TIDMSSTY
RNS Number : 4851J
Safestay PLC
12 September 2016
Safestay plc
("Safestay" or "the Company" or "the Group")
Interim Results
For the Six Months to 30 June 2016
Safestay (AIM: SSTY), the owner and operator of a new brand of
contemporary hostel, announces its unaudited interim results for
the six months ended 30 June 2016
Operational Highlights
-- Average bed price stable at GBP18 per night, within the
current range of GBP18-20, and expected to be stable through to
year-end
-- Introduction of direct booking channel which is performing
ahead of expectations; ranked 2(nd) as on-line revenue channel in
terms of revenue in the business
-- Excellent guest satisfaction scores in line with premium positioning
-- Capturing c.1000 guest records/week strengthening the Brand marketing activity
-- Successful transition to new Group property management system and multi-property web site
-- Pleasing like-for-like growth at our Elephant & Castle
site offset by short term headwinds facing our Holland Park
hostel
Financial Highlights
-- Over twofold increase in revenues in H1 2016 to GBP3.29m (H1 2015: GBP1.40m)
-- Restructure of breakfast offer and focus on ancillary
revenues has seen H1 non-accommodation revenues move from 4% to 11%
of total revenues on a like-for-like basis across Elephant &
Castle and York
-- Strong increase in EBITDA in H1 2016 to GBP0.78m (H1 2014: GBP0.26m)
-- The portfolio of hostels are a mix of freeholds and a
leasehold with the freeholds externally valued at GBP32.6m.
Elephant & Castle revalued at GBP16.0m on 21 July 2016 adding a
further GBP3.7m to the total portfolio valuation
-- Net asset value per share increased by 14.2p to 58.0p at the period end (2015: 43.8p)
Larry Lipman, Chairman of Safestay, said:
"The business is progressing well, like-for-like revenues and
margins are improving and we have now successfully put in place the
systems and infrastructure to support multiple hostels as part of
our growth planning.
We are building a premium hostel brand and are gratified that
our customer feedback shows the increasing understanding of
Safestay's premium positioning. Notwithstanding the current trading
headwinds impacting the London market, and more directly Holland
Park, the Board remain confident in our outlook with 2016 full-year
EBITDA projected to be at the lower end of our expectations. We
continue to see opportunity for expansion and to seek new sites
amongst the principal western gateway cities of Europe."
Enquiries
+44 (0) 20 8815
Safestay plc 1600
Larry Lipman, Chairman
Canaccord Genuity Limited +44 (0) 20 7523
(Nominated Adviser and Broker) 8000
Bruce Garrow
Chris Connors
Ben Griffiths
Novella
+44 (0) 20 3151
Tim Robertson 7008
Toby Andrews
For more information visit: www.safestay.com
Chairman's statement
Introduction
I am pleased to present the unaudited interim results of
Safestay plc for the six months to 30 June 2016. We have made good
progress, more than doubling the revenues of the Group and
investing in the systems and infrastructure so that we can now
efficiently support multiple hostels.
Our hostels in London Elephant & Castle, London Holland
Park, York and Edinburgh, with a portfolio bed count of over 1,500,
positions Safestay as the UK's leading premium tourist hostel
business. I am particularly satisfied with the quality of our
fledgling hostel group in terms of location, real estate and
standard of customer offering. These fundamentals underpin our
business, as a premium hostel brand.
The European tourism market has been facing some headwinds
through 2016 driven primarily by acts of terrorism, softening
economies and political instability which has notably had a well
reported impact on London's hospitality sector performance. The
Group's exposure to this market, with two hostels, compounded by
Holland Park being a new entrant, has created a drag on the 2016
performance. It is encouraging to note Elephant & Castle is
recording like-for-like revenue growth of 4.5% against this
challenging backdrop and I remain confident Holland Park will reach
our expected trading performance within the original target three
year maturation period.
Operational Review
I am particularly pleased that the teams have improved our
operational efficiency and grown EBITDA as a percentage of revenues
in all our hostels. This positions the business well to capitalise
on strengthening revenues as the London market returns to more
normal trading conditions.
Elephant & Castle saw revenues grow 7.7% and EBITDA by
31.1%, York's revenues grew by 0.6% and EBITDA by 51.5% and
Edinburgh, against pre-acquisition unaudited numbers, grew revenues
by 2.2% and EBITDA by 16.8%. It is particularly encouraging to see
efficiency gains across these hostels ahead of the growth in
revenue.
