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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Safestay Plc | LSE:SSTY | London | Ordinary Share | GB00BKT0J702 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 19.00 | 18.00 | 20.00 | 19.00 | 19.00 | 19.00 | 0.00 | 07:45:38 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Hotels And Motels | 19.15M | -282k | -0.0043 | -44.19 | 12.35M |
From Apr 2019 to Apr 2024
TIDMSSTY
RNS Number : 4851J
Safestay PLC
12 September 2016
Safestay plc
("Safestay" or "the Company" or "the Group")
Interim Results
For the Six Months to 30 June 2016
Safestay (AIM: SSTY), the owner and operator of a new brand of contemporary hostel, announces its unaudited interim results for the six months ended 30 June 2016
Operational Highlights
-- Average bed price stable at GBP18 per night, within the current range of GBP18-20, and expected to be stable through to year-end
-- Introduction of direct booking channel which is performing ahead of expectations; ranked 2(nd) as on-line revenue channel in terms of revenue in the business
-- Excellent guest satisfaction scores in line with premium positioning -- Capturing c.1000 guest records/week strengthening the Brand marketing activity -- Successful transition to new Group property management system and multi-property web site
-- Pleasing like-for-like growth at our Elephant & Castle site offset by short term headwinds facing our Holland Park hostel
Financial Highlights
-- Over twofold increase in revenues in H1 2016 to GBP3.29m (H1 2015: GBP1.40m)
-- Restructure of breakfast offer and focus on ancillary revenues has seen H1 non-accommodation revenues move from 4% to 11% of total revenues on a like-for-like basis across Elephant & Castle and York
-- Strong increase in EBITDA in H1 2016 to GBP0.78m (H1 2014: GBP0.26m)
-- The portfolio of hostels are a mix of freeholds and a leasehold with the freeholds externally valued at GBP32.6m. Elephant & Castle revalued at GBP16.0m on 21 July 2016 adding a further GBP3.7m to the total portfolio valuation
-- Net asset value per share increased by 14.2p to 58.0p at the period end (2015: 43.8p)
Larry Lipman, Chairman of Safestay, said:
"The business is progressing well, like-for-like revenues and margins are improving and we have now successfully put in place the systems and infrastructure to support multiple hostels as part of our growth planning.
We are building a premium hostel brand and are gratified that our customer feedback shows the increasing understanding of Safestay's premium positioning. Notwithstanding the current trading headwinds impacting the London market, and more directly Holland Park, the Board remain confident in our outlook with 2016 full-year EBITDA projected to be at the lower end of our expectations. We continue to see opportunity for expansion and to seek new sites amongst the principal western gateway cities of Europe."
Enquiries
Hot Features
Premium
+44 (0) 20 8815
Safestay plc 1600
Larry Lipman, Chairman
Canaccord Genuity Limited +44 (0) 20 7523
(Nominated Adviser and Broker) 8000
Bruce Garrow
Chris Connors
Ben Griffiths
Novella
+44 (0) 20 3151
Tim Robertson 7008
Toby Andrews
For more information visit: www.safestay.com
Chairman's statement
Introduction
I am pleased to present the unaudited interim results of Safestay plc for the six months to 30 June 2016. We have made good progress, more than doubling the revenues of the Group and investing in the systems and infrastructure so that we can now efficiently support multiple hostels.
Our hostels in London Elephant & Castle, London Holland Park, York and Edinburgh, with a portfolio bed count of over 1,500, positions Safestay as the UK's leading premium tourist hostel business. I am particularly satisfied with the quality of our fledgling hostel group in terms of location, real estate and standard of customer offering. These fundamentals underpin our business, as a premium hostel brand.
The European tourism market has been facing some headwinds through 2016 driven primarily by acts of terrorism, softening economies and political instability which has notably had a well reported impact on London's hospitality sector performance. The Group's exposure to this market, with two hostels, compounded by Holland Park being a new entrant, has created a drag on the 2016 performance. It is encouraging to note Elephant & Castle is recording like-for-like revenue growth of 4.5% against this challenging backdrop and I remain confident Holland Park will reach our expected trading performance within the original target three year maturation period.
Operational Review
I am particularly pleased that the teams have improved our operational efficiency and grown EBITDA as a percentage of revenues in all our hostels. This positions the business well to capitalise on strengthening revenues as the London market returns to more normal trading conditions.
