Safestay (LSE:SSTY) — Interim Results

0:01 Good afternoon, and welcome to the SAFESTAY PLC interim results investor presentation. Throughout the recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated in the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives in the meeting itself. However, the company can review all the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll.

0:28 And I'd now like to hand you over to Peter Zilker. Good afternoon to you, sir. Thank you very much, Alessandro, and good afternoon to everybody. And thank you very much for joining us this afternoon, and thank you for your interest in SAFESTAY PLC. Over the next thirty minutes, forty five minutes, including question and answer, so I want to share some more context around our past year results 2024 at SAFESTAY Hostels and Hotels. My name is Peter Silke. I'm the COO at SAFESTAY, and joining me today is Paul Gingston, CFO of our company. Hi. There are four or points we structured the presentation this afternoon. The first, a brief introduction to SAFESTAY and the hospital market.

1:14 Then Paul will talk you through in more detail about the financial details, the strategic update from myself,

1:21 and also a brief outlook for the remainder of the current financial year, followed by a question and answer session at the end of the presentation. Yeah. Starting with the introduction to SAFESTAY HOSTAY PLC and HUDHALES. Okay. So if I just introduce myself to say Paul Hinxton, CFO, joined in February 2022. I have extensive experience at board level in both travel and hospitality and worked in PLC's private companies and private equity funding companies. I'll now hand back to Peter. Yeah. Thank you. Yeah. And my name is Peter Sillouga. I'm the COO and primarily responsible for the execution of the strategy within SAFESTAY to

2:11 to to drive the company forward and and streamline the brand internally. My background is twenty five years experience in branded hospitality industry across various countries in in the world. Also, would like to introduce Larry Lipman, our executive chairman, who founded the company in 2011, and he's mainly responsible for setting the group strategy and the business development of SAFESTAY hostels and hotels. And joined on the board are three nonexecutive directors, Michael Hearst OBE, Paul Cummins, and Sarah Guedes. SAFESTAY Hostels and Hotels is one of the largest hostel groups in in Europe with a growing portfolio of hostels across 12 countries now in in key destination cities. We're currently operating near 4,000 beds in shared dorms, which won't come as a surprise to you in a hostel. But what a lot of people may not know that all our hostels also have private rooms. And what I mean with private rooms is hotel like rooms, en suite rooms with a double bed or two singles, so very much like a hotel accommodation.

3:26 We as said, we're operating at the moment we we we run 20 properties at the moment, 17 are operating, and you see us three properties a little bit shaded. This is Brighton, Budapest, and Kalpa, which we currently refurbish or await some licensing to open them within the next few months. Supporting the the the board is an experienced management team of well experienced hospitality experts with strong brand experience. These are send these are area managers of Southern Europe, Central Europe, and UK, a head of commercial running all our commercial functions, and our head of finance who supports Paul.

4:13 I mean, you SAFESTAY differentiates differentiates itself mainly or one key differentiator is that we are a true pan European hostel operator. Many of our competitors are very single mark single country focused. This might be The UK, Germany, France, or Spain. We are one of the few who operate in in different countries. And as I said, we're operating now in 12 countries at the moment and obviously want to grow that in the near future. The hostel market in itself is currently valued at just under 5,000,000,000 US dollars by the end of twenty twenty three, and it is projected that the hospital market will increase to near 9,000,000,000 by the end of twenty twenty nine.

5:05 It won't come as a major surprise to you that our key customer market on manuals and jet sets or the general backpacker is is a very, very important customer group for us together with groups. But what we see more and more is also that families and business travelers use hospitals as enough affordable alternatives to for accommodation in city centers. It's it's not unusual. We see a very positive trend there that the family of four, let's say, is booking a four bed dorm where the children sleep upstairs, the the parents downstairs, for example, and which is far more affordable than a similar accommodation in in a hotel where they may need two bedrooms or one large room. The the the hostel market in itself is extremely fragmented. There are very few companies which operate more similar model like SAFESTAY, which with a centralized brand, the same with a group character.

