5 September
2024
Safestay plc
("Safestay", the
"Company" of the "Group")
Interim Results
23% increase in EBITDA reflects strong
strategic progress and operational leverage
Accelerated expansion in 2024 to date
with four outstanding new sites added to the portfolio,
strengthening the Group's platform for long-term
growth
Safestay (AIM: SSTY), one of Europe's largest
hostel groups, is pleased to announce its Interim Results for the
six months to 30 June 2024 (H1 2024 or the "Period").
H1 2024
Financial Highlights:
●
|
Revenue from continuing operations increased
6.6% to £10.7 million (H1 2023: £10.0 million)
|
●
|
Adjusted EBITDA for continuing operations
increased 23.1% to £3.2 million (H1 2023: £2.6 million) reflecting
strong operational leverage, increased mix of sales through direct
channels, and tight cost control, resulting in a 4% improvement to
the EBITDA margin to 30% (H1 2023: 26%)
|
●
|
Adjusted Earnings Per Share from continuing
operations of 0.16p (H1 2023: Adjusted loss per share of
1.46p)
|
●
|
Loss Before Tax from continuing operations of
£113k (H1 2023: loss of £947k); Profit for the period attributable
to owners of the parent company (also known as profit after tax) of
£63k (H1 2023: loss of £1,003k)
|
●
|
Successful debt refinancing with HSBC in
January 2024 to increase the Group's overall funding capacity and
support its long-term growth plans. Existing borrowings refinanced
into a single £16 million five-year Term Loan with the addition of
a new £2.5 million Revolving Credit Facility ("RCF")
|
●
|
Net cash generated from operations was £5.0
million (H1 2023: £5.4 million).
|
●
|
Cash at bank was £2.1 million, broadly in line
with the balance at 31 December 2023 (FY 2023: £2.0 million). The
year-on-year decrease (H1 2023: £7.1m) primarily reflects £4.3
million paid for the Edinburgh acquisition in H2 2023 as well as
the acquisitions made during the Period, outlined
below.
|
●
|
17.2% increase in net asset value per share to
49.8p (H1 2023: 42.5p) reflecting the strength of the Group's
portfolio.
|
H1 2024
Operational Highlights:
●
|
6.0% increase in bed nights to 412,442 (H1
2023: 389,124), of which 42.3% were booked through direct and
non-commissionable channels (H1 2023: 26.9%) reflecting a
step-change in marketing capabilities and supported by a gradual
recovery in group bookings, which represent 23% of accommodation
sales in the period (H1 2023: 13%)
|
●
|
Occupancy rate of 70.6%, a 1.8% increase year
on year (H1 2023: 68.8%), nearing pre-pandemic levels (H2 2019:
71.1%)
|
●
|
Total REVPAB increased 3.2% to £18.28 (H1 2023:
£17.72) reflecting management focus on driving overall revenue and
supported by significantly increased sales of ancillary
services
|
●
|
Average Bed Rate ("ABR") of £22.15, a 4.5%
decline year on year (H1 2023: ABR: £23.18) but remains ahead of
pre-pandemic levels (H1 2019: £21.19)
|
●
|
Successful opening of Edinburgh Cowgate Hostel
in June 2024 following acquisition in 2023 with very encouraging
initial trading.
|
●
|
Strategic portfolio expansion with the addition
of three new properties during the Period:
|
|
●
|
in April 2024, the Group signed its first
management contract to run the resort-based,120-bed Calpe Seafront
Hostel on Spain's Costa Blanca;
|
|
●
|
in May 2024, the Group acquired the
Hotel Lineros in the heart
of Cordoba for a cash consideration of €2 million. The property is
currently being converted into a 100-bed hostel and is the Group's
fifth in Spain; and
|
|
●
|
in June 2024, the Group acquired a freehold
property in the Centre of Brighton for £2.3 million. The Group
intends to convert the property into a 220-bed premium hostel and
is the Group's sixth site in the UK.
|
|
|
| |
Current
Trading & Outlook
●
|
Strong momentum has continued into Q3 with
sales to the end of August significantly ahead of last year
supporting strong overall occupancy levels across the two peak
summer months
|
●
|
Forward bookings for the remainder of 2024 and
into 2025 comfortably ahead of the prior year supported by
continuing recovery in group bookings
|
●
|
Strategic decision taken to surrender the lease
for the Group's 52-room hotel in Vienna, removing the only
loss-making property in the Group's portfolio and enabling the
redeployment of capital where there are stronger returns
|
●
|
Fourth new property added to the portfolio in
the year to date with the acquisition of a leasehold city centre
site in Budapest in August, Hungary, building on the Company's
established Eastern European presence in the Czech Republic,
Slovakia and Poland
|
Larry Lipman,
Chairman of the Group, commented:
"2024 so far
has been a period of significant strategic progress for Safestay as
we have continued to strengthen our position as one of Europe's
leading hostel operators. During the first half of the year, we
successfully added to our portfolio with two very exciting new
properties in Spain, taking us to five in the market and giving us
increased critical mass to drive synergies and revenue growth. We
also acquired a fantastic new site in central Brighton - taking us
to six in the UK - and, early in H2, entered the Budapest hostel
market to expand our reach in Eastern Europe.
