Safestay Share Discussion Threads

[smithie6] 29/1/2024 09:58

Borrowing more money rather than less.

That can be viewed in different ways.
Debt is higher than than the cap. value.

[boonkoh] 29/1/2024 08:44

This is solidly set up for 2024.Existing LfL rev and profit growth. Probably on course to do £1-2m PBT in FY24.Edinburgh property will add more rev and profits this year.Refinanced lower interest rates (I make it paying 2-3% less overall?) means another £0.5-0.8m boost to PBT.Overall looking good for at least a £2-4m PBT in FY24 in my opinion.With the extra opportunity being how a big a recovery there is in school group tours.

[smithie6] 26/1/2024 22:02

Do people have confidence in the text in the accounts :-
" at 30 June 2023, accounting net asset value per share was 41.6p"
declared in company's interim accounts ?

Ssty. Money raised via shares. £24.5m
Retained profits. =Minus £14m

(Infers £10m left)
Borrowed £23 million.
Got £7m cash. So, £16m used from the £23m borrowed + £10m left from issuing shares..
.= £26m.

Which could have been used to buy property.

So, unless someone at Safestay has a money printer there is imo no way that the company could own £68m of property. (If it spent that £26m in property & gained £10m that would still only get you to £38m of property, not £68m !!). Even if the company has an undeclared/unsold gain in property due to adding extensions or an increase in prices (doubt that, property is down due to higher % rates not up) I can't see it being £68m in reality.

I don't believe the valuation of £26.8m for Elephant & Castle, which is leasehold, not freehold. Is there any rubbery accounting to get that valuation? ( it is not owned by SSTY, & hence SSTY has no right to sell it, again adding clouds to its valuation).
Apparently some sale & leaseback deal was done in 2017, & since then the co. claims it's value as an asset.
Does anyone understand the 2017 deal & the valuation for Elephant & Castle ?

So, I think the claimed 41p NAV is not true.
The "accounting net asset value per share was 41.6p" happens to be almost exactly the same as the value given to Elephant & Castle (leased not owned), if remove that then the NAV goes to

0 !!

Which is the best you could expect imo if you look at the amount of money raised & retained profits of minus £14m, & loans etc.

Imo the phrase being written as "accounting net asset value" is also worrying imo. I think I have never seen that word "accounting" being added before NAV by any other company in their accounts. It infers to me that phps it is not real. I think it is not real.

What do other ppl think ?

[catch007] 17/10/2023 18:36

Its a good location in Edinburgh well situated and I am certain occupancy levels will be high once the development is complete. Tourist accommodation is very expensive in the city and the current Airbnb lets are being hammered by the council licence charges. This should create an attractive room rate and high usage. Investors have missed the Airbnb issues and the company is well placed to take full advantage of the opportunity it provides.

[battlebus2] 17/10/2023 18:14

👍. Good to hear. GTC will come good IMHO

[hybrasil] 17/10/2023 11:48

battlebus2 we like the same quirky things. I have for me a large holding in getech!

[battlebus2] 16/10/2023 09:10

Great to see us back In Edinburgh. Should prove very successful as it’s a top destination and we know the City well.

[boonkoh] 16/10/2023 08:29

They really should have provided a Q3 trading update and a cash update situation.Clearly things going well otherwise they wouldn't have splashed out a big chunk of cash for an acquisition. Along with the capex required for the next 12 months to get Edinburgh operational.CFO being lazy not wanting to put in the work to issue a financial trading update with this announcement.

[battlebus2] 27/9/2023 18:21

I wasn’t disappointed, lots of headroom for more growth.

[hybrasil] 27/9/2023 13:09

There has been a seller for some time.

I agree the result blow out no lights!

I am, for me, a big holder here, and was disappointed with the figures.

Going to go and stay in one or two in Europe just to see

[boonkoh] 26/9/2023 19:52

No comments on today's results?Looks like someone was keen to sell, but this was absorbed nicely by the market makers, so it looks like someone else was happy to build a stake.Results disappointing, they didn't keep a control of costs at all. Not acceptable given the favourable backdrop of increased occupancy, revpar.Still heavily asset backed. And looks like H2 at least should be profitable, given the continued increase in revpar and also occupancy rates. But not blowing the lights out.Think this will find a new level higher, once the seller has gone. But IMO still will trade at a huge discount to NAV until they can demonstrate a healthy operating margin.

[hybrasil] 22/8/2023 16:22

We will get the results here in 3 or 4 weeks. Judging by hostelworld I think they are going to be stellar.

Hopefully they will have a star like affect on the share price

[battlebus2] 20/7/2023 19:21

Let’s hope so.

[hybrasil] 20/7/2023 18:54

If the share price was merely to reflect the cash raised since 2014 it would be about 50% higher than today.

