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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 | 22,000 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Hotels And Motels | 19.15M | -282k | -0.0043 | -44.19 | 12.35M |
From Apr 2021 to Apr 2024
TIDMSSTY
RNS Number : 1334N
Safestay PLC
28 September 2021
28 September 2021
Safestay plc
("Safestay", the "Company" or the "Group")
Interim Results
Safestay (AIM: SSTY), the owner and operator of an international brand of contemporary hostels, is pleased to announce its Interim Results for the 6 months to 30 June 2021.
H1 Trading
-- Safestay operates 16 hostels with approximately 3,218 beds across 11 European and 3 UK cities
-- Due to the COVID-19 pandemic, government enforced trading restrictions meant the hostels were closed for 83% of H1 2021, with reopening commencing from late May. As a result, occupancy was at 19% (based only on hostels while they were open)
-- Total revenues were GBP1.02 million
-- Recorded EBITDAR loss of GBP0.3 million and a profit before tax of GBP3.6 million, which was driven by exceptional items relating to the gain on disposal of Edinburgh
-- Management actions reduced the monthly running costs of the business to GBP0.35 million, down over 60% from pre-COVID-19 levels
-- As at 30 June 2021, net asset value per share was 50.1p per share (2020: 48.2p per share)
-- To ensure the business was able to re-start with a strong financial base, 2 hostels were sold to raise GBP16.8 million:
-- Leasehold in the Barcelona Sea hostel sold on 26 February 2021 for GBP0.8 million
-- Completed sale of the 150-year lease interest in the Edinburgh hostel on 30 June 2021 for GBP16.0 million
Post half-year
-- In July, following the sale of Edinburgh, bank debt was reduced by 35% to GBP18m, and the Group had cash balances of GBP6.3m to support the transition back to being fully operational, with a current balance of GBP5.5m as at 20 September, despite capital investment to support reopening
-- Re-opening of the hostels began in May and by 31 July all 16 hostels were trading, achieving occupancy from primarily domestic customers in July and August of 38% and 43% respectively
-- As at the end of August, GBP1.5m of advanced bookings are held, which includes a pickup in international travel associated with the expected return of major tourist events
Larry Lipman, Chairman of the Company, commenting on the results said:
"Trading in this period was extremely limited with our hostels closed for 83% of the six months. Our focus was therefore on maintaining a low-cost base, preparing for when trading restrictions could be lifted and securing our financial position to ensure the business can invest behind the return to a normal trading environment. We have delivered on all three of these objectives and while it is early days, all 16 hostels are trading with occupancy across the portfolio showing month on month improvement. Group bookings from colleges and schools are starting to return for the winter period and summer 2022 showing the fundamental appeal of our premium hostels remains unchanged and when our market does normalise, we will have a great opportunity to grow market share. As we relaunch the business post covid, we recently announced to undertake a strategic review in order to maximise value for all shareholders. This process will reveal whether there is additional value for shareholders compared to the upside we believe we can deliver."
Enquiries
Safestay plc +44 (0) 20 8815 1600 Larry Lipman Liberum Capital Limited (Nominated Adviser and Broker) +44 (0) 20 3100 2000 Andrew Godber/Edward Thomas Novella +44 (0) 20 3151 7008 Tim Robertson Fergus Young
For more information visit our:
Website www.safestay.com
Vox Markets page https://www.voxmarkets.co.uk/company/SSTY/news/
Instagram page www.instagram.com/safestayhostels/
Chairman's Statement
Introduction
With the enforced government trading restrictions due to COVID-19 leading to all 16 hostels being closed for 83% of the period under review, our focus naturally switched to protecting and preparing the business for when trading could recommence. To protect the business in this extraordinary environment we sold two hostels for a combined value of GBP16.8 million which facilitated a 35% reduction in Group borrowings as well as providing the cash to support the hostels re-engage as restrictions lifted. In May, a phased process of re-opening the portfolio commenced and by 31 July all hostels were open, with demand being primarily domestic albeit with increased levels of bookings direct to the Company's website. Future bookings from Groups (who represent 40% of revenues) are coming through which demonstrates the ongoing appeal of the portfolio and if, the pandemic remains in check, the business will recover and could well thrive in a less competitive market as a high number of smaller or independent operators have ceased trading.