In addition
to our portfolio expansion, we have continued to focus on driving
organic growth through operational excellence, supporting a 23.1%
increase in Adjusted EBITDA in H1. Our strong trading momentum has
continued into H2 with encouraging sales performances and occupancy
rates across the peak summer months of July and
August.
Safestay's
portfolio now comprises 20 sites with 17 currently serving guests
in premium locations across some of Europe's great destination
cities. In addition to remaining focused on delivering organic
growth through our operational initiatives, we will continue to
actively evaluate new opportunities where well located, attractive
sites become available. We are excited by the significant long-term
growth opportunities available to us as an established
international operator in the highly fragmented and significant
global hostel market."
Copies of this announcement are available on the
Company's website, www.safestay.com
Enquiries
Safestay
PLC
Larry Lipman
|
Tel: +44 (0) 20 8815 1600
|
Shore Capital
(Nomad & Broker)
Tom Griffiths/Harry Davies-Ball
|
Tel: +44 (0) 20 7408 4090
|
Hudson Sandler
(Financial PR)
Alex Brennan/Lucy Wollam
|
Tel: +44 (0) 20 7796 4133
safestay@hudsonsandler.com
|
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
During H1 2024 Safestay delivered a period of
important strategic, operational, and financial progress. The
appeal of Safestay's portfolio of premium hostels remains very
strong amongst its core customer base of young travellers,
families, and business travellers. This resulted in a 6.0% increase
in bed nights sold during the period to 412,442 (H1 2023: 389,124),
of which 42.3% were booked through more profitable direct and
non-commissionable channels (H1 2023: 26.9%).
The increasing demand for our great value
hostels continues to be supported by the growing popularity of the
Safestay brand as well as the strength of the Group's outstanding
locations across highly popular European travel locations. As a
result, we delivered sales growth of 6.6% to £10.7 million. This
was driven by a 1.8% increase in occupancy to 70.6% (H1 2023:
68.8%) and a 54.6% increase in non-accommodation sales to £1.6m (H1
2023: £1.0 million), in line with our main operational KPIs of
increasing occupancy and total revenue per available bed ('total
REVPAB').
We are pleased to report a 23.1% increase to
Adjusted EBITDA for continuing operations to £3.2 million (H1 2023:
£2.6 million), reflecting continued revenue growth, tight cost
control and the business's operational leverage.
Strategic
portfolio expansion
Safestay operates in the significant and
fragmented international hostel market, which is estimated to grow
to US$8.89 billion by 2027 (Source: Markets and Research, August
2022). Overall market growth continues to be driven by increasing
consumer trends towards great value travel accommodation and the
rise in international travel by Millennial and Gen-Z customer
demographics. Our strategy is focused on continuing to drive
organic revenue growth through operational excellence whilst also
actively pursuing strategic expansion opportunities where great
sites become available.
Safestay is an experienced acquirer of hostels
and we have a proven track record of quickly integrating and
improving the performance of acquired sites. We are well-positioned
to take advantage as hostels and other buildings capable of being
converted to hostels come to the market, but only if all internal
criteria are met. Overall, our core offer of a comfortable and safe
stay in beautiful, often iconic buildings that are centrally
located, in well-known and popular cities, remains unchanged.
During the first half of the year, we returned to more aggressive
expansion of the portfolio with three new sites added across
attractive European travel locations and building further critical
mass in both Spain and the UK.
In April we signed an initial 20-year term
management contract to run the resort-based 120 bed Calpe Seafront
Hostel on Spain's Costa Blanca. The Calpe Seafront hostel is
located opposite Salt Lake, home to flocks of greater flamingos,
five minutes' walk from Arenal-Bol beach and a 45-minute drive from
Alicante airport. It was acquired after the hostel had been put
into administration during the pandemic, when trading was severely
curtailed. The hostel has been closed since. As an established
hostel operator in Spain, we are well positioned to take over the
management under the Safestay brand and incorporate it into the
Group's booking system. Prior to the pandemic, the Calpe Seafront
was a successful hostel, and we are confident of being able to
quickly re-establish trading and return it to being a successful
business. The Group has already completed some minor refurbishment
work and is targeting re-opening the property in Q4 2024 under
Safestay branding, subject to receipt of necessary licences. Under
the management contract, Safestay receives a fixed management fee
plus a percentage of revenue and profits above certain levels. The
Board believes this new operating model for the Group offers an
exciting template for further potential management outsourcing
transactions.
In May we continued to build critical mass in
the Spanish market with the acquisition of Hotel Lineros in Cordoba for €2.0
million funded from the Group's existing cash resources. Hotel
Lineros is a spectacular building and a natural fit with the
Group's portfolio of unique properties. The hotel is ideally
located just a short walk from Cordoba's famous ancient mosque, La
Mezquita, which attracts 1.5 million visitors each year. The
historic city centre is also a major tourist destination and a
UNESCO world heritage site. The property is currently run as a
hotel, and whilst undergoing a conversion process, is expected in
the eight months to 31 December 2024 to generate meaningful revenue
for the Group.
