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SSTY Safestay Plc

19.00
0.00 (0.00%)
Last Updated: 08:00:23
Delayed by 15 minutes
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 26,082 08:00:23
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Hotels And Motels 19.15M -282k -0.0043 -44.19 12.35M

Safestay PLC Half-year Report (5442N)

25/09/2019 7:01am

UK Regulatory


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TIDMSSTY

RNS Number : 5442N

Safestay PLC

25 September 2019

The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR")

25 September 2019

Safestay plc

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

Interim Results

For the Six Months to 30 June 2019

Safestay (AIM: SSTY), the owner and operator of an international brand of contemporary hostels, announces its unaudited interim results for the six months ended 30 June 2019

Trading Highlights

-- Safestay now has 16 hostels with approximately 4,000 beds (including hostels in Glasgow, Paris and Venice currently under development) across 9 European and 4 UK cities

-- Total revenues increased by 24% to GBP8.1 million (2018: GBP6.5 million) with like for like sales up 4%

   --    Average Bed Rate increased by 6%* to GBP19.5 (2018: GBP18.4) 
   --    Adjusted EBITDA (pre IFRS 16 adjustment) is GBP1.4 million (2018: GBP1.3 million) 
   --    As at 30 June 2019 the Company had GBP8.3 million cash in the bank 

-- The freehold 161 bed Pisa hostel site acquired for GBP3.0 million in June 2019 has traded strongly

   --    F&B sales increased by 31% 

-- New restaurant in Barcelona Passeig de Gracia hostel and completion of the 73-bed extension in Elephant & Castle hostel with a full renovation of the bar area

*Excludes Vienna and Brussels which are currently operating as Hotels and as a result have higher bed rates

H2 2019 and beyond

-- Positive summer trading positions the Company well and the Board expects revenues for the current year to exceed GBP17.0 million and adjusted EBITDA (pre IFRS 16 adjustment) to be in the region of GBP3.8 million

-- 18 September, announced the acquisition of a freehold site in Glasgow for GBP3.15 million currently operating as a 52 bed hotel with the potential to be converted into a 200 bed Safestay hostel following the completion of the purchase in October 2019

-- 23 September, Elephant & Castle hostel was revalued following the 73 bed extension at GBP26.8 million, an increase of GBP10.8 million over the last valuation in 2017, which equates to an NAV increase of 16.7p per share

-- 24 September, announced the execution of an agreement to acquire a 50 per cent stake in a site in Venice which will be converted into a 660 bed hostel, our biggest hostel so far, and operated by Safestay upon completion in 2021

   --    Good prospects for further complementary acquisitions to be funded from existing resources 

Larry Lipman, Chairman of Safestay, said:

"2019 has to date been good for trading seen in the 24% increase in sales for H1 and for expansion with the acquisition of three new hostels which once completed will add 1,000 beds increasing the portfolio by nearly one third. Alongside this, our platform is now established, and we can therefore add to our portfolio without materially adding to our structure or central costs so that our economies of scale will increasingly come into play as we move to our 2020 target of operating 20 hostels.

From a trading perspective, we have yet to see the full benefit from our acquisitions in Vienna, Brussels, Pisa and more recently Glasgow together with the medium-term potential of Paris and Venice. We have also shown the underlying value within our property portfolio with the revaluation of Elephant & Castle to GBP26.8 million, an increase of 67% since 2017.

Safestay is therefore in an enviable position to continue its positive growth trajectory, building a portfolio of well positioned hostels under a premium, contemporary hostel brand"

 
 Safestay plc                       +44 (0) 20 8815 1600 
 Larry Lipman 
 
 Canaccord 
  (Nominated Adviser and Broker)    +44 (0) 20 7523 8150 
 Bobbie Hilliam 
 
 Novella                            +44 (0) 20 3151 7008 
 Tim Robertson 
 Fergus Young 
 
 

For more information visit our:

Website

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

Instagram page www.instagram.com/safestayhostels/

Chairman's statement

Introduction

I am very pleased to present these results for the six months to 30 June 2019 which clearly show our success in maintaining strong operational standards whilst continuing to expand our portfolio and significantly grow our turnover. Alongside this, we have continued to invest to maintain and improve the premium positioning of our hostels.

