Hostel chain Safestay reported a jump in revenue following “positive summer trading”, but pre-tax losses climbed following the introduction of a new accounting standard.
Safestay revenue rose 24 per cent from £6.5m to £8.1m during the sixth months ending 30 June, while like-for-like sales grew four per cent.
The company’s pre-tax loss widened 14.4 per cent to £904,000. Safestay said £300,000 of the loss related to the introduction of the new IFRS 16 accounting standard, and a further £300,000 related to expansion projects.
The company forecasted full-year revenues exceeding £17m.
Shares in the hostel operator rose following the publication of the results, and were 4.76 per cent up just after midday.
Safestay reported a six per cent increase in its average bed rate to £19.50, up from £18.40 for the same period in 2019.
The chain now operates 16 hostels (including four under development) across four UK and nine European cities, with approximately 4,000 beds.
Safestay completed an extension of its Elephant & Castle hostel during the first half, which it said had increased the branch’s valuation by over £10m.
Earlier this month it announced the acquisition of a hotel in Glasgow for £3.15m, which Safestay said has the potential to be converted into a 200-bed hostel.
Chairman Larry Lippman said Safestay is in “an enviable position to continue its positive growth trajectory, building a portfolio of well positioned hostels under a premium, contemporary hostel brand”.
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