The refurbishment of the Edinburgh hostel, which was undertaken
in the low season allowing the business to trade through, is now
complete. This activity had an impact on the trading performance in
H1, despite which the business grew revenues year on year. Now the
works are complete the interim branding of Smart City Hostels by
Safestay will be phased out during H2 2016 simplifying brand
communications going forward. From a guest perspective, across the
Group the net promoter score of over 1,500 guests was 45, up from
42 for H2 2015. This is a very positive absolute score and an
improving trend. Holland Park consistently rates highest in our
portfolio for guest satisfaction.
Elephant & Castle has seen non-accommodation revenues jump
from 4% to 11% of total revenue from H1 2015 to 2016. This is a
result of moving to charging for breakfasts and focusing on group
food and ancillary revenues. The hostel's improving efficiencies
mean the additional revenues have been delivered without new cost.
The area around Elephant and Castle continues to improve as it
benefits from significant investment in regeneration, and demand
from groups and individual travellers remains encouraging. These
fundamentals underpin both the trading outlook for the hostel and
the growth in real estate value.
York is seeing strong improvement in EBITDA against modest
revenue growth. Robust revenue management has seen the strongest
average bed rates in the Group over the popular weekends through
Q2. The mid-week groups business continues to build and the hostel
is on track to deliver its projected mature trading numbers.
Holland Park is still within its first year of trading and the
business is being efficiently run and delivering high levels of
guest satisfaction. Revenues are building but at the lower end of
management's expectations which is influencing the overall Group
performance. Significant focus is being directed to accelerate the
maturation process including the reconfiguration of the
accommodation to enable greater conversion of group enquiries. We
remain confident this hostel will achieve its projected trading
potential within the three year build-up period.
H1 2016 saw the execution of a major systems project which was
delivered successfully through January and February. There were
three elements to the project; the finalisation of the
multi-property web site, the development of a direct internet
booking engine and the changeover to a new Group wide property
management system.
The website is performing well with the overall conversion
percentage sitting favourably to industry averages. A number of
digital marketing initiatives have been implemented through the
period to drive quality traffic to the site and improve conversion.
The tools are in place to measure the ROI and target future
investment.
The launch of the new internet booking engine (IBE) has been
particularly successful with it performing as the Group's #2 web
based channel within 3 months of being launched. IBE conversion
rates are ahead of industry norms and further analysis and
improvements are being made to build on this encouraging start in
building Safestay's direct channel strategy. As importantly, the
Group is harvesting valuable guest data and business insights are
steering sales and marketing investment to further grow the direct
channel and drive revenues and profitability.
The new Group property management system (PMS) is at the heart
of the business and provides a platform for operating,
understanding, driving and ultimately growing the business. This is
transformational for the Group and will continue to add value as it
supports the Group's operational, growth and sales and marketing
activities.
The Group remains active in seeking new opportunities in target
gateway cities. Maintaining the quality of the portfolio and
acquiring in the right locations at the right price are key
fundamentals that will be followed. The Group incurred aborted
acquisition costs of GBP0.14m which will be incurred in H2.
Financial Review
For the period under review, the Company generated revenues of
GBP3.29m (2015*: GBP1.40m), the Group recorded an EBITDA of
GBP0.78m (2015*: GBP0.26m) and a loss before tax of GBP0.49m
(2015*: loss of GBP0.25m).
As a consequence, the Group reported a loss per share after tax
of 1.43p (2015* loss: 2.61p).
* Note that the comparable figures for 2015 are not
like-for-like as they exclude Edinburgh (acquired September '15)
and Holland Park (opened August '15) but do include costs
associated with pre-opening of Holland Park.
During H1 the Group invested in implementing a new systems
infrastructure which has delivered a platform and team that are now
capable of supporting a much bigger portfolio at only a marginal
increase in cost, positioning us well for future growth.
As at 30 June 2016, the Company had gross bank and loan note
borrowings of GBP18.16m (30 June 2015: GBP9.12m) secured against
its freehold properties with an average weighted interest cost of
3.85% (30 June 2015: 4.5%).
The Company has three freehold properties and one leasehold
property. As at 30 June 2016, its freehold property portfolio was
valued at GBP32.63m, which was increased by GBP3.74m following the
revaluation of Elephant & Castle in July 2016 on the back of
this site's strong operating performance.