6:09 Most hospitals are owner operators, so it's not unusual that you go into a destination where we have 10 hospitals, let's say, and all are individual operators and and and companies. So it's very, very different from what we know from hotel from the hotel market, which is hugely consolidated with IHG and Holiday Inn, Marriott, Hilton, etcetera. So this is something where we feel feel we are very well positioned to capitalize with our structure on on that growth to play a part in consolidating this hugely fragmented hostel market going forward. And and talking about the our position in this in this environment, and I probably refer to the last point on this particular slide first.

7:02 We have a well invested platform for future growth opportunities. We we managed to increase our net asset value by 17% over the last six over the first six months of this financial year to 49.8 p. Hence, so this gives us a strong platform for that. We have a strong improvement track record to expand. We I will come to the acquisitions which we done in the first three six months of this financial year later on. And we have a platform which allows us us from here onwards to in increase our portfolio at pace with brand manuals and other operational expertise which we gather in in SAFESTAY hostels and hotels. Before Paul shares with you some more details about the financial results of the first half twenty twenty four, I wanted to point out three key areas from this slide here. The first one is occupancy. So the volume of our business, the customers we host in our hospitals. We are extremely pleased that we were able to push that forward by nearly 2% to a 71% average occupancy across their state. So this gives us great confidence that our product is is sold after, it's accepted, customers coming back.

8:24 We have a number of group bookings and agents who use us as their preferred choice, so we're extremely pleased for the from the responses we received in that area. The average bet rate, so the the amount of money we charge per bet sold, has dropped by 4%. It's it's still considerably up on the pre pandemic levels, but it's it's goes hand in hand with the the the pressure which households and companies that still feel. Our strategy to drive volume and balance that with with the rate has materialized and and come to fruition. And the proof of that is in the third element, in the third line, which is the total revenue per available bed. So this is in in in our opinion or this is our strategy, the key core key performance indicator, how much revenue do we generate with each with each that we have available in the estate. And as you can see, we were able to push that forward by 3.2% to £18.28.

9:30 This includes not only the very important accommodation revenue, but it includes also the food and beverage revenue and any ancillary revenues.

9:42 A few key points on our strategic strategic progress, which we completed over the last six in the first six months of twenty four. We successfully refinanced with our health bank HSBC in January and now and moved it all into a single 16 mil a million five year term loan and with an addition of a new 2.5 revolving credit facility. We we made two freehold acquisitions, One in Brighton, a superb property just opposite the Royal Pavilion with three, four minutes walk to the beach and to the Brighton Pier. We purchased a hotel in Colderba in the in the center of the historic town of this UNESCO heritage town in in Southern Spain.

10:30 And we signed our first management contract just outside Alicante in the South in Spain in a city called Calpe under Costa Blanca. I come to the management and franchise contracts a little bit later in our presentation. We also appointed business development manager who will focus on the franchise extensions, and we expanded our commercial hub in Warsaw. And the commercial hub in Warsaw was formed in August last year, and it's a one stop shop which serves the whole estate with revenue management, yield management, tasks, marketing, a call center for our group bookings, and others, but also HR and other support functions. So a hugely important office to drive our commercial success. And the success is evident by the increased total revenue per available bed, which I mentioned earlier, and also to stimulate the demand reaching a near 71% occupancy in the first half of twenty twenty four.

11:38 So with that, I hand over to Paul who will run through some numbers from the first half of twenty twenty four. Thanks, Peter. So I'll start off with the income statement. You can see that gross profit has increased by 8.2% resulting from an increase in food, beverage, and ancillary sales of naught 600,000, which is 54% in 6% increase. Just for your information, ancillary sales cover luggage storage, customer laundry, and things like vending machines. It's also good that we've maintained the cost of sales at 1,700,000 through tight cost control, and this has also led to admin expense retention as a percentage of total sales falling by 7.9.

12:33 Another good point is that profit after tax from continuing operations increased a 111% and is now positive. Moving on to the balance sheet. Total borrowings have increased by 3,000,000, but this has been used to leverage debt to fund acquisitions. But as some of the acquisitions have actually been funded out of cash flow, though, so it's a combination of both of these.