The Company has traded well across the all-important summer period which means we are on track to deliver a good result for the year with revenues expected to exceed GBP17.0 million and adjusted EBITDA (pre IFRS 16 adjustment) to be in the region of GBP3.8 million.

Financial review

For the period under review, the Group generated a 24% increase in revenues to GBP8.1 million (2018: GBP6.5 million) with GBP2.0 million of revenue coming from acquisitions made in 2018 and 2019. Revenue from non-UK hostels now represent 47% of our total revenue (2018: 39%) and 81% of the revenue is coming from accommodation (2018: 82%) with the balance coming from F&B and ancillary activities.

Adjusted EBITDA (pre IFRS 16 adjustment) increased to GBP1.4 million (2018: GBP1.3 million). EBITDA from hostels (excluding central costs) was stable at GBP2.4 million. The additional contribution from like for like hostels and from the Vienna and Brussels hostels, acquired in Q4 2018, were offset by increases in property related costs including a rise in energy prices and the seasonality of the Barcelona Passeig de Gracia property acquired in April after the quieter season in 2018.

Following investments made in the head office in 2018, the central costs have remained stable in 2019 at GBP1.1 million despite the addition of 3 properties during the same period. The central platform is now established in terms of personnel and systems and we believe is capable of supporting 20 hostels with little incremental cost.

The Group has also implemented the newly introduced IFRS 16 standard (Lease accounting) and decided to opt for the modified approach which does not require restatement of comparative periods. The introduction of the standard means that we are changing the way we report the charges in relation to leaseholds in our consolidated statement of income. The rental expense (GBP1.1 million) is replaced with an interest charge (GBP0.6 million) and depreciation of the leased asset (GBP0.8 million). Consequently, loss before tax of GBP0.9 million (2018: -GBP0.8 million) includes a loss of GBP0.3 million in relation to the introduction of the IFRS 16 standard. It also includes GBP0.3 of exceptional costs in relation to expansion projects. The Company recorded a loss per share of 1.40p (2018: -2.30p per share).

The introduction of IFRS 16 also has an impact on the balance sheet where we recognise a GBP17.8 million right of use asset from 1 January 2019, and lease liability for a similar amount.

As at 30 June 2019 the Company had GBP8.3 million of cash in the bank ensuring the Group can both continue to make selective acquisitions as well as drive operational improvements.

Net asset value per share was 41.8p per share (2018: 53.2p per share) following the issue of 30,459,880 new shares in December 2018 as a result of the successful GBP10.3 million placing.

Operating review

Safestay now operates 3,051 beds in 13 properties across 7 European and 3 UK cities, pending the completion of the Glasgow hotel acquisition in October 2019, and the opening of the Paris and Venice hostels. Revenues increased by 24% in the first 6 months of 2019 with an underlying like for like growth rate of 4%. Safestay has reported an 86% CAGR (Compound Annual Growth Rate) since it was listed in 2014.

Since January 2018 Safestay has opened 4 hostels (Barcelona Passeig de Gracia in April 2018, Vienna and Brussels in October 2018 and Pisa in June 2019). These 4 hostels contributed GBP2.0 million in the first half of 2019 to Group revenues.

The Average Bed Rate (ABR) increased by 16% to GBP21.70 (2018: GBP18.70), however, this includes the Brussels and Vienna sites acquired in 2018 which are not yet fully converted from hotels to hostels and where the average rate is naturally higher than in the rest of the portfolio. Without these two sites, ABR increased by 6% to GBP19.50 (2018: GBP18.40) with similar growth in Europe (+6.1%) and UK (+5.1%) following investment in the revenue management team and system since 2018.

The increase in the bed rates was accompanied with a first half reduction in like for like occupancy rate to 71.1% (2018: 77.1%) reflecting a deliberate yield management decision to favor rates over volume in the UK and Spanish properties and also a softer market in Lisbon and Prague. Importantly, the Company anticipates reversing this trend with occupancy for the full year to be similar to the prior year. In total for H1 the Group sold 302,000 nights up 7% (2018: 284,000).