In June we acquired a freehold property in the
centre of Brighton with the intention of converting it into a
220-bed hostel, subject to planning permission. The property is in
the heart of Brighton - a city which attracts over 11 million
visitors per year - and set over five stories. The cost of
conversion is estimated at £1.0 million and should take
approximately six months once planning permission is received. In
its first year of trading, sales and EBITDA are projected to be
£750,000 and £250,000 respectively. The total acquisition
consideration was £2.3 million funded by the Group's existing cash
resources and a new £1.2 million loan from the trustees of the
Sheldon Pension Fund and Sentpark Capital Limited.
Operational
Excellence
In addition to strategically expanding our
portfolio, a key pillar of the Group's growth strategy is focused
on driving organic revenue growth through operational excellence.
Under the guidance of our Chief Operating Officer, Peter Zielke, a
primary aim has been to lift all operational standards across the
portfolio and create unique experiences for our guests that will,
in turn, underpin sustainable revenue growth.
Key operational focus areas for the Group
include driving occupancy rates; increasing Total REVPAB;
increasing bookings through commission-free own channels supported
by effective, digital-led marketing; and increasing
non-accommodation sales through the provision of ancillary services
to guests who are staying at our hostels. All of this is supported
by our Commercial Hub in Warsaw, which was established in 2023 and
is a one-stop shop for revenue management, sales and marketing, and
critical HR functions.
Occupancy during the period was 70.6%, a 1.8%
increase year on year (H1 2023: 68.8%), nearing pre-pandemic levels
(H2 2019: 71.1%). Occupancy naturally increases over the summer and
so the average for the year is expected to be higher and broadly
in-line with 2019 at 71%. This improvement reflects
increasing demand for Safestay's customer proposition as well as
the success of our marketing initiatives and a gradual recovery in
Group bookings, which represented 23% of accommodation sales in the
period compared to just under 13% in the prior year.
Average Bed Rate ("ABR") fell 4.5% year-on-year
(H1 2023: ABR £23.18) against the backdrop of wider consumer price
pressures across the whole portfolio. In Spring 2024, management
made strategic decisions to protect overall yield in lieu of ABR.
These decisions meant that the Group delivered an increase of Total
REVPAB by 3.2% to £18.28 (H1 2023: £17.72), aided by the Group's
sharpened focus on increasing sales of food and beverage and
ancillary services including laundry facilities, towel rentals, and
secure luggage storage. Our dynamic pricing software, PricePoint,
allows us to swiftly implement changes in pricing strategy every
two minutes as the market changes.
Since 1 January 2023, the Group has returned to
an annual capex budget equivalent to 3.0% of annual revenue. This
is essential to maintaining the Group's reputation as a leading
premium hostel operator and to protecting the quality of the
portfolio by ensuring that every site remains in excellent
condition.
Financial
Review
The Group generated revenues from continuing
operations of £10.7 million (H1 2023: £10.0 million), a 6.6%
increase on the prior period. Within this, accommodation sales
increased 1.3% to £9.1 million (H1 2023: £9.0 million) and
non-accommodation sales increased 54.6% to £1.6m (H1 2023: £1.0
million).
Adjusted EBITDA from continuing operations
increased by 23.1% to £3.2 million (H1 2023: £2.6 million). The
Adjusted EBITDA margin increased 4.0% to 29.6% (H1 2023: 25.6%)
reflecting a more benign cost inflation compared to the prior
period, the increased proportion of sales generated through direct
channels, tight cost control, and the Group's operational
leverage.
The Group recorded a loss before tax from
continuing operations of £113k (H1 2023: loss of £947k) and a
profit for the period attributable to the owners of the parent
company of £63k (H1 2023: loss of £1,003k). The Group recorded
Earnings Per Share ("EPS") from continuing operations of 0.16p (H1
2023: loss of 1.46p) and basic loss per share from discontinued
operations of 0.07p (H1 2023: loss of 0.08p). As always, most
income is expected to be generated in the second half of the year
and the Board therefore anticipates reporting further profitable
growth in H2.
Net cash generated from operations was £5.0
million (H1 2023: £5.4 million), primarily due to tax payments on
overseas profits.
Group bank borrowings as at 30 June 2024 were
£19.8 million (H1 2023: £16.6 million). Cash at bank was £2.1
million, broadly in line with its balance at 31 December 2023 (FY
2023: £2.0 million). The year-on-year decrease (H1 2023: £7.1m)
reflects £4.3 million paid for the Edinburgh acquisition in the
prior year as well as the acquisitions during the period, outlined
above.