Elephant & Castle saw revenues grow 7.7% and EBITDA by 31.1%, York's revenues grew by 0.6% and EBITDA by 51.5% and Edinburgh, against pre-acquisition unaudited numbers, grew revenues by 2.2% and EBITDA by 16.8%. It is particularly encouraging to see efficiency gains across these hostels ahead of the growth in revenue.
The refurbishment of the Edinburgh hostel, which was undertaken in the low season allowing the business to trade through, is now complete. This activity had an impact on the trading performance in H1, despite which the business grew revenues year on year. Now the works are complete the interim branding of Smart City Hostels by Safestay will be phased out during H2 2016 simplifying brand communications going forward. From a guest perspective, across the Group the net promoter score of over 1,500 guests was 45, up from 42 for H2 2015. This is a very positive absolute score and an improving trend. Holland Park consistently rates highest in our portfolio for guest satisfaction.
Elephant & Castle has seen non-accommodation revenues jump from 4% to 11% of total revenue from H1 2015 to 2016. This is a result of moving to charging for breakfasts and focusing on group food and ancillary revenues. The hostel's improving efficiencies mean the additional revenues have been delivered without new cost. The area around Elephant and Castle continues to improve as it benefits from significant investment in regeneration, and demand from groups and individual travellers remains encouraging. These fundamentals underpin both the trading outlook for the hostel and the growth in real estate value.
York is seeing strong improvement in EBITDA against modest revenue growth. Robust revenue management has seen the strongest average bed rates in the Group over the popular weekends through Q2. The mid-week groups business continues to build and the hostel is on track to deliver its projected mature trading numbers.
Holland Park is still within its first year of trading and the business is being efficiently run and delivering high levels of guest satisfaction. Revenues are building but at the lower end of management's expectations which is influencing the overall Group performance. Significant focus is being directed to accelerate the maturation process including the reconfiguration of the accommodation to enable greater conversion of group enquiries. We remain confident this hostel will achieve its projected trading potential within the three year build-up period.
H1 2016 saw the execution of a major systems project which was delivered successfully through January and February. There were three elements to the project; the finalisation of the multi-property web site, the development of a direct internet booking engine and the changeover to a new Group wide property management system.
The website is performing well with the overall conversion percentage sitting favourably to industry averages. A number of digital marketing initiatives have been implemented through the period to drive quality traffic to the site and improve conversion. The tools are in place to measure the ROI and target future investment.
The launch of the new internet booking engine (IBE) has been particularly successful with it performing as the Group's #2 web based channel within 3 months of being launched. IBE conversion rates are ahead of industry norms and further analysis and improvements are being made to build on this encouraging start in building Safestay's direct channel strategy. As importantly, the Group is harvesting valuable guest data and business insights are steering sales and marketing investment to further grow the direct channel and drive revenues and profitability.
The new Group property management system (PMS) is at the heart of the business and provides a platform for operating, understanding, driving and ultimately growing the business. This is transformational for the Group and will continue to add value as it supports the Group's operational, growth and sales and marketing activities.
The Group remains active in seeking new opportunities in target gateway cities. Maintaining the quality of the portfolio and acquiring in the right locations at the right price are key fundamentals that will be followed. The Group incurred aborted acquisition costs of GBP0.14m which will be incurred in H2.
Financial Review
For the period under review, the Company generated revenues of GBP3.29m (2015*: GBP1.40m), the Group recorded an EBITDA of GBP0.78m (2015*: GBP0.26m) and a loss before tax of GBP0.49m (2015*: loss of GBP0.25m).
As a consequence, the Group reported a loss per share after tax of 1.43p (2015* loss: 2.61p).
* Note that the comparable figures for 2015 are not like-for-like as they exclude Edinburgh (acquired September '15) and Holland Park (opened August '15) but do include costs associated with pre-opening of Holland Park.
During H1 the Group invested in implementing a new systems infrastructure which has delivered a platform and team that are now capable of supporting a much bigger portfolio at only a marginal increase in cost, positioning us well for future growth.
As at 30 June 2016, the Company had gross bank and loan note borrowings of GBP18.16m (30 June 2015: GBP9.12m) secured against its freehold properties with an average weighted interest cost of 3.85% (30 June 2015: 4.5%).