Since 2018, a common Property Management System (Cloudbeds) has been introduced across all properties. Installed in all new properties, the Cloudbeds system guarantees efficiencies and consistency across all bookings and the collection of valuable data analytics.

Like for like F&B revenue increased by 20% in 2019 following the opening of a rooftop bar in Madrid in June 2018, the renovation of the Elephant & Castle restaurant and general improvements in all other properties. Like for like F&B spend per bed improved by 26% versus H1 2018.

From 2019 we have decided to set aside an annual capex fund equivalent to approximately 4% of our revenue to enhance the quality of our hostels and maintain the standards set by the Safestay brand. In June 2019, the renovation of the restaurant in our Barcelona Passeig de Gracia hostel was completed, our Edinburgh hostel has benefited from a renovation of all bedrooms and currently all bathrooms and public areas are being refurbished in Lisbon.

In January 2019 we also completed the 73-bedroom extension to our Elephant & Castle hostel and took this opportunity to revamp the F&B area. This has proved a very successful project with revenue up 29% in the 5 months following the completion of the extension. This is reflected in the new valuation of the hostel which has increased by GBP10.8 million since 2017, significantly in excess of the GBP2.4 million cost of construction of the extension.

Acquisitions

In June 2019, we acquired a freehold hostel in Pisa for GBP3.0 million. Acquiring an existing, successful hostel has made an immediately positive contribution to EBITDA and give us an interesting bridgehead into Italy where there are many opportunities for further expansion, as illustrated by the recently announced Venice project.

In September 2019, we announced the freehold acquisition of a 52-bedroom trading hotel in Glasgow. The hotel will start trading under the Safestay brand immediately after completion, which is scheduled for October 2019. The full GBP0.3 million conversion into a 200-bed hostel will take place this winter.

Outlook

The second half of the year has begun well, continuing from the solid performance recorded across the portfolio in the second quarter which saw a 7.6% like for like growth in revenues. As usual, reflecting the seasonality of our business, approximately 32% of our annual turnover and 40% of EBITDA is made in the third quarter. In addition, the Group will benefit from a full six months contribution from the Pisa property acquired in June 2019 and two months from Glasgow following the completion of the acquisition in late October 2019.

The focus is on establishing a pan-European network of premium hostels under the Safestay brand in some of the most popular cities to visit in the world. Recognition is growing that staying in a Safestay hostel represents a superior experience offering stylish accommodation in safe, clean surroundings with the option to socialise with other guests but still for only around GBP20 per night.

We look forward to providing further news of the Group's progress.

Larry Lipman

Chairman

25 September 2019

 
 Condensed consolidated statement 
  of comprehensive income                        Unaudited     Unaudited        Audited 
                                                  6 months      6 months        Year to 
                                                to 30 June    to 30 June    31 December 
                                                      2019          2018           2018 
                                        Note        GBP000        GBP000         GBP000 
                                              ------------  ------------  ------------- 
 
 Revenue 6                                 2         8,083         6,509         14,620 
 Cost of sales                                     (1,223)         (764)        (2,228) 
 Gross profit                                        6,860         5,745         12,392 
 Administrative expenses                           (5,972)       (5,303)       (10,686) 
                                              ------------  ------------  ------------- 
 Operating profit before exceptional 
  expenses                                             888           442          1,706 
  EBIT 
 Exceptional expenses                                (336)         (437)          (662) 
                                              ------------  ------------  ------------- 
 Operating profit after exceptional 
  expenses                                 2           552             5          1,044 
 
 Finance costs                                     (1,456)         (795)        (1,648) 
 Loss before tax                                     (904)         (790)          (604) 
 Tax                                                     -             -          (303) 
                                              ------------  ------------  ------------- 
 Total comprehensive loss for 
  the period attributable to owners 
  of the parent company                              (904)         (790)          (907) 
                                              ============  ============  ============= 
 
 
 