That would give about 45p. I,of course am targeting a lot more than that!

[battlebus2] 20/7/2023 16:20

Moving well today.

[hybrasil] 20/7/2023 15:33

I suspect that Mr Lipman will have a very positive trading update for us on tuesday

[hybrasil] 23/6/2023 16:31

Bought some more today

[smithie6] 13/6/2023 12:03

in the related party section (note ~22 in accounts) of 2021 accounts there is no mention of LL owning a building, as you claim in your post.
(the final final report for 2022 is not published yet so we should use the 2021 FFR for initial info on related parties transactions)

Where did you get/see the info in your post or is it false ?

[battlebus2] 12/6/2023 16:20

Safe stay spun off from safeland

Related party transactions
Larry Lipman owns a leasehold property, the freeholdof which is owned by the Group. During the year, the Group invoiced n i l (2021: Enil) in respect of ground rent on this property. The Group manages a portfolio of properties owned by Larry Lipman. The Group received fees of n i l (2021: £nil) from Mr Lipman in the year.
Safeland Pc holds shares in Safestay Pl with a fair value of €390,000 (2021: £532,000). During the year, the Group received rental income of €63,000 (2021: nil) from Safestay Ltd. Larry Lipman is a director and chairman in Safestay PIc.

[smithie6] 12/6/2023 14:36

and how does the value of a lease , to the renter, change depending its number of remaining years
50, 10, 5, 2, 1 ??

when the lease has 0 time remaining is the value of the lease to the renter then £0 ?

[smithie6] 12/6/2023 14:35

leasehold.

What rights does the leaseholder have to renew the lease when it runs out ?
What rights does the owner have when increasing the lease cost ?
(if the owner knows the profit being made by the leaseholder (phps because of investments in the bld made by the leaseholder) can the owner 'screw' the leaseholder & put up the lease cost by 50% or 100% ?

[battlebus2] 12/6/2023 13:25

Also from the 21 AR but I’d guess those valuations maybe slightly reduced given the market.

ld properties
The Freehold values relates to the 3 following hostels:
— The £3.5 million value of the freehold in York is based on the external valuations as at 31 December 2021 prepared by Cushman and Wakefield. The historic cost carrying value is £2.4 million which is the acquisition price in 2014.
— The freehold of the Glasgow property acquired in October 2019 for £3.2 million and which has undergone renovation for £0.4 million. The £4.9 million value of the freehold in Glasgow is based on the external valuations as at 31 December 2021 prepared by Cushman and Wakefield.
— The hostel in Pisa was acquired in June 2019 for £3 million, of which £2.1 million for the freehold. The £3.5 million value of the freehold in Pisa is based on the external valuations as at 31 December 2021 prepared by Cushman and Wakefield.
COVID-19 rent concessions
The International Accounting Standards Board (IASB) has published 'COVID-19-Related Rent Concessions (Amendment to IFRS 16)' amending the standard to provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification.
The £37.5 million right of use assets all relate to properties operated by the Group as hostels.
Right of use assets as at 31 December 2020
Lease disposal (Barcelona Sea) IFRS 16 lease modification Derecognition of sub-leased asset Right of use assets as at 2021
Leasehold, land and buildings
42,048
(1,610) (2,891) (640) 36,907
The Group has used external valuations on Elephant & Castle. The London Elephant & Castle leasehold was independently valued on 31 December 2021 at £26.8 million. The valuation was performed by Cushman and Wakefield. The Group has accounted for the finance transactions as interest-bearing borrowings secured on the original properties held.
Leasehold improvements
Leasehold improvements comprise the capitalised refurbishment costs incurred by the Company on the leased properties.
Valuation process
Initially market values of the properties were believed to have fallen due to the impact of COVID-19. The directors wanted to show that the values of the properties have recovered post COVID-19 so engaged independent external valuers to determine the market value of all three freehold properties and the long leasehold property. These independent external valuers hold recognised and relevant professional qualifications and have recent experience in the location and category of the properties being valued.
The Group provides information to valuers, including profit and cashflow forecasts along with asset-specific business plans. The valuers use this and other inputs including market transactions for similar properties to produce valuations. These valuations and the assumptions they have made are then discussed and reviewed with the management as well as the directors. Cushman & Wakefield were engaged to value properties now valued at £38.7m.
Valuation fees are a fixed amount agreed between the Group and the valuers in advance of the valuation and are not linked to the valuation output.
Valuation methodology
The value is assessed by adopting the income approach to valuation adopting a discounted cashflow approach. Under this approach it is assumed that the property is held for a period of 10 years and the net present value of the earnings during this period are added to the exit value which is discounted to present day values. Adopting an income approach also requires the analysis of comparable transactions in the market to assess the rates of returns investors are