Safestay Share Discussion Threads

[fundfemale] 31/12/2014 10:33

Thank you battlebus2 and all best wishes for a very profitable 2015.

[battlebus2] 31/12/2014 10:09

Great post fundefemale and a tick up to a new high :))

[fundfemale] 30/12/2014 15:23

I have re-assessed the value potential here since the recent Holland Park acquisition and £3.3 million share placing.

The current share price is up around 33% since the IPO at 50p (from EY stats out of 92 IPOS in 2014 – only 16 are trading at 30% over IPO price so we are certainly one of the best performers in this space). The market cap has increased by around 50%.

Total shares in issue prior to December placing) 13,217,246
New shares issued as result of placing 22 December 2014 6,027,272

Total shares in issue 19,244,519

Market cap 13217246 x 0.61 (previous) 8,062,520 GBP
Market cap 19,244,519 x 0.65 12,508,936.70 GBP

Property valuation of Elephant and Castle 12,300,000 GBP
Property valuation of York 2,600,000 GBP

I am very impressed by the Holland Park acquisition.

I know that SSTY state that they wish to be ambitious in acquiring new hostels, – but I would prefer to see location over quantity. I believe it’s a good growth strategy to mix the owned properties with the leasehold ones at this stage too.

I see the Holland Park (380 beds) aquisition as being very complimentary to the Elephant and Castle property (413 beds), especially as E and C gains momentum with its reputation and Safestay with its brand development.

I note from the information available on the previous hostel the ex. YHA building at Holland Park House, is a very attractive grade 1 listed Jacobean building with gardens. It’s a five minute walk from Kensington High Street, Royal Albert Hall, Kensington Palace and the main museums. It’s also easily accessible from Paddington via circle line for overseas visitors.

I have made an annual cash generation estimate based on the fixed costs at E and C.

Annual operating value (potential) of Holland Park 380 beds x 365 days x 80% occupancy x £25 per bed = £2,774,000 turnover x 35% = £ 970,900 per annum potential cash from operations when fully operational (I broadly approximate 35% net based on current Elephant and Castle EBITA and estimated leasehold vs debt costs).

The above annual cash generation I see for Holland Park within 2 years.
Clearly with largely fixed costs – all occupancy and price increases fall directly to the bottom line, so the potential could easily improve significantly (this applies to all properties so any small price increases have larger impact on profitability).

I am very encouraged by the rapid progress made since IPO and see increasing catalysts for accelerated growth.

[a2584728] 17/12/2014 07:43

Yes it was elephant and castle, I just think that people will stay once and then get back to the IBIS and Premier Inn type place for comfort etc. an opinion only of course.

[battlebus2] 17/12/2014 07:08

Placing at 55p and occupancy update.
All good imv.

[battlebus2] 16/12/2014 21:24

That isn't what i wanted to hear, most of the reviews are more than complementary.
Is there anything further you can say about your stay. I take it was the elephant and castle?

[a2584728] 16/12/2014 20:29

I have had a look at these and stayed in one of their hostels in London, I have to say I wasn't very impressed, I think they will struggle to keep up with the budget hotels.

[battlebus2] 11/12/2014 09:42

Turned blue again :))

[battlebus2] 10/12/2014 15:16

Still climbing, it's been a fantastic day here and well over the usual number of trades so i'm guessing a tip or note somewhere. Anyone seen ought??

[battlebus2] 10/12/2014 10:54

Well through to new highs today. Good results from Easyhotel can only have helped.

[battlebus2] 08/12/2014 14:21

Moving sharpish :))

[battlebus2] 01/12/2014 09:47

Yep i suspect it will be disclosed with the next results or news on the financing of said refurbishment.

Luxury hostels operator Safestay PLC on Monday said it has secured a 50-year lease to open a new 380-bed site in Holland Park in West London.


Safestay is to open the hostel in a 24,000 square foot building owned by the Royal Borough of Kensington and Chelsea. It was recently operated as a YHA Hostel, it said.