 Condensed consolidated statement 
  of 
  financial position                           Unaudited   Unaudited       Audited 
                                                 30 June     30 June   31 December 
                                                    2019        2018          2018 
                                        Note      GBP000      GBP000        GBP000 
                                              ----------  ----------  ------------ 
 Non-current assets 
 Property, plant and equipment                    66,512      46,262        47,522 
 Intangible assets                                 1,244       1,325         1,268 
 Goodwill                                         11,378       9,265        10,506 
 Total non-current assets                         79,134      56,852        59,296 
                                              ----------  ----------  ------------ 
 
 Current assets 
 Stock                                                44          30            45 
 Trade and other receivables                       1,057       1,053         1,200 
 Derivative financial instruments                      -           -             - 
 Cash and cash equivalents                         8,305       2,960         9,859 
 Total current assets                              9,406       4,043        11,104 
                                              ----------  ----------  ------------ 
 
 Total assets7                                    88,540      60,895        70,400 
 
 Current liabilities 
 Borrowings                                          280         423           353 
 Finance lease obligations                 3       2,350          27            28 
 Trade and other payables                          3,178       2,408         1,890 
 Total current liabilities                         5,808       2,858         2,271 
                                              ----------  ----------  ------------ 
 
 Non-current liabilities 
 Borrowings                                       17,545      17,655        17,772 
 Finance lease obligations                 3      37,313      21,187        21,176 
 Other payables                                        -         971             - 
 Deferred tax                                        105           -           105 
 Trade and other payables due in 
  more than one year                                 720           -         1,140 
 Total non-current liabilities                    55,683      39,813        40,193 
                                              ----------  ----------  ------------ 
 
 Total liabilities                                61,491      42,671        42,464 
                                              ----------  ----------  ------------ 
 
 Net assets                                       27,049      18,224        27,936 
                                              ----------  ----------  ------------ 
 
 Equity 
 Share capital                            10         647         342           647 
 Share premium account                            23,904      14,504        23,904 
 Other components of equity                        6,238       6,097         6,221 
 Retained earnings                               (3,740)     (2,719)       (2,836) 
                                              ----------  ----------  ------------ 
 Total equity attributable to owners 
  of the parent company                           27,049      18,224        27,936 
                                              ==========  ==========  ============ 
 

Condensed consolidated statement of changes in equity

For the six months to 30 June 2019 (unaudited)

 
                           Share             Share  Other Components  Retained earnings    Total 
                         capital   premium account         of Equity             GBP000   equity 
                          GBP000            GBP000            GBP000                      GBP000 
                        --------  ----------------  ----------------  -----------------  ------- 
Balance at 1 January 
 2019                        647            23,904             6,221            (2,836)   27,936 
Comprehensive income 
Loss for the period            -                 -                                (904)    (904) 
  Total comprehensive 
   income                      -                 -                 -              (904)    (904) 
                        --------  ----------------  ----------------  -----------------  ------- 
 
Transactions with 
 owners 
Share-based payment 
 charge for the 
 period                        -                 -                17                  -       17 
                        --------  ----------------  ----------------  -----------------  ------- 
  Balance at 30 June 
   2019                      647            23,904             6,238            (3,740)   27,049 
                        ========  ================  ================  =================  ======= 
 

For the six months to 30 June 2018 (unaudited)

 
                              Share             Share  Other Components   Retained    Total 
                            capital   premium account         of Equity   earnings   equity 
                             GBP000            GBP000            GBP000     GBP000   GBP000 
                           --------  ----------------  ----------------  ---------  ------- 
Balance at 1 January 
 2018                           342            14,504             6,081    (1,929)   18,998 
                                342            14,504             1,772    (1,056)   19,837 
Comprehensive income 
Loss for the period               -                 -                 -      (790)    (790) 
  Total comprehensive 
   income                         -                 -                 -      (790)    (790) 
                           --------  ----------------  ----------------  ---------  ------- 
 
Transactions with owners 
Share-based payment 
 charge for the period            -                 -                16          -       16 
                           --------  ----------------  ----------------  ---------  ------- 
  Balance at 30 June 
   2018                         342            14,504             6,097    (2,719)   18,224 
                           ========  ================  ================  =========  ======= 
 

