Safestay PLC Trading Statement (2432D)
January 30 2018 - 2:00AM
UK Regulatory
TIDMSSTY
RNS Number : 2432D
Safestay PLC
30 January 2018
30 January 2018
Safestay plc
("Safestay", the "Company" or the "Group")
FY17 Trading Statement
Safestay (AIM:SSTY), the owner and operator of a new brand of
contemporary hostel, is pleased to announce, that during the 12
months to 31 December 2017, the Company has performed strongly,
significantly increasing EBITDA, sales and occupancy in line with
market expectations.
Key highlights
-- 43% growth in total revenues to GBP10.6 million (including acquisitions made in 2017)
-- 15% growth in UK revenues to GBP8.5 million showing strong underlying performance
-- Reflecting the strong sales growth like for like occupancy
increased by 13.5% to 74% (31 December 2016: 65%)
-- UK average bed rate stable at GBP20 with scope for future
increases in line with increased demand
-- Successful integration of 5 newly acquired European
properties in key gateway city destinations
-- Established a strong brand marketing platform in the fast growing, global hostel market
During 2017 the Group made a series of acquisitions increasing
the portfolio from 4 to 9 operating hostels plus a development site
in Paris, 34 apartments in Madrid under development, and also
commenced the Elephant & Castle extension. Thereby, increasing
the number of beds from 1,526 to 2,306 plus the 34 apartments and a
further 330 additional beds when Paris and the Elephant and Castle
extension open. This has transformed the scale of the business and
establishes a network of European Safestay branded hostels in key
gateway cities.
The integration of the new hostels has been successful with the
commercial focus of the European teams being enhanced by adding the
Groups digital systems, revenue management and branding. The
European hostels combined contributed total revenues of GBP2.0
million, for the period under our ownership, an excellent start and
ahead of projections made at the time of acquisition.
As pleasing, has been the performance of the UK hostels which
have traded strongly throughout 2017. Total revenues increased by
15% which includes a significant 15% increase in ancillary income
reflecting management focus on growing this area of the business.
All four hostels grew sales and occupancy. In particular,
Kensington Holland Park with its unique building and position
significantly increased occupancy by 32% to 73% over the previous
year reflecting its' undoubted potential.
The Hostel Market
Interest globally in what a modern hostel can offer, as distinct
from a traditional hotel experience, has never been higher. As
people become aware that for around GBP20 per night, an individual
or groups can stay centrally in a capital city, in safe, clean and
contemporary surroundings designed to provide those who want to
socialise the option to do so, and ultimately providing an
enjoyable and comfortable hospitality experience.
This is translating into strong demand and explains the
substantial increase in revenues being generated from the hostel
sector and why forecasts of future growth have increased
significantly. In 2014 revenue from the global hostel industry for
2018 was forecast to be $5.2 billion, this forecast has now been
revised up to $7 billion and growth beyond 2018 is now expected to
run at a remarkable 8% per annum*.
*Source: Colliers International 2017
Commenting on trading, Larry Lipman, Chairman of Safestay,
said:
"The hostel market has grown substantially in the last few years
and a key driver has been the growing awareness amongst consumers
of what staying in a contemporary hostel offers them. As a result,
momentum is good and Safestay is benefitting from market growth,
much improved operating practices and from being a truly distinct
brand at the high end of this market.
While our 2017 trading performance has been strong and in line
with market expectations, we remain focused on growing the
portfolio and our marketing platform, both organically and by
acting as a consolidator through the acquisition of individual
sites and small chains of hostels, as well as procurement of sites
for development. We have in place the operational backbone to
support a much larger business across multiple geographies and we
look forward to making further significant progress in 2018."
Enquiries
+44 (0) 20 8815
Safestay plc 1600
Larry Lipman
Sharon Segal
Canaccord Genuity Limited +44 (0) 20 7523
(Nominated Adviser and Broker) 8000
Chris Connors
Martin Davison
+44 (0) 20 3151
Novella 7008
Tim Robertson
Toby Andrews
This information is provided by RNS
The company news service from the London Stock Exchange
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