The Holland Park property, in accordance with IAS 17, continues
to have the lease accounted for as a finance lease arrangement (see
notes 1 and 7). Over the 50 year lease period and using a discount
rate of 6.5% the capitalised value of the lease is GBP10.4m.
Net asset value per share increased by 14.2p to 58.0p at the
period end (2015: 43.8p).
The Board is not declaring the payment of an interim
dividend.
Outlook
Our ambition is to become the leading premium pan-European
hostel group and we continue to look for opportunities to grow the
business. We have the systems and infrastructure in place and we
are very focused on achieving this aim.
Notwithstanding the softer London market and the headwinds
facing our Holland Park site, there is plenty of encouragement in
the business performance and we remain confident in the outlook for
2016 and beyond. We look forward to reporting on further progress
as this fledgling business continues to grow.
Larry Lipman
Chairman
12 September 2016
Condensed consolidated
income statement Unaudited Unaudited Audited
6 months 6 months
to to Year to
30 June 30 June 31 December
2016 2015 2015
Note GBP000 GBP000 GBP000
---------- ---------- ------------
Revenue 1 3,288 1,400 4,023
Cost of sales (413) (145) (486)
Gross profit 2,875 1,255 3,537
Administrative expenses (2,685) (1,227) (3,327)
Operating profit 191 28 210
EBIT
------------------------------- ----- ---------- ---------- ------------
EBITDA* 784 258 661
Depreciation and amortisation 593 230 451
---------- ---------- ------------
Operating profit 191 28 210
------------------------------- ----- ---------- ---------- ------------
Finance income - 1 1
Finance costs (789) (278) (821)
Loss profit before tax (598) (249) (610)
Tax 107 - (8)
---------- ---------- ------------
Loss for the financial
period attributable to
owners of the parent
company (491) (249) (602)
========== ========== ============
Basic earnings/(loss)
per share in pence 2 (1.43) (2.61) (2.52)
Diluted earnings/(loss)
per share in pence 2 (1.43) (2.61) (2.52)
The revenue and operating result for the periods is derived from
acquired and continuing operations in the United Kingdom
* Earnings before interest, tax, depreciation and
amortisation
Condensed consolidated
statement of comprehensive
income Unaudited Unaudited Audited
6 months 6 months
to to Year to
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
---------- ---------- ------------
Loss for the period (491) (249) (602)
---------- ---------- ------------
Other comprehensive income
Items that will not be
reclassified to profit
and loss
Revaluation of freehold
land and buildings 3,876 33 152
---------- ---------- ------------
Total comprehensive income
for the period attributable
to owners of the parent
company 3,385 (216) (450)
========== ========== ============
Condensed consolidated
statement of
financial position Unaudited Unaudited Audited
30 June 30 June 31 December
2016 2015 2015
Note GBP000 GBP000 GBP000
---------- ---------- ------------
Non-current assets
Property, plant and
equipment 4 45,959 27,881 42,327
Intangible assets 5 1,282 - 1,352
Goodwill 525 - 525
---------- ---------- ------------
Total non-current assets 47,765 27,881 44,204
---------- ---------- ------------
Current assets
Stock 94 2 19
Trade and other receivables 933 508 594
Deferred tax 209 21 -
Derivative financial
instruments 13 6 20
Cash and cash equivalents 1,398 842 1,060
Total current assets 2,647 1,379 1,693
---------- ---------- ------------
Total assets 50,412 29,260 45,897
---------- ---------- ------------
Current liabilities
Loans 6 689 387 693
Finance lease obligations 7 32 37 65
Trade and other payables 1,930 1,427 1,062
Deferred tax 102 - -
2,753 1,851 1,820
---------- ---------- ------------
Non-current liabilities
Bank loans, finance
lease and convertible
loan notes 6 17,467 8,555 17,391
Finance lease obligations 7 10,283 10,377 10,196
Derivative financial
instruments 60 45 36
---------- ---------- ------------
Total non-current liabilities 27,810 18,977 27,623
---------- ---------- ------------
Total liabilities 30,563 20,828 29,443
---------- ---------- ------------
Net assets 19,849 8,432 16,454
========== ========== ============
Equity
Share capital 7 342 192 342
Share premium account 14,504 6,410 14,504
Merger reserve 1,772 1,772 1,772
Share-based payment
reserve 35 11 23
Revaluation reserve 4,233 239 358
Retained earnings (1,037) (192) (545)
---------- ---------- ------------
Total equity attributable
to owners of the parent
company 19,849 8,432 16,454
========== ========== ============
Condensed consolidated
statement of cash
flows Unaudited Unaudited Audited
6 months 6 months
to to Year to
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
------------- ------------- -------------
Loss before tax (598) (249) (610)
Adjustment for:
Depreciation 523 235 451
Amortisation 70 - -
Finance costs 789 278 821
Finance income - (1) (1)
Share-based payments charge 12 6 17
Changes in working capital:
Decrease in stock (76) 2 (15)
Increase in trade and
other receivables (339) (341) (420)
Increase in trade and
other payables 1,162 762 400
Net cash generated
from operating activities 1,543 692 643
------------- ------------- -------------
Cash flows from investing
activities
Interest received - 1 1
Purchase of property,
plant and equipment (279) (12,821) (4,082)
Acquisition of business - - (14,150)
Net outflow from investing
activities (279) (12,820) (18,231)
------------- ------------- -------------
Cash flows from financing
activities
New loans - 11,434 10,500
Loan arrangement fees - - (81)
Issue of ordinary
shares for cash - - 8,535
Fees relating to share
issue costs - - (1,041)
Dividend paid - (58) (58)
Interest paid (404) (553) (620)
Loan repayments (193) (1,164) (1,897)
Lease paid (330) - -
Net cash inflow from
financing activities (927) 9,659 15,381
------------- ------------- -------------
Net increase in cash
and cash equivalents 337 (2,468) 3,310
Cash and cash equivalents
at beginning of period 1,060 3,310 (2,250)
------------- ------------- -------------
Cash and cash equivalents
at end of period 1,397 842 1,060
============= ============= =============
Consolidated Statement of Changes in Equity
For the six months to 30 June 2016 (unaudited)
Share Share Merger Share Revaluation Retained Total
Capital premium Reserve based Reserve earnings equity
GBP'000 account GBP'000 payment GBP'000 GBP'000 GBP'000
GBP'000 reserve
GBP'000
Balance at
31 December
2015 342 14,504 1,772 23 358 (545) 16,454
Comprehensive
income
Loss for the
year - - - - - (492) (491)
Other comprehensive
income - - - - 3,875 - 3,876
-------- -------- -------- -------- ----------- --------- --------
Total comprehensive
income - - - - 3,875 (492) 3,385
-------- -------- -------- -------- ----------- --------- --------
Transactions
with owners
Issue of shares - - - - - - -
Dividend paid - - - - - - -
Share based
payment charge
for the period - - - 12 - - 12
-------- -------- -------- -------- ----------- --------- --------
Balance at
30 June 2016 342 14,504 1,772 35 4,233 (1,037) 19,849
======== ======== ======== ======== =========== ========= ========
For the six months to 30 June 2015 (unaudited)
Share Share Merger Share Revaluation Retained Total
Capital premium Reserve based Reserve earnings equity
GBP'000 account GBP'000 payment GBP'000 GBP'000 GBP'000
GBP'000 reserve
GBP'000
-------- -------- -------- -------- ----------- --------- --------
Balance at
31 December
2014 192 6,410 1,772 6 206 115 8,701
Comprehensive
income
Loss for the
year - - - - - (249) (249)
Other comprehensive
income - - - - 33 - 33
-------- -------- -------- -------- ----------- --------- --------
Total comprehensive
income - - - - 33 (249) (216)
-------- -------- -------- -------- ----------- --------- --------
Transactions
with owners
Issue of shares - - - - - - -
Dividend paid - - - - - (58) (58)
Share based
payment charge
for the period - - - 5 - - 5
-------- -------- -------- -------- ----------- --------- --------
Balance at
30 June 2015 192 6,410 1,772 11 239 (192) 8,432
======== ======== ======== ======== =========== ========= ========
For the year ended 31 December 2015 (audited)
Share Share Merger Share Revaluation Retained Total
Capital premium Reserve based Reserve earnings equity
GBP'000 account GBP'000 payment GBP'000 GBP'000 GBP'000
GBP'000 reserve
GBP'000
-------- -------- -------- -------- ----------- --------- --------------
Balance at
31 December
2014 192 6,410 1,772 6 206 115 8,701
Comprehensive
income
Loss for the
year - - - - - (602) (602)
Other comprehensive
income - - - - 152 - 152
-------- -------- -------- -------- ----------- --------- --------------
Total comprehensive
income - - - - 152 (602) (450)
-------- -------- -------- -------- ----------- --------- --------------
Transactions
with owners
Issue of shares 150 8,094 - - - - 8,244
Dividend paid (58) (58)
Share based
payment charge
for the period - - - 17 - - 17
-------- -------- -------- -------- ----------- --------- --------------
Balance at
31 December
2015 342 14,504 1,772 23 358 (545) 16,454
======== ======== ======== ======== =========== ========= ==============
1. Basis of preparation and accounting policies
The condensed interim consolidated financial statements of the
Company and its subsidiaries ("the Group") for the 6 months to 30
June 2016 ("the period") have been prepared using accounting
policies consistent with International Financial Reporting
Standards (IFRS) as adopted by the European Union. The financial
information presented above does not constitute statutory financial
statements as defined by section 435 of the Companies Act 2006.