Condensed consolidated statement of changes in equity

For the year ended 31 December 2018 (audited)

 
                                  Share             Share  Other Components  Retained earnings     Total 
                                Capital   premium account         of Equity            GBP'000    equity 
                                GBP'000           GBP'000           GBP'000                      GBP'000 
                               --------  ----------------  ----------------  -----------------  -------- 
Balance at 1 January 
 2018                               342            14,504             6,081            (1,929)    18,998 
                               --------  ----------------  ----------------  -----------------  -------- 
Comprehensive income 
Loss for the year                     -                 -               106              (907)     (801) 
 
  Total comprehensive income          -                 -               106              (907)     (801) 
                               --------  ----------------  ----------------  -----------------  -------- 
Transactions with owners 
Issue of shares                     305             9,400                 -                        9,705 
Share-based payment charge 
 for the year                         -                 -                34                  -        34 
                               --------  ----------------  ----------------  -----------------  -------- 
  Balance at 31 December 
   2018                             647            23,904             6,221            (2,836)    27,936 
                               ========  ================  ================  =================  ======== 
 
 
 Condensed consolidated statement 
  of cash flows                                     Unaudited     Unaudited        Audited 
                                           Note      6 months      6 months        Year to 
                                                   to 30 June    to 30 June    31 December 
                                                         2019          2018           2018 
                                                       GBP000        GBP000         GBP000 
                                                 ------------  ------------  ------------- 
 
 Operating activities 
 Cash generated from operations               5         3,538           972          1,832 
                                                 ------------  ------------  ------------- 
 Net cash generated from operating 
  activities                                            3,538           972          1,832 
                                                 ------------  ------------  ------------- 
 
 Investing activities 
 Purchase of property, plant and 
  equipment                                           (2,774)         (990)        (2,510) 
 Purchase of intangible assets                            (2)          (12)           (24) 
 Acquisition of business                                (872)         (617)        (1,791) 
                                                 ------------  ------------  ------------- 
 Net cash outflow from investing 
  activities                                          (3,648)       (1,619)        (4,325) 
                                                 ------------  ------------  ------------- 
 
 Cash flows from financing activities 
 Repayment of borrowings                                (851)         (127)          (304) 
 Proceeds from issue of share capital                      17             -         10,356 
 Fees related to the issue of shares                        -             -          (652) 
 Amounts paid under finance leases                      (311)         (480)          (960) 
 Interest paid                                          (299)         (290)          (592) 
                                                      (1,444)         (897)          7,848 
                                                 ------------  ------------  ------------- 
 
 Cash and cash equivalents at beginning 
  of period                                             9,859         4,504          4,504 
 Net increase/(decrease) in cash 
  and cash equivalents                                (1,554)       (1,544)          5,355 
                                                 ------------  ------------  ------------- 
 Cash and cash equivalents at end 
  of period                                             8,305         2,960          9,859 
                                                 ============  ============  ============= 
 
 
   1.      ACCOUNTING POLICIES FOR THE GROUP AND COMPANY FINANCIAL STATEMENTS 

Safestay plc is listed on the AIM market of the London Stock Exchange and was incorporated and is domiciled in the UK.

The Group and Company interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs). The financial statements have also been prepared in accordance with IFRSs adopted by the European Union and therefore the Group financial statements comply with Article 4 of the EU IAS regulation.

These condensed interim financial statements have not been audited, do not include all the information required for full annual financial statements and should be read in conjunction with the Group's consolidated annual financial statements for the year ended 31 December 2018.

The financial statements have been presented in sterling, prepared under the historical cost convention, except for the revaluation of freehold properties and certain financial instruments.

The accounting policies have been applied consistently throughout all periods presented in these financial statements. These accounting policies comply with each IFRS that is mandatory for accounting periods ending on 30 June 2019.

