Safestay (SSTY) operates a string of contemporary hostels in the UK and mainland Europe, and the first six months of this year have seen some pretty significant changes. A sale and leaseback agreement was secured on its Elephant & Castle and Edinburgh hostels, which raised £12.6m, and this helped to finance the purchase of seven European hostels, taking the number of beds from 1,526 to 2,574, in addition to 34 apartments.
There was little effect on visitor numbers as a result of recent terrorist attacks, and revenue growth at the Kensington Holland Park hostel grew by a third, with occupancy up by 14.3 percentage points. Overall occupancy for the four UK hostels rose from 63.7 per cent to 71.6 per cent. This helped to lift cash profits by nearly two-thirds to £1.3m. A total of 157,984 bed nights were sold in the first six months of 2017, up from 133,444 a year earlier. Demand at the Elephant & Castle hostel at times exceeded supply, and planning consent has been secured to develop an additional 80 beds.
New hostel openings were made in Paris, Prague, Barcelona, Madrid and Lisbon, although work will not be completed on the Paris hostel until 2019.
Analysts at Canaccord Genuity have upgraded their forecast for cash profits in the year to December 2017 to £3.2m (from £2m in 2016).