Copies of this announcement are available from the Company's
registered office at 1a Kingsley Way, London N2 0FW and on its
website, www.safestay.com.
These condensed interim financial statements have not been
audited, do not include all of the information required for full
annual financial statements and should be read in conjunction with
the Group's consolidated annual financial statements for the period
ended 31 December 2015. While the financial figures included within
this interim report have been computed in accordance with IFRS
applicable to interim periods, this report does not contain
sufficient information to constitute an interim financial report as
set out in International Accounting Standard 34 Interim Financial
Reporting.
Revenue
Revenue is stated net of VAT and comprises revenues from
overnight hostel accommodation, income from the rental of student
accommodation during the academic year and the sale of ancillary
goods and services. Accommodation and the sale of ancillary goods
and services is recognised when provided. Income from the rent of
student accommodation is recognised on a straight line basis over
the academic year to which the rent relates.
The sale of ancillary goods comprises sales of food, beverages
and merchandise.
Deferred income comprises deposits received from customers to
guarantee future bookings of accommodation. This is recognised as
revenue once the bed has been occupied.
Leases
The Group as lessor:
Rental income from operating leases is recognised on a
straight-line basis over the term of the relevant lease.
The Group as lessee:
Assets held under finance leases are recognised as assets of the
group at the present value of the lease payments at the inception
of the lease. The corresponding liability to the lessor is included
in the balance sheet as a finance lease obligation.
Lease payments are apportioned between finance expenses and
reduction in lease obligation so as to achieve a constant rate of
interest on the remaining balance of the liability. Finance
expenses are recognised immediately in the profit and loss
account.
All other leases are classified as operating leases. Operating
leases are recognised in the income statement on a straight line
basis over the life of the lease.
Property, plant and equipment
Freehold property is stated at fair value and revalued annually.
Valuation surpluses and deficits arising in the period are included
in other comprehensive income. Fixtures fittings and equipment are
stated at cost less depreciation and are depreciated over their
useful lives. The applicable useful lives are as follows:
Fixtures, fittings and equipment 3 years
Freehold properties 50 years
Leasehold properties 50 years
Assets held as finance leases are depreciated over the shorter
of the lease term and their expected useful lives on the same basis
as owned assets.
Intangible assets
Intangible assets are initially recognised and measured at fair
market value.
Where an intangible has a determinable finite useful life, the
intangible asset is amortised on a straight-line basis over that
useful life. The applicable useful life is 11 years for the life of
the interest in the head lease.
2. Earnings per share Unaudited Unaudited Audited
6 months 6 months
to to Year to
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
---------- ---------- ------------
(Loss)/Profit for the
period attributable to
equity holders of the
company (491) (249) (602)
========== ========== ============
Weighted average number
of ordinary shares for
the purposes of basic
(loss)/ earnings per share 9,622 9,622 9,622
Effect of dilutive potential
ordinary shares - 6,545
---------- ---------- ------------
Weighted average number
of ordinary shares for
the purposes of diluted
(loss)/ earnings per share
('000's) 34,219 9,622 30,426
---------- ---------- ------------
Basic (loss)/ earnings
per share (1.43p) (2.61p) (2.52p)
---------- ---------- ------------
Diluted (loss)/ earnings
per share (1.43p) (2.61p) (2.52p)
---------- ---------- ------------
3. Dividend
No interim dividend has been declared.
