Solid demand drives Safestay's first half

Hostel owner and operator Safestay announced its unaudited interim results for the six months ended 30 June on Tuesday, reporting “good demand” across its portfolio, leading to a strong first half trading performance.

The AIM-traded company said it saw a 60% increase in total revenues to £6.5m, including acquisitions made in 2017.

Group occupancy improved to 76.1% from 71.6%, with hostels EBITDA rising 50% to £2.4m.

Safestay’s group EBITDA remained stable at £1.3m, precisely in line with 2017’s first-half figure, which the board said reflected planned investment in its central organisation.

The firm’s loss before tax was £0.8m, including £0.4m of exceptional costs, widening from a loss before tax of £0.4m a year ago, after exceptional costs of £0.1m.

Net losses per share totalled 2.30, widening from 1.08p a year ago.

“This has been a successful six months,” said Safestay chairman Larry Lipman.

“The group is performing to plan and the new hostels have been quick to integrate under the Safestay brand and operating structure.”

Lipman said that, alongside benefitting from the continuing growth in awareness and popularity of modern hostels, the company had “significant opportunities” internally to increase returns from its young portfolio, and would also shortly benefit from the investment it had made in expanding its Elephant & Castle and Madrid hostels.

“Safestay is therefore well positioned for further organic growth and to continue to pursue our acquisition programme.”