Safestay revenues and earnings on the rise as hostel network expands

Hostel operator Safestay posted improved full-year revenues and adjusted underlying earnings on Monday after having nearly doubled the size of its network during 2019.

Safestay recorded a 25% revenue increase to £18.3m, with like-for-like revenues up 7% year-on-year. Adjusted EBITDA meanwhile grew 11% to £3.8m.

The AIM-listed group said it achieved a 77.3% occupancy in 2019, while also registering a 5% increase in average bed rate to £21.3m.

Food and beverage, previously identified by the group as being a growth opportunity, was up 43% in 2019 and supported by the refurbishment of three restaurants in Barcelona, Elephant & Castle and Edinburgh.

Safestay also highlighted that the integration of new hostels acquired in 2019 was proceeding "well" with the investment made over the last three years in centralised IT and booking systems ensuring that incoming sites could be integrated "efficiently, and immediately".

Looking ahead, Safestay said the financial performance and the investment made in 2019 had created "real momentum" going into 2020.

"While still very early in the year, performance in the first month of 2020 and forward bookings for Q1 are very encouraging, a positive signal for the coming year, which will also benefit from the acquisitions made last year."

As of 1105 GMT, Safestay shares were up 3.51% at 38.30p.