In January, the Group announced the refinancing
of all its existing borrowings into a single £16.0 million Term
Loan and added a new £2.5 million Revolving Credit Facility ("RCF")
to support future growth plans. The new Term Loan and RCF are for
five years and were provided by existing lender HSBC. The Term Loan
interest rates are £4.4 million at 3.955%, £10 million at SONIA but
capped at 4.75% with a floor of 3% and £1.6 million at SONIA, all
with an additional margin of 2.6%. The RCF has a rate of SONIA plus
a margin of 2.85%. The Term Loan is repayable at £0.1 million per
quarter from March 2025 together with a final payment at
completion. Interest on both the Term Loan and RCF is payable
quarterly from March 2024. The Term Loan replaces the previous
interest only £12.7 million facility with HSBC and enables the
repayment of the outstanding CBILS loan of £3.3 million which
carried a significantly higher interest rate.
Current
Trading & Outlook
We are very pleased with the strategic progress
made during the first half of the year. This strong momentum has
continued into H2 so far with strong occupancy levels in July and
August and sales significantly ahead of last year at the end of
August. Forward bookings for the remainder of 2024 and into 2025
are comfortably ahead of the prior year supported by a continuing
recovery in group bookings. As a result of the Group's progress in
H1 and its trading momentum the Board anticipates delivering
further profitable growth in H2 .
Since the period end, we have continued to
develop our portfolio including through the acquisition in August
of a leasehold city centre site in Budapest, Hungary, building on
Safestay's established Eastern European presence in the Czech
Republic, Slovakia, and Poland. In August we also took the
strategic decision to surrender the lease for the Group's 52-room
hotel in Vienna, removing the only loss-making property in the
Group's portfolio and enabling the redeployment of capital where
there are stronger returns.
In June, we successfully opened our Edinburgh
Cowgate hostel following its acquisition in 2023 and we have been
very encouraged by early trading and positive customer feedback,
with particularly strong occupancy rates over the summer months
including during the Edinburgh Fringe festival.
In the longer-term, the Board remains highly
confident in Safestay's significant growth prospects. These are
underpinned by the Group's growing portfolio of premium hostels in
outstanding locations, as well as the Group's ability to leverage
its established systems, brand, and proven operational capabilities
to a sizeable and growing total addressable market. As a result, we
look forward to the future with optimism and confidence.
Larry Lipman,
Chairman
5 September
2024
CONSOLIDATED INCOME STATEMENT
|
|
Half year
to
|
|
Half year
to
|
|
Year to
|
|
|
30-Jun
|
|
30-Jun
|
|
31 December
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
|
As restated
|
|
|
|
|
Total
|
|
Total
|
|
Total
|
|
Note
|
£'000
|
|
£'000
|
|
£'000
|
|
|
|
|
|
|
|
Revenue
|
3
|
10,684
|
|
10,022
|
|
21,493
|
Cost of sales
|
|
(1,704)
|
|
(1,723)
|
|
(3,811)
|
Gross profit
|
|
8,980
|
|
8,299
|
|
17,682
|
Administrative expenses
|
|
(7,518)
|
|
(7,724)
|
|
(15,231)
|
Operating profit
|
|
1,462
|
|
575
|
|
2,451
|
Finance income and costs
|
|
(1,575)
|
|
(1,522)
|
|
(3,173)
|
Loss before tax
|
|
(113)
|
|
(947)
|
|
(722)
|
Tax
|
|
220
|
|
(1)
|
|
(226)
|
Profit / (loss) for the period from continuing
operations
|
|
107
|
|
(948)
|
|
(948)
|
Net loss from discontinued
operations
|
4
|
(44)
|
|
(55)
|
|
(376)
|
Profit /(loss) for the financial period attributable to owners
of the parent company
|
|
63
|
|
(1,003)
|
|
(1,324)
|
|
|
|
|
|
|
|
Basic profit / (loss) per share from
continuing operations
|
5
|
0.16p
|
|
(1.46p)
|
|
(1.46p)
|
Basic profit / (loss) per share from
discontinued operations
|
5
|
(0.07p)
|
|
(0.08p)
|
|
(0.58p)
|
Diluted profit / (loss) per share
from continuing operations
|
5
|
0.16p
|
|
(1.40p)
|
|
(1.39p)
|
Diluted profit / (loss) per share
from discontinued operations
|
5
|
(0.06p)
|
|
(0.08p)
|
|
(0.55p)
|
1 General
Information
Safestay plc, the "Company"
together with its subsidiaries, "the Group", is a public limited
company whose shares are listed on the Alternative Investment
Market ("AIM") of the London Stock Exchange and is incorporated and
domiciled in the United Kingdom and registered in England and
Wales. The registered number of the Group is 08866498 and its
registered address is 1a Kingsley Way, London, N2 0FW.
2
Basis of Preparation
The consolidated interim financial
information has been prepared in accordance with UK-adopted
International Financial Reporting Standards
("IFRS") in conformity with the requirements of the Companies Act
2006.
The Group's Annual Report and
Accounts for the period ended 31 December 2024 are expected to be
prepared under IFRS.
The comparative information for the
period ended 30 June 2023 in this interim report does not
constitute statutory accounts for that period under section 435 of
the Companies Act 2006.