4. Property, plant
and equipment
For the period from 1 January 2016 to 30 June 2016
(unaudited)
Freehold Leasehold Fixtures,
land and land and fittings
buildings buildings and equipment Total
GBP000 GBP000 GBP000 GBP000
----------- ----------- --------------- -------
Cost or valuation
At 1 January 2016 28,764 12,793 1,055 42,612
Additions 128 - 151 279
Revaluations 3,739 - 3,739
----------- ----------- --------------- -------
At 30 June 2016 32,631 12,793 1,206 46,630
----------- ----------- --------------- -------
Depreciation
At 1 January 2016 - 71 215 286
Charge for the period 142 126 255 523
Revaluations (137) - - (137)
----------- ----------- --------------- -------
At 30 June 2016 5 197 470 672
----------- ----------- --------------- -------
Net book value
30 June 2016 32,626 12,596 736 45,958
=========== =========== =============== =======
For the period from 1 January 2015 to 30 June 2015
(unaudited)
Freehold Leasehold Fixtures,
land and land and fittings
buildings buildings and equipment Total
GBP000 GBP000 GBP000 GBP000
----------- ----------- --------------- -------
Cost or valuation
At 1 January 2015 14,921 - 113 15,034
Additions - 13,011 67 13,078
Revaluations (42) - - (42)
----------- ----------- --------------- -------
At 30 June 2015 14,879 13,011 180 28,070
----------- ----------- --------------- -------
Depreciation
At 1 January 2015 - - 34 34
Charge for the period 75 130 25 230
Revaluations (75) - - (75)
----------- ----------- --------------- -------
At 30 June 2015 - 130 59 189
----------- ----------- --------------- -------
Net book value
30 June 2015 14,879 12,881 121 27,881
=========== =========== =============== =======
For the period from 1 January 2015 to 31 December
2015 (audited)
Freehold Leasehold Fixtures,
land and land and fittings
buildings buildings and equipment Total
GBP000 GBP000 GBP000 GBP000
----------- ----------- --------------- -------
Cost or valuation
At 1 January 2015 14,921 - 113 15,034
Additions 1,068 12,793 742 14,603
Acquisitions 12,775 - 200 12,975
----------- ----------- --------------- -------
At 31 December 2015 28,764 12,793 1,055 42,612
----------- ----------- --------------- -------
Depreciation
At 1 January 2015 - - 34 34
Additions 152 71 180 403
Charge for the period (152) - - (152)
----------- ----------- --------------- -------
At 31 December 2015 - 71 214 285
----------- ----------- --------------- -------
Net book value
At 31 December 2015 28,764 12,722 841 42,327
=========== =========== =============== =======
At 31 December 2014 14,921 - 79 15,000
=========== =========== =============== =======
At 30 June 2016, the carrying value of the Group's freehold and
leasehold property including fixtures and fittings was
GBP45,958,000 (30 June 2015: GBP27,881,000, 31 December 2015:
GBP42,327,000)
The directors valued the freehold properties using external
valuations prepared by Edward Symmons LLP for the York property and
Colliers International for the Edinburgh property which were
undertaken in 2014 and 2015 respectively. The valuation for
Elephant & Castle was undertaken by Cushman & Wakefield LLP
on behalf of the Group's bankers, Coutts & Co, in 2016 as part
of the Group's potential acquisition activity.
The valuations are based on the discounted cash flows technique
with a capitalisation rate of between 6.75% and 8% capitalisation
rate and a discount rate of between 8.75% and 10%, depending on the
property applied to forecasts of future earnings before interest,
taxation and depreciation (EBITDA). The revaluation surplus net of
applicable deferred income taxes was credited to other
comprehensive income and is shown in revaluation surplus.
Leasehold land and buildings additions comprise the capitalised
finance lease plus refurbishment costs incurred on the Holland Park
hostel.
The historical cost of freehold property is GBP28,892,000 (30
June 2015: GBP17,281,000, 31 December 2015: GBP27,764,000).
The Group has pledged freehold property with a carrying value of
GBP32,626,000 (30 June 2015: GBP14,879,000, 31 December 2015:
GBP28,764,000) to secure banking facilities and loan notes granted
to the Group.
5. Intangible Asset Unaudited Unaudited Audited
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
Cost
At beginning of period 1,400 - -
Acquisitions - - 1,400
---------- ---------- ------------
At end of period 1,400 - 1,400
---------- ---------- ------------
Amortisation
At beginning of period 48 - -
Charge for the period 70 - 48
---------- ---------- ------------
At end of period 118 - 48
---------- ---------- ------------
Net book value
At end of period 1,282 - 1,352
========== ========== ============
On the acquisition of the business on Smart City hostel in
Edinburgh the Director's identified an intangible asset in relation
the lease with the University of Edinburgh, which terminates in
2027.
