per share is
based on the following data:
2015 2014
GBP'000 GBP'000
(Loss)/Profit for the period attributable
to equity holders of the company (602) 115
======== ========
2015 2014
'000 '000
Weighted average number of ordinary shares
for the purposes of basic (loss)/ earnings
per share 23,881 8,948
Effect of dilutive potential ordinary shares 6,545 792
-------- ------
Weighted average number of ordinary shares
for the purposes of diluted (loss)/ earnings
per share 30,426 9,740
-------- ------
Basic (loss)/ earnings per share (2.52p) 1.28p
-------- ------
Diluted (loss)/ earnings per share (2.52p) 1.18p
-------- ------
There is no difference between the diluted loss per share and
the basic loss per share presented. Due to the loss incurred in the
year the effect of the share options in issue is anti-dilutive.
3. Property, Plant and Equipment
Freehold Leasehold Fixtures, Total
land and land and fittings GBP'000
buildings buildings and equipment
GBP'000 GBP'000 GBP'000
Cost or valuation
Balance as at 29 January 2014 - - - -
Additions 2,683 - 41 2,742
Acquisitions 12,128 - 72 12,200
Revaluation 110 - - 110
---------- ---------- -------------- ---------
Balance as at 31 December 2014 14,921 - 113 15,034
Additions 1,068 12,793 742 14,603
Acquisitions 12,775 - 200 12,975
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At 31 December 2015 28,764 12,793 1,055 42,612
---------- ---------- -------------- ---------
Depreciation
Balance as at 29 January 2014 - - - -
Charge for the period 96 - 34 130
Revaluation (96) - - (96)
---------- ---------- -------------- ---------
Depreciation brought forward at
1 Jan 2015 - - 34 34
Charge for the year 152 71 180 403
Revaluation (152) - - (152)
---------- ---------- -------------- ---------
At 31 December 2015 - 71 214 285
---------- ---------- -------------- ---------
Net book value:
At 31 December 2015 28,764 12,722 841 42,327
========== ========== ============== =========
At 31 December 2014 14,921 - 79 15,000
========== ========== ============== =========
The Directors' consider the most recent valuations as an
appropriate fair value of the freehold properties as at 31 December
2015. These are independently assessed based on applying discounted
cash flows to forecasts of future earnings before interest,
taxation and depreciation (EBITDA) using the following assumptions
relevant to the properties:
Elephant & Castle York
Valuer: Edward Symmons LLP Valuer: Edward Symmons LLP
Date: 29 April 2014 Date: 12 November 2014
Assumptions: Cap rate 8%, discount Assumptions: Yield 10.5%
10.5%
Edinburgh
Valuer: Colliers International
Date: 10 August 2015
Assumptions: Yield 7.4%
The revaluation surplus was credited to other comprehensive
income and is shown in revaluation reserve. The freehold property
is the only non-financial asset held at fair value. The valuation
of this asset requires significant inputs that are not based on
observable market data (level 3). The property's current use equate
to the highest and best use.
The Group's policy is to recognise transfers into and out of
fair value hierarchy levels as of the date of the event or change
in circumstances that caused the transfer. No transfers occurred
during the period.
The most significant inputs, all of which are unobservable, are
forecast EBITDA and the capitalisation rate. The overall valuations
are sensitive to these assumptions and management considers the
range of reasonably possible alternative assumptions.
The following table details the sensitivity of changes in the
underlying inputs:
Change in EBITDA
5% 0% -5%
GBP'000 GBP'000 GBP'000
------- ------- -------
Change
in -0.5% 32,256 31,218 29,651
Cap rate 0% 31,271 29,800 28,292
0.5% 29,856 28,431 27,016
------- ------- -------
The historical cost of property, plant and equipment is GBP28.8
million (2014: GBP14.9 million).
The group has pledged freehold property with a carrying value of
GBP28.8 million (2014: GBP14.9 million) to secure banking
facilities and loan notes granted to the Group (note 5).
The valuation of the lease on the Holland Park property is
stated at the present value of the future lease payments at a yield
of 6.5%. This constitutes the substantial part of a theoretical
freehold valuation.
4. Intangible Assets and Goodwill
Note Intangible Goodwill Total
Asset GBP'000 GBP'000
GBP'000
Cost
Acquisitions 7 1,400 525 1,925
---------- -------- --------
At 31 December 2015 1,400 525 1,925
Amortisation
Charge for the period 48 - 48
---------- -------- --------
At 31 December 2015 48 - 48
Net book value:
At 31 December 2015 1,352 525 1,877
========== ======== ========
On the acquisition of the business on Smart City hostel in
Edinburgh (note 7) the Director's identified an intangible asset in
relation the lease with the University of Edinburgh, which
terminates in 2027. After valuing all of the identifiable assets
and liabilities on the acquisition of the business, goodwill of
GBP525,000 was recognised.