13:01 Gearing is now at 57.4%, which is slightly up from 2,000 '23. But if you exclude Elephant And Castle, our flagship site because it's not really bank debt, then gearing is actually at 41.8%, which is more reasonable. Then if you look at our freeholds and long leaseholds are valued at 50,100,000, which is up from 38,700,000 last year, and I'll cover that off in the next slide.

13:32 So our portfolio includes 20 properties, including freeholds and long leaseholds. So if you look at the range of valuations, we've got Elephant Castle at 27,200,000, Blasdow at 4.9, and York at 2,900,000. So Edinburgh, a new acquisition, was is valued at 4,300,000, and the piece of valuation has increased to 6,700,000. Then both Cordoba and Brighton, our two latest acquisitions are based on the acquisition price. So Cordoba is 1,800,000 and Brighton is $2,300,000 And then the effect of this is our net asset value per share has increased by 17.2% to 49.8 p. So again, that's a strong performance.

14:25 Now if you look at cash flow, so cash generated from operations was 5,000,000. Now this is 4 naught 400,000 down on 2023, but it's primarily due to paying tax on overseas profits, which actually means shows that the business is gaining get becoming more profitable. Peter has touched on about the refinancing, excuse me, and the original loans consolidated to take advantage of preferential interest rates. Also, as I said before, the additional debt has been raised to fund acquisitions. And as you can see, a total of 5,700,000 has been invested in the acquisition and renovation of new properties. Aside from the figures, we're also completing a lot of work to provide us a platform for future growth.

15:15 So in terms of our banking platform and payments, all overseas bank accounts are moving to Santander and their partner banks in 2024. So the use of a single banking platform for overseas banks and integrated payments will create efficiencies. Additionally, we've enhanced our forecasting and modeling. So this means we've got better analysis, which will improve our decision making. Additionally, we've got a new procurement platform. So we're working with a third party procurement platform, which will be introduced to maximum efficiency and to take advantage increased purchasing power. I'll now hand you back to Peter. Thank you, Paul. Let me give you some context around the activities we've done over the last six months or the first six months, '24, in a strategic update. I broke this down into three elements. First, an update on the operational excellence delivering the the very pleasing result, which we delivered in the first six months.

16:18 The strategic expansion, but also the franchising opportunities and management we see for the medium and long term I for mentioned the total revenue per available bet earlier in presentation. It was one of and this is one of our key strategies to focus on that key KPI. And the fact that we were able to drive that forward over the last two years from £16.88 to £18.28 for every single bet we have available in the portfolio. Revenue generated for each bet in the in the portfolio is very, very pleasing.

17:03 So revenue generation is is is certainly on on the right track. Of course, like many other businesses, we had considerable challenges in in our cost men in in the costs, which has increased at the end in the last six months, but also at the end of twenty three with the inflation levels, although they have come down. But especially also the headwinds from the increased payroll inflation across Europe was was something which we had to manage very, very carefully. We all know that in The UK, for example, the national minimum wage went up by 11%, not dissimilar in many other countries in Europe, Poland, for example. The the minimum wage went up by 17% in January and another 1% in in July.

17:49 So adding this altogether, which created, obviously, the demands to be pro more proactive in our operational cost management. And the utilization of our developed manual standardization of operating processes and creating synergies as a group, a process, and a strategy which we launched in the middle of twenty twenty three pays now dividend dividends. As you see on the right hand side, the first graph, the the left one, which is the operating departmental profit profitability. And what I mean with that is the revenue minus the operating costs. So it includes costs such as online travel agent, commission, laundry, food and beverage repurchase, payroll, utility, and maintenance costs, but it doesn't include include rent or other fixed overheads.