New standards and interpretations effective in the year

The following standards were effective from 1 January 2019:

   --    IFRS 16: Leases - effective 1 January 2019 

The adoption of IFRS 16, which replaces IAS 17 Leases, has a material impact on the financial statements of the Group in future periods. The Standard requires recognition of current operating leases to be accounted for within the balance sheet by recognising a new category of right-of-use asset and a liability for future lease payments, discounted to present value. In addition, IFRS 16 replaces the straight-line operating lease expense in the income statement with a depreciation charge for the lease asset (included within operating costs) and an interest expense on the lease liability (included within finance costs). As a result, the EBITDA, as well as the Cash generated from operations reported in the Consolidated Statement of Cash Flows statement have both been increased by an amount equivalent to the operating lease expense previously reported under IAS 17.

   2.            SEGMENTAL ANALYSIS 
 
                                Unaudited     Unaudited        Audited 
                                 6 months      6 months        Year to 
                               to 30 June    to 30 June    31 December 
                                     2019          2018           2018 
                                   GBP000        GBP000         GBP000 
                             ------------  ------------  ------------- 
 Revenue by location 
 United Kingdom                     4,244         3,942          8,393 
 Other Europe                       3,839         2,567          6,227 
                             ------------  ------------  ------------- 
 Total Income                       8,083         6,509         14,620 
                             ------------  ------------  ------------- 
 
 Revenue by nature 
 Hostel accommodation               6,571         5,314         12,171 
 Food and Beverages sales           1,128           864          1,746 
 Other income                         384           331            703 
                             ------------  ------------  ------------- 
 Total Income                       8,083         6,509         14,620 
                             ------------  ------------  ------------- 
  Operating profit 
 United Kingdom                     1,491         1,155          2,981 
 Other Europe                         444           454            801 
 Shared Services                  (1,383)       (1,604)        (2,738) 
                             ------------  ------------  ------------- 
 Total Operating profit               552             5          1,044 
                             ------------  ------------  ------------- 
 

The Group has two operating segments: UK and Europe. The operating segments are organised and managed separately due to the location of each market. The Group provides a shared services function to its operating segments and reports these activities separately.

 
            Adjusted EBITDA: 
                                       Unaudited   Unaudited        Audited 
                                        6 months    6 months 
                                           to 30       to 30        Year to 
                                            June        June    31 December 
                                            2019        2018           2018 
                                          GBP000      GBP000         GBP000 
                                      ----------  ----------  ------------- 
 
 Operating profit                            552           5          1,044 
 Add back: 
 Depreciation & Amortisation               1,614         867          1,676 
 Rental charges (cancelled under 
  IFRS16)                                (1,151) 
 Exceptional & Share based payment 
  expense                                    353         453            696 
 Group Adjusted EBITDA (pre IFRS 
  16 adjustment)                           1,368       1,325          3,416 
 

Shared services are included within the Adjusted EBITDA.

 
 3. LEASES 
  Lease liabilities are presented in the statement of financial 
  position as follows: 
                                                 Unaudited                Unaudited                      Audited 
                                                   30 June                  30 June                  31 December 
                                                      2019                     2018                         2018 
                                                    GBP000                   GBP000                       GBP000 
                                --------------------------  -----------------------  --------------------------- 
 Current                                             2,350             27                                     25 
 Non-current                                        37,313                   21,187                       21,179 
 Total                                              39,663                   21,214                       21,204 
                                ==========================  =======================  =========================== 
                                              The Group has leases for hostels across Europe. With the exception 
                                                 of short-term leases and leases of low-value underlying assets, 
                                                    each lease is reflected on the balance sheet as an asset and 
                                                a lease liability. With the adoption of IFRS16, operating leases 
                                                    under IAS17 are now categorised as a right-of-use asset. The 
                                             Group continues to classify its finance leases as a lease liability 
                                                  and a leasehold land and buildings asset. The Group classifies 
                                                 its right-of-use assets in a consistent manner to its property, 
                                                                                            plant and equipment. 
 
