Safestay PLC Trading Statement (6478B)

TIDMSSTY

RNS Number : 6478B

Safestay PLC

03 February 2020

3 February 2020

Safestay plc

("Safestay", the "Company" or the "Group")

FY19 Trading Statement

Safestay (AIM: SSTY), the owner and operator of an international brand of contemporary hostels, is pleased to announce a successful trading period for the 12 months to 31 December 2019, recording significant increases in revenues, occupancy and EBITDA.

FY19 Highlights

-- 25% growth in total revenues to GBP18.3 million (2018: GBP14.6 million) with like for like revenues up 7%

   --    11% increase in adjusted EBITDA* to GBP3.8 million (2018: GBP3.4 million) 
   --    77.3% occupancy achieved over the period, up from 75.6%, reflecting good demand 
   --    5% increase in average bed rate to GBP21.3 (2018: GBP20.3) 
   --    43% growth in F&B revenues now representing 14% of total revenues

-- Completed 6 transactions, adding 8 hostels increasing the portfolio to 21 sites and over 5,100 beds

   --    Europe now represents 49% of sales (2018: 43%)

* adjusted EBITDA excludes one-off, non-recurring expenditure which would otherwise distort the metric for comparison purposes

Larry Lipman, Chairman of Safestay, said, "In 2019 we near doubled the size of the Safestay network. In doing so, the Safestay brand has become Europe's leading premium hostel network totalling 21 sites, all in sought-after central locations in the UK and Europe's best known cities. The brand is now well established and positioned to sell over a million bed nights in 2020 in unique hostels ranging from Edinburgh to Athens.

Trading in 2019 was good, all key indicators were strongly positive, in particular the organic growth performance, and critically we have yet to really benefit from the recent acquisitions agreed towards the end of the year. Safestay is therefore well placed to grow substantially in 2020 and take advantage of the increasing popularity of the modern hostel sector."

Trading performance

The business performed well in 2019, achieving 25% growth in sales. Demand has been consistent across the business with occupancy now averaging 77.3%, helped by a 50% increase in direct web bookings driven by the Company's booking engine and website which were refreshed in early 2019.

F&B, previously identified as a growth opportunity, was up 43% in 2019 and supported by the refurbishment of 3 restaurants in Barcelona, Elephant & Castle and Edinburgh. These enhancements were part of the GBP1.8 million refurbishment and renovations programme across 2019 and 2020. Re-investment is core to maintaining the premium status of Safestay amongst the hostel market and the ongoing high levels of guest satisfaction.

The integration of the new hostels acquired in 2019 is proceeding well with the investment made over the last three years in centralised IT and booking systems and the integration experience the Group has gained, ensuring that the incoming sites can be integrated efficiently, and immediately benefit from the Group's economies of scale.

In January 2020, a new 5 year GBP23 million loan facility was agreed with HSBC. The new facility is on the same terms and replaces the GBP18 million 5 year loan facility agreed in 2017 also with HSBC and with an interest rate of 2.45% + LIBOR, providing the Company with additional headroom to support its commercial objectives.

Further to the announcement made on 18 December 2019, the acquisition of the Bratislava and Warsaw Hostels from Dreamgroup Management E.C.P. Ltd for a total consideration of EUR2.7 million has been completed. The completion of the acquisition of the third hostel of the Dream portfolio, which is located in Prague, will take place in the next weeks.

Outlook

The financial performance and the investment made in 2019 has created real momentum going into 2020. While still very early in the year, performance in the first month of 2020 and forward bookings for Q1 are very encouraging, a positive signal for the coming year, which will also benefit from the acquisitions made last year.

Current Network

 
          Region                   Location           Beds    Leasehold/Freehold 
            UK              Edinburgh                 618     Finance lease 
                            Glasgow*                  200     Freehold 
                            London "Kensington        345     Finance lease 
                             Holland Park" 
                            London "Elephant and      491     Finance lease 
                             Castle" 
                            York                      151     Freehold 
                           ========================  ======  =================== 
          Europe            Athens                    132     Leasehold 
                            Barcelona "Passeig        380     Leasehold 
                             de Gràcia" 
                            Barcelona "Gothic         132     Leasehold 
                             Quarter" 
                            Barcelona "Sea"           96      Leasehold 
                            Berlin*                   168     Leasehold 
                            Bratislava                124     Leasehold 
                            Brussels*                 196     Leasehold 
                            Lisbon                    150     Leasehold 
                            Madrid                    228     Leasehold 
                            Pisa                      171     Freehold 
                            Prague "Charles Bridge"   150     Leasehold 
                            Vienna*                   137     Leasehold 
                            Warsaw                    158     Leasehold 
                           ========================  ======  =================== 
     Total Operating                  18              4,027 
                           ========================  ======  =================== 
                            Prague "Museum" (Q1       204     Leasehold 
                             2020) 
                            Paris (2020)              246     Leasehold 
                            Venice (2022)             660     Freehold (JV) 
                           ========================  ======  =================== 
 Total under development               3              1,110 
                           ========================  ======  =================== 
      Total Network                   21              5,137 
                           ========================  ======  ===================

*bed stock after completion of the conversion / renovation in Vienna, Brussels, Glasgow and Berlin, all due to complete in Q1 2020

Enquiries

 
 Safestay plc                                  +44 (0) 20 8815 1600 
 Larry Lipman 
 
 Liberum Capital Limited 
 (Nominated Adviser and Broker)                +44 (0) 20 3100 2000 
 Andrew Godber/Edward Thomas/Laura Hamilton 
  Novella                                       +44 (0) 20 3151 7008 
 Tim Robertson 
 Fergus Young

For more information visit our:

Website www.safestay.com

Vox Markets page https://www.voxmarkets.co.uk/company/SSTY/news/

Instagram page www.instagram.com/safestayhostels/

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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