Safestay Plc · LSE:SSTY
Safestay — H1 2024 Earnings Presentation
26 slides from Safestay's earnings presentation, Sep 11, 2024
Slide 1: Safestay plc H1 Results 2024
Safestay plc H1 Results 2024 11 September 2024 Paul Hingston, CFO Peter Zielke, COO 1
Slide 2: Disclaimer
Disclaimer This Presentation does not constitute, or form part of, any offer or invitation to sell, allot or issue or any solicitation of any offer to purchase or subscribe for any securities, nor shall it (or any part of it) or the fact of its distribution form the basis of, or be relied upon in co
Slide 3: Agenda
Agenda 01 02 03 04 05 Introduction Financial Strategic Outlook Q&A to Safestay review update Peter Zielke Peter Zielke Paul Hingston Peter Zielke Peter Zielke Paul Hingston 3
Slide 4: Introduction to Safestay
01 Introduction to Safestay 4
Slide 5: Highly experienced management team
Highly experienced management team Larry Lipman, Peter Zielke, Paul Hingston, Executive Chairman COO CFO Founded Safestay in 2011 Joined Safestay in Joined Safestay in February 2023. February 2022. Responsible for the Group’s strategy and More than 25 years’ Extensive UK and business development, ex
Slide 6: One of Europe's largest hostel groups
One of Europe’s Edinburgh largest hostel groups Glasgow York • Growing portfolio of hostels and London Kensington Berlin Warsaw hotels in premium locations across London Elephant & Castle destination cities Brighton Brussels Prague (2025) • Current estate comprises nearly- Bratislava 4,000 beds, sha
Slide 7: Large market provides exciting growth opportunity
Large market provides exciting growth opportunity • The global hostel market is expected to reach US$8.94bn by 2029 * • Growth driven by consumer moves to affordability; increasingly ‘lifestyle’ customer proposition; rise in global travel by Millennials and Gen Z • Highly fragmented with few compani
Slide 8: Investment case
Investment case • Experienced management team with a strong brand- management background and operational expertise • Established operator in a fast-growing, fragmented hostel market • Proven track record against a long-term expansion strategy • Significant long-term prospects • Well-invested platfor
Slide 9: Financial summary
Financial summary Unaudited Unaudited Movement H1 2024 H1 2023 Occupancy 70.6% 68.8% 1.8% Average Bed Rate (£) 22.15 23.18 (4.5%) Total Revenue per available bed (T RevPab) 18.28 17.72 3.2% Total Revenue* (£m) 10.7 10.0 6.6% Adjusted EBITDA* (£m) 3.2 2.6 23.1% Profit/(Loss) after Tax (£m) 0.1 (1.0)
Slide 10: Strategic progress
Strategic progress • Successful refinancing with HSBC in January 2024 into a single £16m five-year term loan, with addition of a new £2.5m revolving credit facility • Strong focus on expansion remains o Acquired two freehold locations Brighton, UK Cordoba, Spain o First management contract signed Ca
Slide 11: H1 2024 Financial Review
02 H1 2024 Financial Review 11
Slide 12: Income statement
Income statement • Gross profit up by 8.2%, Restated resulting from an increase Unaudited Unaudited 6 months to 6 months to in food, beverage and 30 June 2024 30 June 2023 ancillary sales of £0.6m £000s £000s (54.6% increase) whilst Revenue 10,864 10,022 maintaining Cost of Sales Cost of Sales (1,70
Slide 13: Balance sheet
Restated Unaudited Unaudited 6 months to 6 months to 30 June 2024 30 June 2023 £000s £000s Balance sheet Non-current Assets Property, Plant and Equipment (incl. Right of Use) Other non-current assets 77,659 16,340 74,337 13,926 Total Non-current Assets 93,999 78,263 • Total Borrowings increased by C
Slide 14: Assets
Assets • Portfolio includes 20 properties including freeholds/long leaseholds independently valued at: • Elephant & Castle - £27.2m • Glasgow - £4.9m • York - £2.9m • Edinburgh - £4.3m • Pisa - £6.7m • Cordoba - £1.8m (acquisition price) • Brighton – £2.3m (acquisition price) • Net asset value per s
Slide 15: Cash Flow
Unaudited Unaudited Cash Flow 6 months to 30 June 2024 £000s 6 months to 30 June 2023 £000s Profit for the year 63 (1,003) Operating activities: Depreciation & Amortisation 1,705 1,973 • Cash generated from operations Net Finance Cost 1,574 1,522 was £5.0m, down £0.4m on 2023, Tax (220) (1) primaril
Slide 16: Invested for future growth
Invested for future growth • Banking platform / integrated payments All overseas bank accounts are moving to Santander and their partner banks in 2024. The use of a single banking platform for overseas banks and integrated payments will create efficiencies. • Enhanced forecasting and modelling Addit
Slide 17: Strategic update
03 Strategic update 17
Slide 18: Strategic priorities
Strategic priorities 01 02 03 Operational Strategic Explore excellence expansion of franchising portfolio opportunities 18
Slide 19: 01: Operational excellence
01: Operational excellence • Strong conversion underpinned by driving Total RevPab, ensuring all revenue streams are maximised • Considerable challenge from increased payroll inflation across Europe, overcome by pro-active operational cost management o Utilisation of new brand manual, standardising
Slide 20: 01: Operational excellence
01: Operational excellence • Marketing spend increased by 27% delivering: • 42% of direct bookings • 50k Instagram followers, 9% growth vs 2023 • Increase of Group related accommodation revenue to 23% (H1 2023: 13%) • Central sales & central support function enhance operational delivery • Commercial
Slide 21: 02: Strategic expansion of portfolio
02: Strategic expansion of portfolio • Opening of Safestay Edinburgh in June 2024, our second hostel in Scotland after complete refurbishment • 3 additions during the period, enhance strong presence in Europe o Córdoba, Spain (hotel) – 90 beds, freehold o Calpe, Spain (hostel) – 100 beds, managed o
Slide 22: 03: Exploring management & franchising opportunities
03: Exploring management & franchising opportunities • Asset light model offers opportunity for owners, operators and Safestay • Encouraging interest in Safestay brand • Appointed Business Development Manager (Franchise) in June 2024 • Development of the Safestay Brand Manual, Building Design Standa
Slide 23: Established platform for growth
Established platform for growth • Blueprint for further refurbishments set • Investment in staff engagement and training with roll out of multilingual online training platform • Launch of new STAYconnect intranet with internal information, Operational Manual and Brand Standards • Continue embracing
Slide 24: Outlook
04 Outlook 24
Slide 25: Outlook
Outlook • Strong start to Q3 2024 o July & August revenues up on 2023 equivalent • Positive trend continues, confident that year-end targets will be met • Forward bookings for remaining months comfortably up on last year • Positive outlook for 2025, with strong group pre-bookings • Fragmented market
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