The Company has three freehold properties and one leasehold property. As at 30 June 2016, its freehold property portfolio was valued at GBP32.63m, which was increased by GBP3.74m following the revaluation of Elephant & Castle in July 2016 on the back of this site's strong operating performance.
The Holland Park property, in accordance with IAS 17, continues to have the lease accounted for as a finance lease arrangement (see notes 1 and 7). Over the 50 year lease period and using a discount rate of 6.5% the capitalised value of the lease is GBP10.4m.
Net asset value per share increased by 14.2p to 58.0p at the period end (2015: 43.8p).
The Board is not declaring the payment of an interim dividend.
Outlook
Our ambition is to become the leading premium pan-European hostel group and we continue to look for opportunities to grow the business. We have the systems and infrastructure in place and we are very focused on achieving this aim.
Notwithstanding the softer London market and the headwinds facing our Holland Park site, there is plenty of encouragement in the business performance and we remain confident in the outlook for 2016 and beyond. We look forward to reporting on further progress as this fledgling business continues to grow.
Larry Lipman
Chairman
12 September 2016
Condensed consolidated
income statement Unaudited Unaudited Audited
6 months 6 months
to to Year to
30 June 30 June 31 December
2016 2015 2015
Note GBP000 GBP000 GBP000
---------- ---------- ------------
Revenue 1 3,288 1,400 4,023
Cost of sales (413) (145) (486)
Gross profit 2,875 1,255 3,537
Administrative expenses (2,685) (1,227) (3,327)
Operating profit 191 28 210
EBIT
------------------------------- ----- ---------- ---------- ------------
EBITDA* 784 258 661
Depreciation and amortisation 593 230 451
---------- ---------- ------------
Operating profit 191 28 210
------------------------------- ----- ---------- ---------- ------------
Finance income - 1 1
Finance costs (789) (278) (821)
Loss profit before tax (598) (249) (610)
Tax 107 - (8)
---------- ---------- ------------
Loss for the financial
period attributable to
owners of the parent
company (491) (249) (602)
========== ========== ============
Basic earnings/(loss)
per share in pence 2 (1.43) (2.61) (2.52)
Diluted earnings/(loss)
per share in pence 2 (1.43) (2.61) (2.52)
The revenue and operating result for the periods is derived from acquired and continuing operations in the United Kingdom
* Earnings before interest, tax, depreciation and amortisation
Condensed consolidated
statement of comprehensive
income Unaudited Unaudited Audited
6 months 6 months
to to Year to
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
---------- ---------- ------------
Loss for the period (491) (249) (602)
---------- ---------- ------------
Other comprehensive income
Items that will not be
reclassified to profit
and loss
Revaluation of freehold
land and buildings 3,876 33 152
---------- ---------- ------------
Total comprehensive income
for the period attributable
to owners of the parent
company 3,385 (216) (450)
========== ========== ============
Condensed consolidated
statement of
financial position Unaudited Unaudited Audited
30 June 30 June 31 December
2016 2015 2015
Note GBP000 GBP000 GBP000
---------- ---------- ------------
Non-current assets
Property, plant and
equipment 4 45,959 27,881 42,327
Intangible assets 5 1,282 - 1,352
Goodwill 525 - 525
---------- ---------- ------------
Total non-current assets 47,765 27,881 44,204
---------- ---------- ------------
Current assets
Stock 94 2 19
Trade and other receivables 933 508 594
Deferred tax 209 21 -
Derivative financial
instruments 13 6 20
Cash and cash equivalents 1,398 842 1,060
Total current assets 2,647 1,379 1,693
---------- ---------- ------------
Total assets 50,412 29,260 45,897
---------- ---------- ------------
Current liabilities
Loans 6 689 387 693
Finance lease obligations 7 32 37 65
Trade and other payables 1,930 1,427 1,062
Deferred tax 102 - -
2,753 1,851 1,820
---------- ---------- ------------
Non-current liabilities
Bank loans, finance
lease and convertible
loan notes 6 17,467 8,555 17,391
Finance lease obligations 7 10,283 10,377 10,196
Derivative financial
instruments 60 45 36
---------- ---------- ------------
Total non-current liabilities 27,810 18,977 27,623
---------- ---------- ------------
Total liabilities 30,563 20,828 29,443
---------- ---------- ------------
Net assets 19,849 8,432 16,454
