Safestay acquires 161-bed Tuscan hostel for €3.25m
Hostels operator Safestay acquired the freehold of Hostel Pisa in Italy's famous Tuscany region for €3.25m on Thursday, satisfied in cash from the group's existing resources.
Safestay told investors the acquisition of the 161-bed hostel was part of its strategy to establish a "pan-European network of premium hostels" located in popular tourist cities.
With the addition of Hostel Pisa, Safestay's portfolio rose to fourteen hostels and with the firm's recent fundraising and pipeline of potential sites, the AIM-listed group felt it was "well placed" to reach its shorter-term target of owning and operating 20 hostels.
In its last trading year, Hostel Pisa generated revenues of €800,000 and underlying earnings of €300,000. The only further investment Safestay anticipates making into the property will be to cover the costs of re-branding the building to become a Safestay Hostel at an approximate cost of €50,000.
Chairman Larry Lipman said: "Hostel Pisa is an excellent addition and a natural fit within our portfolio.
"Currently it operates independently, and we are confident that within the Safestay portfolio it has the potential to excel, taking advantage of our brand, purchasing power and ability to promote Pisa to guests staying in any of our other hostels."
Limpan also added that the group as a whole had been trading well and in line with market expectations of late, with "strong" overall demand, with bookings for the summer looking "good".
As of 0900 BST, Polymetal shares had climbed 3.69% to 33.70.