18:44 And as you can see, the operating departments improved their profitability by 6% from 45 to 51, which is a which is extremely pleasing result considering the cost pressures we faced in the first six months of this year. Break breaking this down into our key revenue streams, accommodation, food and beverage, and and ancillary, you see that each area increased the profitability, again, despite the fact that the costs increased in many areas. Although accommodation performed extremely well at 62% conversion already, we were managed to push that to 63%. Food and beverage performed at 25% conversion.

19:29 The profitability of this operating department improved to 44%, and this was achieved by signing up suppliers, single suppliers in The UK. We're working with one brewery now for all our properties, something we want to roll out. Or we're working in Spain in our properties at the moment, and the same will apply across the portfolio where we streamline our supplier base somewhat. Although the smallest revenue stream, ancillaries, which is luggage storage, guest laundry, or vending machine, is the smallest revenue stream out of the three. But we're extremely pleased. First of all, we were able to increase that by 50%, that revenue stream, but also been able to push that from 70 sorry, 91% conversion to 96. So it's a highly profitable revenue stream.

20:24 And whilst I doubt that we will be able to push that much further than 96% conversion, the focus on generating extra revenue from luggage storage, laundry, guest laundry, etcetera, because it's such a highly profitable element is hugely important and without losing the focus on our key revenue stream accommodation, we will certainly push that element forward as well.

20:53 To deliver this upside in occupancy and total revenue per available bed, we took the decision late twenty three to increase our marketing spend. We launched a new website in '23, which in the middle of twenty three, we saw the dividends in the late part of twenty three and certainly in the first half of this financial year. And one element I want to touch on in particular is the online travel agent commissions. So online travel agents, companies like booking.com, Expedia, Hospital World, etcetera, hugely important partners to us. We're working very well with them, and and it it will continue to be an an important source of our accommodation business.

21:41 But as you can see on in in the graph on the right hand side, in in the market 2023 market report from Muse, which suggests that hotels in '23 receive 8% of direct bookings and the rest through online travel agents. Hostos are a little bit better. They they generate 13% of their booking direct with their own website and with their own call centers, etcetera. So noncommissionable. So when you consider that we pay online travel agents up to 17% of each booking, it's obviously an important target to focus on to reduce the reliance on these online travel agents. And as you can see, SAFESTAY performs extremely well with the strategic perform strategic platforms we created in the commercial hub, whilst we ended in financial year '23 with 27% of our bookings coming through our direct channels, our own website, the commercial hub, call center, and group bookings, etcetera. In the first half of this year, 42% of our bookings coming through direct channels. That's that's that's extremely pleasing and obviously helps the conversion of our revenue into EBITDA significantly.

23:00 The investment of marketing spend is clearly also very much focused on digital marketing. We are undergoing an SEO search engine optimization process at the moment, but also also the social media element is massively important. We are very pleased that we crossed the 30,000 Instagram Instagram followers mark, a 9% growth versus last year. Instagram is definitely the platform where our consumer target market communicates.

23:31 So we are very active on that platform, but also on other platforms as well to drive demand. And this is all concentrated in our central sales and central support hub in in Warsaw to drive these numbers forward.

23:51 Expansion is clearly something which done extremely well and which we will continue to do at pace over the next months and years. We're very pleased that we were able to open our Edinburgh property in June. We purchased this property in October last year and done a complete refurbishment and opened in the beginning of June. It was always a target market. The Taylor Swift concept comes to mind. We wanted to capitalize on that. And indeed, on the third day of opening, our hospital was fully booked. And since then, following the fringe, etcetera, Edinburgh performs extremely well, and we're very pleased with the result of that. And we will copy this this process over to all our three new acquisitions we've made over the first six months of this year. We purchased a hotel in Coldenhagen, which is a 90 bed hotel. We will change this gradually into a hostel. The refurbishment work starts actually next week.

24:52 The last elements of our managed property in Halper in terms of refurbishment are completed as we speak, and we're for the final licenses to open that later this year. And the new purchase of Brighton, which was completed in June this year, which we will convert into a 200 bedroom hostel once the licenses has been received and once the renovation has been completed as well. Since the first half of twenty four, so just recently, we signed a new lease in Budapest in the capital of Hungary, and a fantastic building in the city center, three minutes from the opera and ten, twelve minutes walk from the Danube River River and the Parliament Building.