                                              For leases classified as right-of-use assets, each lease generally 
                                                 imposes a restriction that, unless there is a contractual right 
                                            for the Group to sublet the asset to another party, the right-of-use 
                                          asset can only be used by the Group. Leases are either non-cancellable 
                                                 or may only be cancelled by incurring a substantive termination 
                                                      fee. Some leases contain an option to extend the lease for 
                                                a further term. The Group is prohibited from selling or pledging 
                                                   the underlying leased assets as security. The Group must keep 
                                            those properties in a good state of repair and return the properties 
                                                   in their original condition at the end of the lease. Further, 
                                                    the Group must insure items of property, plant and equipment 
                                                     and incur maintenance fees on such items in accordance with 
                                                                                            the lease contracts. 
                                                     The table below describes the nature of the Group's leasing 
                                                      activities by the type of right-of-use asset recognised on 
                                                                                              the balance sheet: 
               Right-of-use       No of         Range      Average      No of      No of      No of        No of 
                   asset       right-of-use      of       remaining    leases      leases     leases      leases 
                                   assets      remaining     lease       with        with       with        with 
                               leased        term        term      extension   options    variable   termination 
                                                                      options       to      payments     options 
                                                                                              purchase    linked 
                                                                                                           to an 
                                                                                                           index 
                                                                          Hostel                          4 - 14 
                  buildings           8           years     10 years        7          0          0            0 
                           -------------  ----------  ----------  ----------  ---------  --------- 
                                                     The lease liabilities are secured by the related underlying 
                                                                           assets. Future minimum lease payments 
                                                                                at 30 June 2019 were as follows: 
                                                                                      Minimum lease payments due 
                                                      Within     1 - 2                  3 - 4    4 - 5     After 
                                            1 year    years    2 - 3 years    years    years    5 years    Total 
                                         --------  --------  ------------  -------  -------  ---------  -------- 
                                                                                                         30 June 
                                                                                                            2019 
                                                                                                           Lease 
                             payments       2,329     2,361       2,368      2,368    2,303     13,338    25,066 
                                                                                                         Finance 
                            charges       (1,170)   (1,087)      (997)      (901)    (798)    (2,820)    (7,773) 
                                                                                                     Net present 
                             values         1,160     1,274       1,371      1,467    1,504     10,518    17,294 
 

The group has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or less) or for leases of low value assets.

 
 4. ACQUISITION IN ITALY 
 

In June 2019, the Group acquired its fourteenth hostel in Pisa, Italy, through an asset purchase with consideration of EUR2.25m and retrospectively a business purchase with consideration of EUR1m. The consideration was paid in full on each Closing Date.

The provisional fair values of assets and liabilities acquired, translated to sterling at a rate of 1.135:

 
 
                                                GBP000 
                                               ------- 
 Property, plant and equipment                   2,167 
 Current assets                                     43 
 Deferred revenue, trade and other payables       (34) 
 Goodwill                                          872 
                                               ------- 
                                                 3,048 
                                               ------- 
 
 
            5. NOTES TO THE CONDENSED CONSOLIDATED STATEMENT OF 
             CASH FLOWS 
                                                Unaudited     Unaudited        Audited 
                                                 6 months      6 months        Year to 
                                               to 30 June    to 30 June    31 December 
                                                     2019          2018           2018 
                                                   GBP000        GBP000         GBP000 
                                             ------------  ------------  ------------- 
 
 Loss before tax                                    (904)         (790)          (604) 
 Adjustments for: 
 Depreciation of tangible assets                    1,588           777          1,538 
 Amortisation of intangible assets                     26            90            161 
 Finance costs                                      1,456           795          1,648 
 Loss on disposal of fixed assets                       -            17             74 
 Share-based payments                                  17            17             34 
 Exchange movements                                  (67)            53          (112) 
 Changes in working capital 
 Stock                                                  -           (7)           (14) 
 Trade and other receivables                          144         (199)          (295) 
 Trade and other payables                           1,278           219          (277) 
                                             ------------  ------------  ------------- 
 Cash generated from operating activities           3,538           972          2,056 
                                             ------------  ------------  ------------- 
 

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(END) Dow Jones Newswires

September 25, 2019 02:01 ET (06:01 GMT)

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