Statutory accounts for the period
ended 31 December 2023 have been delivered to the Registrar of
Companies.
The auditors' report on the
statutory accounts for 31 December 2023 was unqualified, did not
draw attention to any matters by way of emphasis, and did not
contain a statement under section 498(2) or 498(3) of the Companies
Act 2006.
Significant Accounting
Policies
The consolidated interim financial
information has been prepared in accordance with accounting
policies that are consistent with the Group's Annual Report and
Accounts for the period ended 31 December 2023 which is published
on the Safestay website, located at www.safestay.com.
At the date of authorisation of this financial information, certain
new standards, amendments and interpretations to existing standards
applicable to the Group have been published but are not yet
affective and have not been adopted early by the Group. The impact
of these standards is not expected to be material.
In adopting the going concern basis
for preparing these financial statements, the Directors have
considered the business model and strategies, as well as taking
into account the current cash position and facilities.
Based on the Group's cashflow
forecasts, the Directors are satisfied that the Group will be able
to operate within the level of its current facilities for the
foreseeable future, a period of at least twelve months from the
date of this report. Accordingly, the Directors consider it
appropriate for the Group to adopt the going concern basis in
preparing these financial statements.
Financial information contained in this
document does not constitute statutory accounts within the meaning
of section 434 of the Companies Act 2006 ("the Act"). The statutory
accounts for the year ended 31 December 2023 have been filed with
the Registrar of Companies. The report of the auditors on those
statutory accounts was unqualified, and did not contain a statement
under section 498(2) or (3) of the Act.
The financial information for the six months
ended 30 June 2024 and 30 June 2023 is unaudited.
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 2023.
The financial statements have been presented in
sterling, prepared under the historical cost convention, except for
the revaluation of freehold properties, right of use assets and
fair value of derivative financial assets and
liabilities.
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 31 December
2023.
New Accounting
Policies
Due to the refinancing and the subsequent
hedging arrangements agreed in January 2024 the Group has
considered the need to apply hedge accounting on the two
derivatives for the interim financial information. The Group has
decided not to apply hedge accounting on the two derivatives. Fair
value movements in these financial assets and liabilities will be
recorded through the income statement.
New standards
and interpretations effective in the year
No new standards have been implemented this
year that have a material impact on the business.
3
Segmental Analysis
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
6 months to 30
June
|
|
6 months to 30
June
|
|
Year to 31
December
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
£000
|
|
£000
|
|
£000
|
Hostel accommodation
|
|
9,136
|
|
9,021
|
|
19,190
|
Food and Beverages sales
|
|
1,001
|
|
689
|
|
1,495
|
Other income
|
|
547
|
|
312
|
|
808
|
Total Income from continuing operations
|
|
10,684
|
|
10,022
|
|
21,493
|
Unaudited 6 months to 30 June 2024 (continuing
operations)
|
UK
|
Spain
|
Europe
|
Shared
services
|
Total
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Revenue
|
4,183
|
2,986
|
3,515
|
-
|
10,684
|
Profit/(loss) before tax
|
1,626
|
512
|
463
|
(2,714)
|
(113)
|
Add back: Finance income and
costs
|
115
|
-
|
(19)
|
1,479
|
1,575
|
Add back: Depreciation &
Amortisation
|
256
|
599
|
440
|
410
|
1,705
|
EBITDA
|
1,998
|
1,111
|
884
|
(826)
|
3,167
|
Exceptional & Share based
payment expense
|
-
|
-
|
-
|
-
|
-
|
Adjusted EBITDA
|
1,998
|
1,111
|
884
|
(826)
|
3,167
|
Total assets
|
44,794
|
16,987
|
20,414
|
15,726
|
97,921
|
Total liabilities
|
(13,318)
|
(12,250)
|
(7,973)
|
(32,049)
|
(65,590)
|
Unaudited 6 months to 30 June 2023 (continuing
operations)
|
UK
|
Spain
|
Europe
|
Shared
services
|
Total
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Revenue
|
3,556
|
2,477
|
3,989
|
-
|
10,022
|
Profit/(loss) before tax
|
931
|
96
|
499
|
(2,473)
|
(947)
|
Add back: Finance income and
costs
|
98
|
-
|
16
|
1,408
|
1,522
|
Add back: Depreciation &
Amortisation
|
298
|
549
|
615
|
511
|
1,973
|
EBITDA
|
1,327
|
645
|
1,130
|
(554)
|
2,548
|
Exceptional & Share based
payment expense
|
-
|
-
|
-
|
21
|
21
|
Adjusted EBITDA
|
1,327
|
645
|
1,130
|
(533)
|
2,569
|
Total assets
|
34,969
|
16,335
|
24,309
|
20,389
|
96,002
|
Total liabilities
|
(12,227)
|
(12,168)
|
(12,681)
|
(31,348)
|
(68,424)
|
Audited 12 months to 31 December 2023 (continuing
operations)
|
UK
|
Spain
|
Europe
|
Shared
services
|
Total
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Revenue
|
8,270
|
5,349
|
7,874
|
-
|
21,493
|
Profit/(loss) before tax
|
2,293
|
(431)
|
(918)
|
(1,666)
|
(722)
|
Add back: Finance income and
costs
|
315
|
278
|
254
|
2,326
|
3,173
|
Add back: Depreciation &
Amortisation
|
432
|
1,198
|
931
|
540
|
3,101
|
EBITDA
|
3,040
|
1,045
|
267
|
1,200
|
5,552
|
Impairment
|
-
|
-
|
1,028
|
-
|
1,028
|
Exceptional & Share based
payment expense
|
-
|
-
|
-
|
80
|
80
|
Adjusted EBITDA
|
3,040
|
1,045
|
1,295
|
1,280
|
6,660
|
Total assets
|
40,944
|
15,818
|
21,551
|
15,658
|
93,971
|
Total liabilities
|
(11,424)
|
(11,853)
|
(7,904)
|
(30,031)
|
(61,212)
|
Total liabilities for the Europe segment for
the period ending 30 June 2024 includes £470k of liabilities held
for sale (30 June 2023: £nil). Total liabilities for the Europe
segment for the year ending 31 December 2023 includes £506k of
liabilities held for sale.