25:40 We will refurbish that as well. And it's expected that we open Budapest and Brighton together somewhere in spring twenty twenty five ready for the super important summer season, of course. So this brings us at the moment to 20 sites across major European destinations.

26:01 I mentioned franchise and management. We are very pleased that we started this process that we signed our first management contract in in with an owner in Spain and open will open the property very soon as a as a manage. This asset light model offers great opportunity for for SAFESTAY going forward to expand our footprint not only in Europe, but outside Europe as well. But it also creates great opportunity for owners and operators to benefit from our brand, from the strength of our brand, from the strength of our brand manuals, building designs, and operating manuals, which we created over the last twelve months or so. To support that, we appointed a business development manager who focuses directly on franchise opportunities in Europe and further afield.

26:54 He started in June 24 and is now actively involved in contacting current owner operators to to franchise with us. The the the case to franchise with us or to to allow a a to use our expertise to manage the property is is underpinned by our guest makes 73% of our guests arrive from the outside of the hostel destination country. So what I mean is that we have in each hospital in average, wherever you are, 3% international guests. So these new markets are hugely important for owners, developers, new openings, and we received encouraging interest from not only developers who want to build hospitals from scratch, but also building owners and current operators.

27:50 So having an extra stream for adding an extra stream to our above beside the leasehold and the freehold opportunity as we believe that we can expand our footprint rapidly with management and franchise opportunities in the medium and long term. To underpins underpinning this growth opportunity is the blueprint we created. The pictures you see on the bottom excuse me. The pictures you see on the bottom of that slide are pictures from our Edinburgh property, and this is the the blueprint and the template which we created now and will roll out in new properties, but also into refurbishment of existing properties over time. So hugely important to have this brand standard, which which gives us now a platform to accelerate expansion across the field.

28:55 Investment in our staff is very important. It's obviously not always easy to operate in 12 different countries with similar number of languages, etcetera, but we we work with a partner on the multilingual online training tool which serves all languages so that we can train our staff in our standards, in our procedures. So this is not only mandatory trainings, but this is also guest service, revenue, etcetera. Complementing that is the launch of our intranet, our state connect intranet, again, where staff can research our company, learn about our company, explore operation operational manuals and brand standards, and to implement them in the day to day operation across Europe. It is hugely important.

29:49 Excuse me. The last slide gives you just a brief outlook for the rest of this financial year. July and August started extremely well with revenues up on twenty twenty three, and we have no doubt that the positive trend will continue for the remaining months. The remaining months, meaning September, October, November, and December,

30:15 all pacing ahead of last year, meaning we have more bookings on the books than we had last year at the same time. So we're very positive that we will end on a high by the end of this financial year. The same applies for 2025. We see a strong group booking interest, again driven by our commercial hub in Warsaw. So the amount of bookings and the inquiries we have is very, pleasing. Last but not least is I want to kind of refocus on this fragmented market and the opportunity which SAFESTAY hostels and hotels brings to the market as play in playing a part to consolidate this fragmented market. Yes. As as I mentioned before, we know it from the Marriott's, the Hilton's, and all that. And whilst it will take some time till we reach the size of such companies, but the opportunity to sign up and offer franchising and management contracts to the market is enormous and the interest we receive is certainly encouraging.

31:23 This completes the presentation from us and we can go into Q and A session. Perfect. Peter, Paul, thanks very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab, which is situated on the top right hand corner of your screen. But just for the company, take a few moments through the questions that's been submitted today. I'd like to remind you the recording of this presentation along with a copy of the slides on the published q and a can be accessed via your investor dashboard. As you can see, we have received questions throughout today's presentation. If I could ask you to read out those questions and give response when it's appropriate to do so, I'll pick up from you both at the end. Thank you. And thank you all for the for the question. There are quite a few in there. I hope we can go through most, if not all, of them as we go along. Let let me start.