Financial review
Reflecting the severe government-imposed restrictions on trading, the Group generated revenues of GBP1.02 million (2020: GBP3.4 million), leading to an EBITDAR loss of GBP0.3 million (2020: GBP 1.2 million).
Where available the Company took advantage of government reliefs, the majority of staff were furloughed and support in the form of grants was received in varying amounts from the governments of each country where the Company operates. The Company has maintained the reductions in monthly running costs, compared to pre-covid levels by 60% to an average of GBP0.35 million while non trading restrictions have been in place. Contributing to the cost reductions, the Group's landlords have generally sought to be supportive with GBP0.8m rent forgiveness in H1. This was further helped by Directors and management agreeing to reduce salaries by 40%.
As a result, and with the benefit of the exceptional profit of GBP7.64m from the disposal of Edinburgh, the Group restricted the financial impact of the pandemic in the period to a profit before tax of GBP3.6 million (2020: loss before tax of GBP4.7 million). Government support of GBP636k was received in the period (GBP300k payroll grant income reported in admin expenses and GBP336k other grant income reported in exceptional items), leading to a profit per share of 5.5p (2020: -7.3p per share).
During the period, the Company sold the leasehold Barcelona Sea hostel for GBP0.8 million and completed the sale of the 150-year lease interest in the Edinburgh hostel for GBP16.0 million. Post period, from the proceeds, borrowings were reduced by 35% to GBP18 million and as at 6(th) July the Company had cash of GBP6.3 million.
As at 30 June 2021, net asset value per share was 50.1p per share (2020: 48.2p per share).
Operational review
Brussels, York and Elephant & Castle were the first hostels to be reopened on 17 May. The process was phased to help the management team oversee re-openings and ensure that all safety protocols were re-introduced to protect customers and staff alike as well as comply with local regulations. The order of hotels openings was dictated by booking levels and local regulation requirements and where the Company operates more than one hostel in a city, bookings have been consolidated into one hostel. By 31 July all hostels had reopened.
To support re-engagement, room rates over the summer have included breakfast to attract customers and improve cashflow whereas normally breakfast would be an additional cost. As has been widely reported across the hospitality sector, labour costs have increased with competition for good staff leading to higher payroll costs but it is still too early to determine the overall impact. Bookings have been largely domestic with the reluctance to fly helping our regional locations but as the summer progressed more international travel was taking place and the Company experienced an increase in higher margin bookings direct to the website representing 25% of total bookings.
Overall, the business has made a reasonable return to trading, placing the safety of guests first and looking to build momentum and trust in the business over the coming months. The core offer of a comfortable and safe stay in beautiful, often iconic buildings that are centrally located, in well-known and popular cities but still with a bed rate of around just GBP20, is unchanged. Enquiries and firm bookings for 2022 show that this offer remains appealing, and the management objective is therefore simply to focus on a steady return to pre-Covid-19 levels. The main concern being that the pandemic remains in check and there is no return to lockdown.
Historically, Safestay have sought to operate with an efficient cost base necessary to service customers and give them the best experience, and the action taken through lockdown to mitigate those costs, has provided the business through re-opening the opportunity to re-introduce cost back in to support revenues on a measured basis, whilst continuing to look for further operating efficiencies. One such example included exploring the opportunity to introduce a new property management system, that was both better tailored to Safestay's operating model and significantly more cost efficient, the result of which, Front Desk Manager has been successfully implemented through the third quarter.
Post re-opening occupancy levels have been climbing month on month, with occupancy levels for August 2021, increasing to 43%, with evidence that the re-introduction of some events (Pisa and London) selling out of beds on some nights.
The wide geographical spread of our hostels across Europe provides customers an unrivalled platform for travel, but the mixed approach adopted by each country to unlock and start to relax travel restrictions, has temporarily changed non-group customer behaviours to become more erratic, with would-be travellers remaining "in-country" avoiding international travel, and shifting more towards last minute bookings.
As we head towards winter the uncertainty around potential future Covid actions makes it impossible to really know when the leisure and hospitality sector and international travel will really get back to normal, but management are targeting get back to pre-Covid run rates through the middle quarters of 2022. As is standard practice, when restructuring the debt off the back of the sale of Edinburgh, in April 2021 management prepared cash forecasts to the end of 2022, which 5 months on are proving to be accurate as the hostels recover their business. On that basis Safestay believe occupancy levels in the forty's percentile will be maintained in the early part of H2 2021 before seasonality comes into play, meaning 2021 occupancy totals for hostels, whilst open for business will be mid 30's percent, reflecting both the exit to 2021 and run into 2022 anticipated.