5. Loans
2015 2014
GBP'000 GBP'000
At amortised cost
Bank Loan 14,549 5,460
Convertible loan 3,800 2,800
Loan notes - 1,024
-------- --------
18,349 9,284
Loan arrangement fees (265) (184)
-------- --------
18,084 9,100
======== ========
Loans repayable within one year 693 1,324
Loans repayable after more than one year 17,391 7,786
--------
18,084 9,100
======== ========
The bank facilities are summarised below:
Related Property Elephant & Edinburgh York Holland Park
Castle
Principal ('000) GBP5,600 GBP6,500 GBP1,000 GBP2,000
Outstanding as at GBP5,180 GBP6,419 GBP975 GBP1,975
31 December 2015 ('000)
Secured Secured Secured Secured
Interest rate LIBOR plus LIBOR plus LIBOR plus LIBOR plus
3.25% 3% 3.25% 3%
Term 5 years 5 years 5 years 5 years
Each of the bank loans have a term of five years on which
interest is payable at between 3.00% and 3.25% over LIBOR. The
Group has given security to the bank including a first ranking
charge over the Group's freehold hostels in Elephant & Castle,
York and Edinburgh and a legal charge over the Holland Park
property. There were no breaches in bank loan covenants as at 31
December 2015.
Convertible loan note terms:
Secured (GBP'000) Unsecured (GBP'000)
Value 2,800 1,000
Issued 2 May 2014 11 September
2015
Term 3 years from 3 years from
issue issue
Coupon rate 6% 5%
Conversion price per Ordinary Share at
the option of the note holder, at any
time prior to redemption 57.5p 70.0p
Secured Convertible loan notes are by way of a charge over the
Group's hostel in Elephant & Castle, ranking after the security
granted to the bank.
The loan notes issued on 24 May 2014 were repaid on 24 April
2015. The rate of interest on loan notes was 0.75% per month for
the first 8 months followed by 11% for the remaining 3 months.
All of the Group's loans disclosed above comprise borrowings in
sterling.
The repayment profiles of the loans are as follows:
Convertible Bank Other Total
loan notes loan loan
GBP000 GBP000 GBP000 GBP000
------------ ------- ------- --------
Due within one year - 755 - 755
Between one and two years 3,800 755 - 4,555
Between two and five years - 13,039 - 13,039
------------ ------- -------
Balance at 31 December 2015 3,800 14,549 - 18,349
============ ======= ======= ========
Balance at 31 December 2014 2,800 5,460 1,024 9,100
============ ======= ======= ========
6. Obligations under Finance Leases
Present value
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of minimum lease
payments
2015 2014
GBP'000 GBP'000
Amounts payable under finance leases:
Within one year 65 -
In the second to fifth years inclusive 158 -
After five years 10,038 -
--------- --------
Present value of future lease obligations 10,261 -
========= ========
The group has treated the Holland Park lease as a finance lease
on the basis that the present value of the lease payments
constitutes the substantial part of a theoretical freehold
valuation.
The average effective borrowing rate was 6.55%. The lease is on
a fixed repayment basis and no arrangements have been entered into
for contingent rental payments.
The fair value of the group's lease obligations is approximately
equal to their carrying amount. The Group's finance leases
disclosed above are in sterling.
7. Business Combinations
On 16 September 2015, Safestay plc acquired 100% of the assets
of the Smart City hostel in Blackfriars Street in Edinburgh,
currently trading as Smart City Hostel by Safestay, Edinburgh.
Assets recognised at the date of acquisition were as
follows:
GBP000's GBP000's GBP000's
Directors' Directors'
adjustment valuations
Non-current assets
Property, plant and equipment 14,900 (1,925) 12,975
Interest in head lease (note
4) - 1,400 1,400
Current assets
Stock 16 (16) -
Current liabilities - - -
Advance deposits (60) 60 -
--------- ----------------------- ------------
Total assets 14,856 (481) 14,375
========= ======================= ============
Consideration 14,900
Net assets acquired 14,375
------------
Goodwill arising on acquisition 525
============
Consideration transferred:
Cash 14,150
Vendor shares issued 1,209,677
ordinary shares at 62p 750
14,900
------------
As part of the placing and open offer, an external valuation of
the Edinburgh business of GBP14.9 million was prepared by Colliers
International LLP as at 17 August 2015 using the discounted cash
flows technique with a 7.4% yield applied to forecasts of future
earnings before interest, taxation and depreciation (EBITDA),
reflecting both the hostel and student accommodation businesses.
Based on performance since acquisition and the strength of expected
future performance, the value of the acquisition is fairly
reflected.
8. Share Capital
Allotted, issued and fully paid
19,244,520 Ordinary Shares of 1p each as at 1 January
2015 192
14,974,615 Ordinary Shares of 1p each issued on
10 September 2015 150
---
34,219,135 Ordinary Shares of 1p each as at 31
December 2015 342
===
At the 31 December 2015, the ordinary shares rank pari passu.
There are no changes to the voting rights of the ordinary shares
since the balance sheet date.
9. Share Premium
GBP'000
Brought forward as at 1 January 2015 6,410
Share premium received on 14,974,615 Ordinary shares
of 1p each
10 September 2015 at 61p per share 9,135
Share issue costs (1,041)
-------
As at 31 December 2015 14,504
=======
Share issue costs represent the costs of the placing and open
offer on 10 September 2015.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LKLFBQZFZBBL
(END) Dow Jones Newswires
April 11, 2016 02:00 ET (06:00 GMT)
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