4
Discontinued Operations
Following the classification of the asset group
of "Vienna Hotel" as held for sale in September 2023, the
operational performance was classified as discontinued. The Hostel
formed part of the Europe operating segment.
|
|
6 months to
|
|
6 months to
|
|
Year to
|
|
|
30 June
|
|
30 June
|
|
31 December
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
£000s
|
|
£000s
|
|
£000s
|
|
|
|
|
|
|
|
Revenue
|
|
448
|
|
450
|
|
996
|
Cost of sales
|
|
(95)
|
|
(160)
|
|
(228)
|
Gross profit
|
|
353
|
|
290
|
|
768
|
Administrative expenses
|
|
(232)
|
|
(223)
|
|
(905)
|
Operating profit
|
|
121
|
|
67
|
|
(137)
|
Finance income and costs
|
|
(165)
|
|
(122)
|
|
(239)
|
Profit/(loss) before tax
|
|
(44)
|
|
(55)
|
|
(376)
|
Loss after tax for discontinuing operations
|
|
(44)
|
|
(55)
|
|
(376)
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
30 June
|
|
30 June
|
|
31 December
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
£000s
|
|
£000s
|
|
£000s
|
Property plant and equipment
(including right-of-use asset)
|
|
3,579
|
|
-
|
|
3,884
|
Trade and other payables
|
|
(293)
|
|
-
|
|
(187)
|
Lease Liabilities
|
|
(3,869)
|
|
-
|
|
(4,291)
|
Cash and cash equivalents
|
|
82
|
|
-
|
|
40
|
Trade and other
receivables
|
|
31
|
|
-
|
|
48
|
Liabilities held for sale
|
|
(470)
|
|
-
|
|
(506)
|
|
|
6 months to
|
|
6 months
|
|
Year to
|
|
|
30 June
|
|
30 June
|
|
31 December
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
£'000
|
|
£'000
|
|
£'000
|
Cash flow from operating activities
|
|
|
|
|
|
|
Loss for the year
|
|
(44)
|
|
(55)
|
|
(376)
|
Tax charge
|
|
-
|
|
-
|
|
1
|
Depreciation, amortisation and
impairment
|
|
-
|
|
-
|
|
264
|
Net finance costs
|
|
165
|
|
122
|
|
239
|
(Increase)/decrease in
inventories
|
|
(1)
|
|
-
|
|
2
|
Decrease in trade and other
receivables
|
|
17
|
|
45
|
|
(54)
|
Increase in trade and other
payables
|
|
200
|
|
106
|
|
306
|
Net
Cash generated from operations attributable to discontinued
operations
|
|
337
|
|
218
|
|
382
|
|
|
|
|
|
|
|
Cash flow from investing activities
|
|
|
|
|
|
|
Purchases of property, plant and
equipment
|
|
(44)
|
|
(16)
|
|
(9)
|
Net
cash used in discontinued investing activities
|
|
(44)
|
|
(16)
|
|
(9)
|
|
|
|
|
|
|
|
Cash flow from financing activities
|
|
|
|
|
|
|
Principal elements of lease
payments
|
|
(251)
|
|
(211)
|
|
(419)
|
Loan repayments
|
|
-
|
|
-
|
|
(80)
|
Net
cash used in discontinued financing activities
|
|
(251)
|
|
(211)
|
|
(499)
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of
year
|
|
40
|
|
162
|
|
162
|
Net
cash flows (used in)/generating from operating, investing and
financing activities
|
|
42
|
|
(9)
|
|
(126)
|
Differences on exchange
|
|
-
|
|
|
|
4
|
Cash and cash equivalents at end of year
|
|
82
|
|
153
|
|
40
|
5 Earnings
Per Share
|
|
Period to
|
|
Period to
|
|
Period to
|
|
|
30 June
|
|
30 June
|
|
31 December
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
£'000
|
|
£'000
|
|
£'000
|
|
|
|
|
|
|
|
Basic profit/(loss) per share from:
|
|
|
|
|
|
|
Continuing Operations
|
|
0.16p
|
|
(1.46p)
|
|
(1.46p)
|
Discontinued Operations
|
|
(0.07p)
|
|
(0.08p)
|
|
(0.58p)
|
Diluted profit/(loss) per share from:
|
|
|
|
|
|
|
Continuing Operations
|
|
0.16p
|
|
(1.40p)
|
|
(1.39p)
|
Discontinued Operations
|
|
(0.06p)
|
|
(0.08p)
|
|
(0.55p)
|
Basic profit/(loss) per share has been
calculated by dividing the loss attributable to shareholders by the
weighted average number of shares in issue during the
period.