Outlook
It is pleasing to be trading again and to see demand steadily increase. Currently, the business is operating at around 50% of pre-Covid-19 occupancy levels in 2019 and room rate is at approximately 75%. This is within our business plan, and we believe ahead of many of our peers. We will continue to offer attractive room rates while occupancy builds. Financially, the business is on a sound footing following the sale of two hostels, with cash reserves as at 20 September of GBP5.5 million providing the flexibility to support the business and take advantage of investment opportunities should they arise. As we relaunch the business post covid, we recently announced to undertake a strategic review in order to maximise value for all shareholders.
Larry Lipman
Chairman
28 September 2021
Hot Features
Premium
Condensed consolidated statement
of comprehensive income Unaudited Unaudited Audited
6 months 6 months Year to
to 30 June to 30 June 31 December
2021 2020 2020
Note GBP000 GBP000 GBP000
------------ ------------ -------------
Revenue 2 1,020 3,374 4,831
Cost of sales (174) (572) (892)
Gross profit 846 2,802 3,939
Administrative expenses (3,401) (6,104) (11,460)
------------ ------------ -------------
Operating profit / (loss) before
exceptional expenses (2,555) (3,302) (7,521)
Exceptional items - profit on
sale of assets 3 7,074 - -
Exceptional items - other operating
income 336 38 448
Exceptional items - costs (20) (136) (261)
------------ ------------ -------------
Operating profit / (loss) after
exceptional expenses 2 4,835 (3,400) 7,334
Finance costs (1,270) (1,327) (2,750)
Profit / (loss) before tax 3,565 (4,727) (10,084)
Tax 382 (66) 2,403
------------ ------------ -------------
Total comprehensive profit /
(loss) for the period attributable
to owners of the parent company 3,947 (4,793) (7,681)
============ ============ =============
Condensed consolidated statement
of
financial position Unaudited Unaudited Audited
30 June 30 June 31 December
2021 2020 2020
Note GBP000 GBP000 GBP000
---------- ---------- -------------
Non-current assets
Property, plant and equipment 73,780 89,963 89,735
Intangible assets 29 1,026 921
Goodwill 12,146 15,614 13,569
Deferred tax asset 2,693 - 2,159
Total non-current assets 88,648 106,603 106,384
---------- ---------- -------------
Current assets
Stock 38 64 47
Trade and other receivables 1,673 1,185 1,884
Current tax asset 65 - 289
Cash and cash equivalents 16,230 (11) 2,125
Total current assets 18,006 1,238 4,345
---------- ---------- -------------
Total assets 106,654 107,841 110,729
Current liabilities
Borrowings 776 (191) 311
Lease liabilities 1,854 1,931 1,932
Trade and other payables 2,908 3,324 3,008
Total current liabilities 5,538 5,064 5,251
---------- ---------- -------------
Non-current liabilities
Borrowings 34,312 35,035 40,043
Lease liabilities 34,422 36,271 36,648
Deferred tax - 71 -
Trade and other payables due in
more than one year - 217 336
Total non-current liabilities 68,734 71,594 77,027
---------- ---------- -------------
Total liabilities 74,272 76,658 82,278
---------- ---------- -------------
Net assets 32,382 31,183 28,451
---------- ---------- -------------
Equity
Share capital 10 647 647 647
Share premium account 23,904 23,904 23,904
Other components of equity 16,371 15,220 16,387
Retained earnings (8,540) (8,588) (12,487)
---------- ---------- -------------
Total equity attributable to owners
of the parent company 32,382 31,183 28,451
========== ========== =============
Condensed consolidated statement of changes in equity
For the six months to 30 June 2021 (unaudited)
Share Share Other Components Retained earnings Total
capital premium account of Equity GBP000 equity
GBP000 GBP000 GBP000 GBP000
-------- ---------------- ---------------- ----------------- -------
Balance at 1 January
2021 647 23,904 16,387 (12,487) 28,451
Comprehensive income
Profit for the period - - - 3,947 3,947
Movement in translation
reserve - - (178) - (178)
Total comprehensive
income - - (178) 3,947 3,769
-------- ---------------- ---------------- ----------------- -------
Transactions with owners
Share-based payment