Once completed, the deal will give Safestay two hotels in central London with nearly 800 beds, it said. The cost of the refurbishment of the building will be around GBP2 million and Safestay said it is currently reviewing financing options.

[hybrasil] 01/12/2014 09:43

Yes - but what an RNS. Rather typical of AIM. Our company has taken a lease in one of the most expensive parts of London and the shareholders are not told any - any of the financial details.

Another good deal by Larry I don't doubt but we should be told what we are paying for it!

[battlebus2] 01/12/2014 07:28

Yep very good news, i thought news was coming :))

[playful] 01/12/2014 07:18

Holland Park.....very posh

[playful] 30/11/2014 14:06

Good review posted yesterday:

hxxp://thehostelgirl.com/review-safestay-london/

Sounds like we have great staff...

"Whilst I was waiting, I noticed a picture frame behind her that announced her achievement as ‘Employee of the Month’, and I could definitely see why. Super helpful and extremely welcoming, meeting Petra at reception was a great start to the stay!"

[battlebus2] 27/11/2014 13:29

Thanks Jeff.

[jeff h] 27/11/2014 13:20

Hardman released a reseach report on Safestay which I guess is the reason for the recent rise...free to access but registration required:-

[battlebus2] 26/11/2014 13:20

A bit of interest over the last few days, maybe news to come.
Anyway ticking up.

[hybrasil] 16/10/2014 10:47

If you look back at the history of safestore you could expect the share price here to fall to the 25/30p range.

Its unusual to have a share that depends on the deal making abilities of one man but that is what you have here.

I have some as a result of my safeland holding but I will wait before buying more

[battlebus2] 10/9/2014 16:06

I agree fundfemale , but I can also see it's not for everyone.

[fundfemale] 10/9/2014 14:48

Substantial increase in overall revenue up 31.8% at Elephant and Castle due to combined effect of 11.5% increase in occupancy and 12.2% rate increase.

Elephant and Castle is proving to be cash cow as well as an attractive piece of real estate in a blossoming area.

York is very interesting, occupancy of just over 50% currently (up from 44% last year), however there is substantial room to grow through re-furbishment and re-branding (average year round hotel occupancy in York is currently 79.5% and actually peaked at 91% in September 2013). Substantial revenue growth with re-branding and the right marketing tactics is clearly very possible here.

This hostel can service visitors to York Exhibition Centre, growing leisure attractions, walking distance of York Racecourse and for concert goers at Central Hall York (1190 seats).

hxxp://mediafiles.thedms.co.uk/Publication/YK/cms/pdf/2013%20summary%20of%20hotel%20occupancy%20in%20York.pdf


I notice Morningstar just highlighting further probable aquisitions.

hxxp://www.morningstar.co.uk/uk/news/AN_1410342512827678600/safestay-expects-portfolio-expansion-as-it-provides-maiden-results.aspx

Net book value looks solid and asset backed. Growing cash generative business.

[battlebus2] 10/9/2014 12:15

The majority of those loan notes are due between 2 and 5 years so plenty of time to improve revenues and profits.
Good luck IC2.

[interceptor2] 10/9/2014 11:45

Thank you jamielein, I did wonder if that was the reason. I had too many things to look at before the market opened, with OPAY and ZYT news, that's the excuse I will use :o)

[jamielein] 10/9/2014 11:40

There are actually just over 13m shares in issue but they used the weighted average number of shares in issue for the period 29th January to 30th June, which was much lower because before 2nd May, most of the shares didn't exist.

I was also slightly confused at first with the EPS figure as it looked too good to be true.

£100k in 2 months is approx £600k/year at the same rate. Market cap approx. £7.6m gives a PE of approx. 12.5.

This doesn't take into account growth in their profit but also doesn't take into account the dilution from the convertible loan notes, which is potentially significant (an extra 4.8m shares or 37.5% extra).

No position.