Diluted profit/(loss) per share has been
calculated after adjusting the weighted average number of shares
used in the basic calculation to assume the conversion of all
potentially dilutive shares, such as share option
awards.
The number of shares used in calculating basic
and diluted profit/(loss) per share are reconciled
below:
|
|
30 June
|
|
30 June
|
|
31 December
|
|
|
2024
|
|
2023
|
|
2023
|
Weighted average number of ordinary
shares (000s) for the purposes of basic earnings per
share
|
|
64,935
|
|
64,802
|
|
64,869
|
Effect of dilutive potential
ordinary shares (000s)
|
|
3,441
|
|
3,142
|
|
3,441
|
Weighted average number of ordinary shares (000s) for the
purposes of diluted profit/(loss) per share
|
|
68,376
|
|
67,944
|
|
68,310
|
6 Fixed
Assets
|
Freehold land and
buildings
|
Right of Use
Assets
|
Leasehold land and
buildings
|
Leasehold
improvements
|
Fixtures, fittings and
equipment
|
Assets
under
construction
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
At 1 Jan 2024
|
16,999
|
23,244
|
27,020
|
3,253
|
1,039
|
2,154
|
73,709
|
Transfers
|
2,114
|
-
|
-
|
-
|
-
|
(2,114)
|
-
|
Additions
|
2,688
|
-
|
-
|
20
|
585
|
2,392
|
5,685
|
Depreciation
|
(163)
|
(1,037)
|
(94)
|
(161)
|
(231)
|
-
|
(1,686)
|
IFRS 16 Lease
Modification
|
-
|
321
|
-
|
-
|
-
|
-
|
321
|
Exchange Differences
|
(7)
|
(368)
|
-
|
65
|
(60)
|
-
|
(370)
|
Revaluation
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
At
30 June 2024
|
21,631
|
22,160
|
26,926
|
3,177
|
1,333
|
2,432
|
77,659
|
At 1 Jan 2023
|
11,717
|
29,464
|
26,203
|
3,454
|
1,220
|
-
|
72,058
|
Transfers
|
-
|
-
|
-
|
154
|
(194)
|
40
|
|
Additions
|
-
|
-
|
-
|
-
|
183
|
-
|
183
|
Depreciation
|
(113)
|
(1,146)
|
(298)
|
(215)
|
(146)
|
-
|
(1,918)
|
IFRS 16 Lease
Modification
|
-
|
29
|
-
|
-
|
-
|
-
|
29
|
Exchange Differences
|
(260)
|
(479)
|
-
|
(1,014)
|
(287)
|
(2)
|
(2,042)
|
At
30 June 2023
|
11,344
|
27,868
|
25,905
|
2,379
|
776
|
38
|
68,310
|
At 1 Jan 2023
|
11,717
|
29,464
|
26,203
|
3,454
|
1,220
|
-
|
72,058
|
Transfers
|
-
|
-
|
-
|
154
|
(194)
|
40
|
-
|
Reclassification as held for
sale
|
-
|
(3,858)
|
-
|
-
|
(26)
|
-
|
(3,884)
|
Additions
|
2,522
|
-
|
-
|
4
|
337
|
2,114
|
4,977
|
Depreciation
|
(169)
|
(2,408)
|
(185)
|
(318)
|
(266)
|
-
|
(3,346)
|
Impairment
|
-
|
(83)
|
-
|
(65)
|
-
|
-
|
(148)
|
IFRS 16 Lease
Modification
|
-
|
323
|
-
|
-
|
-
|
-
|
323
|
Revaluation
|
2,902
|
-
|
1,002
|
-
|
-
|
-
|
3,904
|
Exchange Differences
|
27
|
(194)
|
-
|
24
|
(32)
|
-
|
(175)
|
At
31 December 2023
|
16,999
|
23,244
|
27,020
|
3,253
|
1,039
|
2,154
|
73,709
|
7
Borrowings
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
30 June
|
|
30 June
|
|
31 December
|
|
2024
|
|
2023
|
|
2023
|
|
£'000
|
|
£'000
|
|
£'000
|
At
amortised cost
|
|
|
|
|
|
Bank Loan repayable within one
year
|
349
|
|
1,108
|
|
1,000
|
Property finance
liability
|
3
|
|
-
|
|
-
|
Loan arrangement fees
|
(85)
|
|
-
|
|
(68)
|
|
267
|
|
1,108
|
|
932
|
|
|
|
|
|
|
Bank Loans repayable within more
than one year
|
19,495
|
|
15,495
|
|
15,180
|
Property finance
liability
|
7,175
|
|
7,087
|
|
7,174
|
Loan arrangement fees
|
(243)
|
|
(28)
|
|
-
|
|
26,427
|
|
22,554
|
|
22,354
|
In January 2024, the Group refinanced its
existing borrowings into a single £16.0 million Term Loan and added
a new £2.5 million Revolving Credit Facility ("RCF") to support
future growth plans. The new Term Loan and RCF are for 5 years and
were provided by existing lender HSBC.