charge for the period - - 162 - 162
-------- ---------------- ---------------- ----------------- -------
Balance at 30 June
2021 647 23,904 16,371 (8,540) 32,382
======== ================ ================ ================= =======
Condensed consolidated statement of changes in equity
For the six months to 30 June 2020 (unaudited)
Share Share Other Components Retained earnings Total
capital premium account of Equity GBP000 equity
GBP000 GBP000 GBP000 GBP000
-------- ---------------- ---------------- ----------------- -------
Balance at 1 January
2020 647 23,904 15,461 (3,795) 36,217
Comprehensive income
Loss for the period - - - (4,793) (4,793)
Movement in translation
reserve - - (258) - (258)
Total comprehensive
income - - (258) (4,793) (5,051)
-------- ---------------- ---------------- ----------------- -------
Transactions with owners
Share-based payment
charge for the period - - 17 - 17
-------- ---------------- ---------------- ----------------- -------
Balance at 30 June
2020 647 23,904 15,220 (8,588) 31,183
======== ================ ================ ================= =======
For the year ended 31 December 2020 (audited)
Balance at 1 January 2020
(restated) 647 23,904 16,104 (4,806) 35,849
Loss for the year - - - (7,681) (7,681)
Other comprehensive income
Movement in translation
reserve - - 4 - 4
--- ------ ------ -------- -------
Total comprehensive loss - - 4 (7,681) (7,677)
Transactions with owners
Share based payment charge
for the period - - 279 - 279
Balance at 31 December
2020 647 23,904 16,387 (12,487) 28,451
=== ====== ====== ======== =======
Condensed consolidated statement
of cash flows Unaudited Unaudited Audited
Note 6 months 6 months Year to
to 30 June to 30 June 31 December
2021 2020 2020
GBP000 GBP000 GBP000
------------ ------------ -------------
Operating activities
Cash generated from operations 4 (244) (787) (4,228)
Income tax paid - (134) (119)
------------ ------------ -------------
Net cash generated from operating
activities (244) (921) (4,347)
------------ ------------ -------------
Investing activities
Purchase of property, plant and equipment (55) (755) (985)
Purchase of intangible assets - (29) (36)
Acquisition of business - (3,652) (2,003)
Payment of deferred consideration - (498) (509)
Sale proceeds from disposals 3 16,000 - -
Net cash outflow from investing activities 15,945 (4,934) (3,533)
------------ ------------ -------------
Cash flows from financing activities
Proceeds from refinancing transaction - - 5,681
Fees relating to financing transaction - - (161)
Proceeds from property financing
transaction - 5,348 -
Proceeds from Coronavirus Business
Interruption loan - - 5,000
Repayment of bank loans (205) - -
Principal elements of lease payments (882) (1,691) (2,514)
Property financing payments (166) (166) (331)
Fees related to borrowings - (255) -
Interest paid (343) (346) (624)
(1,596) 2,890 (7,051)
------------ ------------ -------------
Cash and cash equivalents at beginning
of period 2,125 2,954 2,954
Net increase/(decrease) in cash and
cash equivalents 14,105 (2,965) (829)
------------ ------------ -------------
Cash and cash equivalents at end
of period 16,230 (11) 2,125
============ ============ =============
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 Accounting Standards in conformity with the requirements of the Company Act 2006.
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 2020.
The financial statements have been presented in sterling, prepared under the historical cost convention, except for the revaluation of freehold properties and right of use assets.
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 2021.
New standards and interpretations effective in the year
No new standards have been implemented this year that have a material impact on the business.
2. SEGMENTAL ANALYSIS
Covid 19 lockdown legislation severely impacted both 2020 and 2021 trading, limiting H1 2021 to just 560 trading days, including 181 at Edinburgh for student accommodation compared to 1,452 trading days in 2020. In some locations, government restrictions lifted for re-opening of food and beverage venues to guests ahead of hostel accommodation.