========== ========== ============
Equity
Share capital 7 342 192 342
Share premium account 14,504 6,410 14,504
Merger reserve 1,772 1,772 1,772
Share-based payment
reserve 35 11 23
Revaluation reserve 4,233 239 358
Retained earnings (1,037) (192) (545)
---------- ---------- ------------
Total equity attributable
to owners of the parent
company 19,849 8,432 16,454
========== ========== ============
Condensed consolidated
statement of cash
flows Unaudited Unaudited Audited
6 months 6 months
to to Year to
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
------------- ------------- -------------
Loss before tax (598) (249) (610)
Adjustment for:
Depreciation 523 235 451
Amortisation 70 - -
Finance costs 789 278 821
Finance income - (1) (1)
Share-based payments charge 12 6 17
Changes in working capital:
Decrease in stock (76) 2 (15)
Increase in trade and
other receivables (339) (341) (420)
Increase in trade and
other payables 1,162 762 400
Net cash generated
from operating activities 1,543 692 643
------------- ------------- -------------
Cash flows from investing
activities
Interest received - 1 1
Purchase of property,
plant and equipment (279) (12,821) (4,082)
Acquisition of business - - (14,150)
Net outflow from investing
activities (279) (12,820) (18,231)
------------- ------------- -------------
Cash flows from financing
activities
New loans - 11,434 10,500
Loan arrangement fees - - (81)
Issue of ordinary
shares for cash - - 8,535
Fees relating to share
issue costs - - (1,041)
Dividend paid - (58) (58)
Interest paid (404) (553) (620)
Loan repayments (193) (1,164) (1,897)
Lease paid (330) - -
Net cash inflow from
financing activities (927) 9,659 15,381
------------- ------------- -------------
Net increase in cash
and cash equivalents 337 (2,468) 3,310
Cash and cash equivalents
at beginning of period 1,060 3,310 (2,250)
------------- ------------- -------------
Cash and cash equivalents
at end of period 1,397 842 1,060
============= ============= =============
Consolidated Statement of Changes in Equity
For the six months to 30 June 2016 (unaudited)
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 at
31 December
2015 342 14,504 1,772 23 358 (545) 16,454
Comprehensive
income
Loss for the
year - - - - - (492) (491)
Other comprehensive
income - - - - 3,875 - 3,876
-------- -------- -------- -------- ----------- --------- --------
Total comprehensive
income - - - - 3,875 (492) 3,385
-------- -------- -------- -------- ----------- --------- --------
Transactions
with owners
Issue of shares - - - - - - -
Dividend paid - - - - - - -
Share based
payment charge
for the period - - - 12 - - 12
-------- -------- -------- -------- ----------- --------- --------
Balance at
30 June 2016 342 14,504 1,772 35 4,233 (1,037) 19,849
======== ======== ======== ======== =========== ========= ========
For the six months to 30 June 2015 (unaudited)
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 at
31 December
2014 192 6,410 1,772 6 206 115 8,701
Comprehensive
income
Loss for the
year - - - - - (249) (249)
Other comprehensive
income - - - - 33 - 33
-------- -------- -------- -------- ----------- --------- --------
Total comprehensive
income - - - - 33 (249) (216)
-------- -------- -------- -------- ----------- --------- --------
Transactions
with owners
Issue of shares - - - - - - -
Dividend paid - - - - - (58) (58)
Share based
payment charge
for the period - - - 5 - - 5
-------- -------- -------- -------- ----------- --------- --------
Balance at
30 June 2015 192 6,410 1,772 11 239 (192) 8,432
======== ======== ======== ======== =========== ========= ========
For the year ended 31 December 2015 (audited)
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 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
-------- -------- -------- -------- ----------- --------- --------------
Balance at
31 December
2015 342 14,504 1,772 23 358 (545) 16,454
======== ======== ======== ======== =========== ========= ==============
1. Basis of preparation and accounting policies
The condensed interim consolidated financial statements of the Company and its subsidiaries ("the Group") for the 6 months to 30 June 2016 ("the period") have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) as adopted by the European Union. The financial information presented above does not constitute statutory financial statements as defined by section 435 of the Companies Act 2006.
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.