The Term Loan interest rates are £4.4 million
at 3.955%, £10.0 million at SONIA but capped at 4.75% with a floor
of 3% and £1.6 million at SONIA, all with an additional margin of
2.6%. The RCF has a rate of SONIA plus a margin of 2.85%. The Term
Loan is repayable at £0.1 million per quarter from March 2025
together with a final payment at completion. Interest on both the
Term Loan and RCF is payable quarterly from March 2024.
The Group have entered into two hedging
arrangements on the term loan, one being an interest rate swap of
3.955% for £4.4 million, and the other being a cap and collar with
a floor of 3% and a cap of 4.75% for £10.0 million. The Group have
decided not to apply hedge accounting on these two transactions and
will record any fair value movements through the income statement.
The fair value of these financial assets at 30 June 2024 is £26k
(30 June 2023: £nil).
The Term Loan replaces the previous interest
only £12.7 million facility with HSBC and enabled the repayment of
the outstanding CBILS loan of £3.3 million, which carried a
significantly higher interest rate.
In June 2024, the Group acquired a freehold
property located in Brighton, United Kingdom, for a consideration
of £2.3 million, funded through both the Group's existing cash
balances, and a £1.2 million loan from the trustees of the Sheldon
Pension Fund and Sentpark Capital Limited.
The loan will be made to Safe Hostels Limited
(a 100% owned subsidiary of Safestay plc) with Safestay plc
providing a written guarantee. The interest rate on the loan is 1%
per month and is serviced monthly, plus there are arrangement and
exit fees of 1% each. The repayment date is 18 months after the
drawdown date.
8 Deferred
Tax
The adoption of the amendments to IAS 12
effective 1 January 2023 , resulted in an increase in deferred tax
assets of £5.8 million, an increase in deferred tax liabilities of
£5.4 million and an increase in brought forward retained earnings
of £0.4 million as at 1 January 2023. These arise from timing
difference between right-of-use assets and lease liabilities under
IFRS 16.
The adoption of the amendments results in an
increase in deferred tax assets of £5.6 million, an increase in
deferred tax liabilities of £5.0 million, an increase in brought
forward retained earnings of £0.4 million as at 30 June 2023 and a
decrease in tax charges of £0.2 million.
9 Prior
Year Restatements
Following a review of the share options
workings for the year ended 31 December 2023, it was noted that in
prior years 1.4 million share options in relation to option holders
who had since left the business and were no longer entitled to
those options, had not been cancelled. The impact of this has been
that the share option charge in prior years has been overstated.
Therefore a prior year adjustment to the 1 Jan 2023 comparatives
has been made in respect of this which has resulted in a reduction
in the share based payment reserve of £0.3m at 1 January 2023 and a
corresponding increase in retained earnings of £0.3m at 1 January
2023 and 30 June 2023.
10
Post Balance Sheet Events
On 1 August 2024, the Group surrendered the
lease for its 52-room hotel in Vienna (the "Hotel") to the Hotel's
landlord, Hotel la Prima GmbH. Under the terms of the surrender
agreement, the total consideration payable by Safestay is €532,000,
representing historic COVID-deferred rent. BOSU SBS Hotel GmbH, the
new tenant for the Hotel, has agreed to pay Safestay €275,000,
which will be used by the Company to pay down the consideration. In
addition, to complete the transaction Safestay will pay a further
€107,000 from a historic rent deposit account and €150,000 from the
Company's existing cash resources to settle the outstanding
balance.
On 8 August 2024, the Group announced an
acquisition of a leasehold property in Budapest, Hungary, by its
wholly owned subsidiary Safestay Hungary kft.
Safestay Hungary kft has signed a five-year
lease for the property from Curzon Capital kft and under the terms
of the agreement has the option to extend this over two additional
five-year terms. The first eight months of the property's €150,000
annual rent will be waived while Safestay obtains the required
licence to operate the property as a hostel and, subsequently,
refurbishes the property at an anticipated cost of
€600,000.
Should Safestay be unable to secure the correct
licence, the agreement will be terminated. Once operational, the
Budapest hostel is expected to contribute estimated revenue of
approximately €350,000 and EBITDA after rent of €50,000 to the
Group during its first year of operation. This is expected to
increase as the site matures.