Unaudited Unaudited Audited
6 months 6 months Year to
to 30 June to 30 June 31 December
2021 2020 2020
GBP000 GBP000 GBP000
------------ ------------ -------------
Hostel accommodation 507 2,400 3,570
Food and Beverages sales 364 404 744
Other income 18 341 120
Rental income 131 229 397
------------ ------------ -------------
Total Income 1,020 3,374 4,831
------------ ------------ -------------
UNAUDITED 6 MONTHS TO 30 JUNE 2021
UK Europe Shared Total
2021 services
GBP000 GBP000 GBP000 GBP000
Revenue 790 230 - 1,020
Profit/(Loss) before tax 6,954 (1,968) (1,421) 3,565
Finance costs 481 451 338 1,270
-------- ---------- ---------- --------
Operating Profit after exceptional
items 7,435 (1,517) (1,083) 4,835
Depreciation, Amortisation &
disposals 1,178 1,288 - 2,466
Exceptional & Share based payment
expense (7,640) 607 182 (6,851)
Rent forgiveness (330) (458) - (788)
-------- ---------- ---------- --------
Adjusted EBITDA 643 (80) (901) (338)
-------- ---------- ---------- --------
Total assets 43,220 39,244 24,190 106,654
-------- ---------- ---------- --------
Total liabilities 17,814 29,347 27,111 74,272
-------- ---------- ---------- --------
AUDITED 12 MONTHS TO 31 DECEMBER 2020
UK Europe Shared Total
2020 services
GBP000 GBP000 GBP000 GBP000
Revenue 2,455 2,376 - 4,831
Profit/( Loss ) before tax (3,321) (6,259) (504) (10,084)
Finance costs 963 1,001 786 2,750
---------- ---------- ---------- -----------
Operating Loss after exceptional
items (2,358) (5,258) 282 (7,334)
Depreciation, Amortisation &
disposals 1,465 4,225 - 5,690
Exceptional & Share based payment
expense - - 541 541
Rent forgiveness (495) (409) - (904)
---------- ---------- ---------- -----------
Adjusted EBITDA (1,388) (1,442) 823 (2,007)
---------- ---------- ---------- -----------
Total assets 57,744 42,115 10,870 110,729
---------- ---------- ---------- -----------
Total liabilities 22,959 31,242 28,077 82,278
---------- ---------- ---------- -----------
3. EXCEPTIONAL ITEMS
Exceptional items - profit on sale of assets
GBP000
Disposal of Edinburgh
Sale proceeds 16,000
Leasehold disposal (12,306)
Intangible sublease disposal (512)
Property financing transaction disposal 5,169
Equipment, fixtures and fittings disposal (290)
Investment disposal (420)
---------
Total profit on disposal of Edinburgh 7,641
Disposal of Barcelona Sea
Intangible sublease disposal (225)
Equipment, fixtures and fittings disposal (10)
Release of deferred consideration for Barcelona Passeig
De Gracia 473
Goodwill disposal (846)
Dispose right of use asset (1,348)
Lease liability 1,389
--------
Total loss on disposal of Barcelona Sea (567)
Total profit on disposal of assets 7,074
------
Consideration for Barcelona Sea hostel was GBP0.8m. The consideration was used to offset the deferred consideration liability owed for Barcelona Passeig De Gracia with a final balance due to be repaid in March 2022 of GBP221k.
Exceptional items - other operating income
Unaudited Unaudited Audited
6 months 6 months Year to
to 30 June to 30 June 31 December
2021 2020 2020
GBP000 GBP000 GBP000
------------ ------------ -------------
Grant income 336 38 448
Exceptional items - costs
GBP000
Disposal of Barcelona Sea hostel legal
fees 20,000
4. 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
2021 2020 2020
GBP000 GBP000 GBP000
------------ ------------ -------------
Loss before tax 3,565 (4,727) (10,084)
Adjustments for:
Depreciation of property, plant and
equipment and 2,466 2,072 5,690
amortisation of intangible assets
Profit on disposal of assets (7,074) - -
Finance costs 1,270 1,327 2,693
Share-based payments 162 17 279
Exchange movements 30 (303) (8)
Rent forgiveness (788) - (904)
Changes in working capital
Decrease/(Increase) in inventory 10 23 39
(Increase)/Decrease in trade receivables 218 222 (244)
Increase/(Decrease) in trade and other
payables (103) 582 (1,689)
------------ ------------ -------------
Cash generated from operating activities (244) (787) (4,228)
------------ ------------ -------------
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