These condensed interim financial statements have not been audited, do not include all of the information required for full annual financial statements and should be read in conjunction with the Group's consolidated annual financial statements for the period ended 31 December 2015. While the financial figures included within this interim report have been computed in accordance with IFRS applicable to interim periods, this report does not contain sufficient information to constitute an interim financial report as set out in International Accounting Standard 34 Interim Financial Reporting.
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.
Intangible assets
Intangible assets are initially recognised and measured at fair market value.
Where an intangible has a determinable finite useful life, the intangible asset is amortised on a straight-line basis over that useful life. The applicable useful life is 11 years for the life of the interest in the head lease.
2. Earnings per share Unaudited Unaudited Audited
6 months 6 months
to to Year to
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
---------- ---------- ------------
(Loss)/Profit for the
period attributable to
equity holders of the
company (491) (249) (602)
========== ========== ============
Weighted average number
of ordinary shares for
the purposes of basic
(loss)/ earnings per share 9,622 9,622 9,622
Effect of dilutive potential
ordinary shares - 6,545
---------- ---------- ------------
Weighted average number
of ordinary shares for
the purposes of diluted
(loss)/ earnings per share
('000's) 34,219 9,622 30,426
---------- ---------- ------------
Basic (loss)/ earnings
per share (1.43p) (2.61p) (2.52p)
---------- ---------- ------------
Diluted (loss)/ earnings
per share (1.43p) (2.61p) (2.52p)
---------- ---------- ------------
3. Dividend
No interim dividend has been declared.
4. Property, plant
and equipment
For the period from 1 January 2016 to 30 June 2016
(unaudited)
Freehold Leasehold Fixtures,
land and land and fittings
buildings buildings and equipment Total
GBP000 GBP000 GBP000 GBP000
----------- ----------- --------------- -------
Cost or valuation
At 1 January 2016 28,764 12,793 1,055 42,612
Additions 128 - 151 279
Revaluations 3,739 - 3,739
----------- ----------- --------------- -------
At 30 June 2016 32,631 12,793 1,206 46,630
----------- ----------- --------------- -------
Depreciation
At 1 January 2016 - 71 215 286
Charge for the period 142 126 255 523
Revaluations (137) - - (137)
----------- ----------- --------------- -------
At 30 June 2016 5 197 470 672
----------- ----------- --------------- -------
Net book value
30 June 2016 32,626 12,596 736 45,958
=========== =========== =============== =======
For the period from 1 January 2015 to 30 June 2015
(unaudited)
Freehold Leasehold Fixtures,
land and land and fittings
buildings buildings and equipment Total
GBP000 GBP000 GBP000 GBP000
----------- ----------- --------------- -------
Cost or valuation
At 1 January 2015 14,921 - 113 15,034
Additions - 13,011 67 13,078
Revaluations (42) - - (42)
----------- ----------- --------------- -------
At 30 June 2015 14,879 13,011 180 28,070
----------- ----------- --------------- -------
Depreciation
At 1 January 2015 - - 34 34
Charge for the period 75 130 25 230
Revaluations (75) - - (75)
----------- ----------- --------------- -------
At 30 June 2015 - 130 59 189
----------- ----------- --------------- -------
Net book value
30 June 2015 14,879 12,881 121 27,881
=========== =========== =============== =======
For the period from 1 January 2015 to 31 December
2015 (audited)
Freehold Leasehold Fixtures,
land and land and fittings
buildings buildings and equipment Total
GBP000 GBP000 GBP000 GBP000
----------- ----------- --------------- -------
Cost or valuation
At 1 January 2015 14,921 - 113 15,034
Additions 1,068 12,793 742 14,603
Acquisitions 12,775 - 200 12,975
----------- ----------- --------------- -------
At 31 December 2015 28,764 12,793 1,055 42,612
----------- ----------- --------------- -------
Depreciation
At 1 January 2015 - - 34 34
Additions 152 71 180 403
Charge for the period (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
=========== =========== =============== =======
At 30 June 2016, the carrying value of the Group's freehold and leasehold property including fixtures and fittings was GBP45,958,000 (30 June 2015: GBP27,881,000, 31 December 2015: GBP42,327,000)
The directors valued the freehold properties using external valuations prepared by Edward Symmons LLP for the York property and Colliers International for the Edinburgh property which were undertaken in 2014 and 2015 respectively. The valuation for Elephant & Castle was undertaken by Cushman & Wakefield LLP on behalf of the Group's bankers, Coutts & Co, in 2016 as part of the Group's potential acquisition activity.