6. Loans Unaudited Unaudited Audited
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
---------- ---------- ------------
At amortised cost
Bank loans 14,356 6,320 14,549
Convertible loan notes 3,800 2,800 3,800
18,156 9,120 18,349
Unamortised Borrowing
costs (230) (178) (265)
---------- ---------- ------------
17,926 8,942 18,084
---------- ---------- ------------
Loans repayable within
one year 689 387 693
Loans repayable after
more than one year 17,237 8,555 17,391
---------- ---------- ------------
17,926 8,942 18,084
---------- ---------- ------------
The repayment profiles of the loans as at 30 June 2016, 30 June
2015 and 31 December 2015 are as follows:
For the period from 1 January 2016 to 30 June 2016
(unaudited)
Convertible
loan notes Bank loans Total
GBP000 GBP000 GBP000
------------ ----------- -------
Due within one year 2,800 755 3,555
Between one and two years 1,000 755 1,755
Between two and five years - 12,846 12,846
After more than five years - - -
------------ ----------- -------
Balance at 30 June 2015 3,800 14,356 18,156
------------ ----------- -------
For the period from 1 January 2015 to 30 June 2015
(unaudited)
Convertible
loan notes Bank loans Total
GBP000 GBP000 GBP000
------------ ----------- -------
Due within one year - 350 350
Between one and two years - 350 350
Between two and five years 2,800 5,620 8,420
After more than five years - - -
------------ ----------- -------
Balance at 30 June 2015 2,800 6,320 9,120
------------ ----------- -------
For the period from 1 January 2015 to 31 December
2016 (audited)
Convertible
loan notes Bank loans Total
GBP000 GBP000 GBP000
------------ ----------- -------
Due within one year - 755 755
Between one and two years 3,800 755 4,555
Between two and five years - 13,039 13,039
After more than five years - - -
------------ ----------- -------
Balance at 30 June 2015 3,800 14,549 18,349
------------ ----------- -------
Each of the bank loans have a term of five years on which
interest is payable at between 3.00% and 3.25% over LIBOR. The
Group has given security to the bank including a first ranking
charge over the Group's freehold hostels in Elephant & Castle,
York and Edinburgh and a legal charge over the Holland Park
property. There were no breaches in bank loan covenants as at 30
June 2016.
Convertible loan note terms:
Secured (GBP'000) Unsecured
(GBP'000)
Value 2,800 1,000
Issued 2 May 2014 11 September
2015
Term 3 years from 3 years from
issue issue
Coupon rate 6% 5%
Conversion price per Ordinary
Share at the option of the
note holder, at any time prior
to redemption 57.5p 70.0p
Secured Convertible loan notes are by way of a charge over the
Group's hostel in Elephant & Castle, ranking after the security
granted to the bank.
All of the Group's loans disclosed above comprise borrowings in
sterling.
7. Obligations under Finance
Leases Unaudited Unaudited Audited
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
---------- ---------- ------------
Amounts payable under
finance leases:
Within one year 32 37 65
In the second to fifth
years inclusive 169 162 158
After five years 10,114 10,215 10,038
---------- ---------- ------------
Present value of future
lease obligations 10,315 10,414 10,261
========== ========== ============
The group has treated the Holland Park lease as a finance lease
on the basis that the present value of the lease payments
constitutes the substantial part of a theoretical freehold
valuation. The average effective borrowing rate was 6.55%. The
lease is on a fixed repayment basis and no arrangements have been
entered into for contingent rental payments.
The fair value of the group's lease obligations is approximately
equal to their carrying amount. The Group's finance leases
disclosed above are in sterling.
8. Share Capital Unaudited Unaudited Audited
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
---------- ---------- ------------
Allotted, issued and fully
paid
34,219,135 Ordinary Shares
of 1p each (30 June 2015:
19,244,519, 31 December
2015: 34,219,135) 342 192 342
---------- ---------- ------------
At the 31 December 2016, the ordinary shares rank pari passu.
There are no changes to the voting rights of the ordinary shares
since the balance sheet date. The increase is the result of share
issued from the placing and open offer on 10 September 2015.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UGUWWBUPQGQB
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