The valuations are based on the discounted cash flows technique with a capitalisation rate of between 6.75% and 8% capitalisation rate and a discount rate of between 8.75% and 10%, depending on the property applied to forecasts of future earnings before interest, taxation and depreciation (EBITDA). The revaluation surplus net of applicable deferred income taxes was credited to other comprehensive income and is shown in revaluation surplus.
Leasehold land and buildings additions comprise the capitalised finance lease plus refurbishment costs incurred on the Holland Park hostel.
The historical cost of freehold property is GBP28,892,000 (30 June 2015: GBP17,281,000, 31 December 2015: GBP27,764,000).
The Group has pledged freehold property with a carrying value of GBP32,626,000 (30 June 2015: GBP14,879,000, 31 December 2015: GBP28,764,000) to secure banking facilities and loan notes granted to the Group.
5. Intangible Asset Unaudited Unaudited Audited
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
Cost
At beginning of period 1,400 - -
Acquisitions - - 1,400
---------- ---------- ------------
At end of period 1,400 - 1,400
---------- ---------- ------------
Amortisation
At beginning of period 48 - -
Charge for the period 70 - 48
---------- ---------- ------------
At end of period 118 - 48
---------- ---------- ------------
Net book value
At end of period 1,282 - 1,352
========== ========== ============
On the acquisition of the business on Smart City hostel in Edinburgh the Director's identified an intangible asset in relation the lease with the University of Edinburgh, which terminates in 2027.
6. Loans Unaudited Unaudited Audited
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
---------- ---------- ------------
At amortised cost
Bank loans 14,356 6,320 14,549
Convertible loan notes 3,800 2,800 3,800
18,156 9,120 18,349
Unamortised Borrowing
costs (230) (178) (265)
---------- ---------- ------------
17,926 8,942 18,084
---------- ---------- ------------
Loans repayable within
one year 689 387 693
Loans repayable after
more than one year 17,237 8,555 17,391
---------- ---------- ------------
17,926 8,942 18,084
---------- ---------- ------------
The repayment profiles of the loans as at 30 June 2016, 30 June 2015 and 31 December 2015 are as follows:
For the period from 1 January 2016 to 30 June 2016
(unaudited)
Convertible
loan notes Bank loans Total
GBP000 GBP000 GBP000
------------ ----------- -------
Due within one year 2,800 755 3,555
Between one and two years 1,000 755 1,755
Between two and five years - 12,846 12,846
After more than five years - - -
------------ ----------- -------
Balance at 30 June 2015 3,800 14,356 18,156
------------ ----------- -------
For the period from 1 January 2015 to 30 June 2015
(unaudited)
Convertible
loan notes Bank loans Total
GBP000 GBP000 GBP000
------------ ----------- -------
Due within one year - 350 350
Between one and two years - 350 350
Between two and five years 2,800 5,620 8,420
After more than five years - - -
------------ ----------- -------
Balance at 30 June 2015 2,800 6,320 9,120
------------ ----------- -------
For the period from 1 January 2015 to 31 December
2016 (audited)
Convertible
loan notes Bank loans Total
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
After more than five years - - -
------------ ----------- -------
Balance at 30 June 2015 3,800 14,549 18,349
------------ ----------- -------
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 30 June 2016.
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.
All of the Group's loans disclosed above comprise borrowings in sterling.
7. Obligations under Finance
Leases Unaudited Unaudited Audited
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
---------- ---------- ------------
Amounts payable under
finance leases:
Within one year 32 37 65
In the second to fifth
years inclusive 169 162 158
After five years 10,114 10,215 10,038
---------- ---------- ------------
Present value of future
lease obligations 10,315 10,414 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.
8. Share Capital Unaudited Unaudited Audited
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
---------- ---------- ------------
Allotted, issued and fully
paid
34,219,135 Ordinary Shares
of 1p each (30 June 2015:
19,244,519, 31 December
2015: 34,219,135) 342 192 342
---------- ---------- ------------
At the 31 December 2016, the ordinary shares rank pari passu. There are no changes to the voting rights of the ordinary shares since the balance sheet date. The increase is the result of share issued from 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
IR UGUWWBUPQGQB
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September 12, 2016 02:00 ET (06:00 GMT)
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