32:14 Can you tell us a bit more about the Budapest Liszold acquisition? Yeah. We're very excited about being the the SAFESTA to be president in Hungary in Budapest, beautiful city. I was lucky enough to be there only a couple of weeks ago to inspect the the building and meet with stakeholders there. It will be a 160 bedroom hostel by the time we open in spring twenty twenty five. We we we applied for these whole sorry, licenses at the moment, so there there is lots of work going on at the moment. We expect in the first half first year of operation, meaning twenty five, to to receive a modest EBITDA contribution of £60,000 sterling from Budapest. That will increase. Budapest is a superb destination, and we are massively excited to be there.

33:08 Are you targeting any countries in particular for future acquisition? We are we are always opportunistic is probably the answer, First of all, if the opportunity for a freehold comes along and the commercial stack up, we're certainly interested to save the price to these holders, of course. We have a very solid operating structure in Spain and in particular and in in The UK in particular because of the number of properties we have there. We believe both countries still offer growth opportunity. But Eastern Europe certainly a growth market, hence our Budapest acquisition. So we I believe we we focus on that as well. But if you remember the first slide with the map, there are some white spots. France would be fantastic to come, but the commercial elements need to step up. It needs to make sense for for the company and for the shareholders, of course, to to acquire an additional portfolio.

34:14 Do you see scope to undertake further management contracts similar to the corporate agreement? How big could this be for the company? Oh, how big this could be for the company? I mean, hope you don't expect me to give a number put a number on that. So and but we are very excited about the asset light strategy which we which we created. Management contracts, in particular franchise contracts, is certainly something we want to focus on. We have a strong expertise in the market. We're one of the best operators in the hostel environment. So to to to to sell that expertise, if you if you will like to say, is is a logical step to increase our footprint. So how big could that be for the company? I think it could be a bit, but it's a medium and long term strategy for us.

35:10 Is there a new geographies you are looking to? Should we expect further expansion within existing location? I think I answered that earlier with with the locations and all that. Ancillary and food and beverage was particularly strong in h one. What was the driver, and is this sustainable in during h two? There are two drivers really on that. That's a very good question. Thank you for that. Of course, the increase of all group bookings is is brings additional revenue, I don't wanna say automatically, but strongly with that. So this is one element. But also the appointment of a group support manager driving food and beverage sales, focusing on food and beverage sales in our properties has increased the turnover of the food and beverage area.

35:57 So and and and going further, the signing up of or the the the working together with suppliers like individual breweries, individual food concepts, which we launched in The UK, which is a fusion menu, which is launched in London, Ellison And Castle, Edinburgh, and and Holland Park, gives us a a great differentiator, and I'm convinced it will continue into h two and beyond. The increase to 42.3 of bookings through direct channels impressive, but further digital marketing and digital are planned to continue growing this percentage and reduce the lie reliance on commission based platforms. 42% I mean, yes, we will refocus to push that for for further, of course. But without being complacent, if we stick at 42%, it would be a record. I never worked in a company, in a hospitality company, which operated on that level. But, look, digital digital marketing is is is our core marketing channel.

37:03 Absolutely. We're working with a company called Cryptease, which handles our meta search, our travel ads, and on Google and and etcetera, our rebooking platforms, and we all know it when you when you Google something, it's quite often annoying. You can finish your booking at work. All these things together with social media marketing will increase and will drive that. So and then but, of course, the direct channels include groups, and this is a very important element for us as well. And, again, the the the establishment establishing the commercial hub and more so plays a hugely important part in that element. So we are we we drive steps forward, but 40 and without being kind of complacent, 42% is a strong, strong performance. If we push that to 45, then I would be extremely pleased.

38:02 How does SAFESTAY is reentering itself from increasingly competitive markets, especially against both traditional hotels and emerging accommodation platforms like Airbnb? Yet look. Hostels, by definition, are slightly different. We focus on affordability, other host accommodation providers as well, granted. But what what hostels particular offer is the social space. It's a social interaction. So whilst you don't have that, certainly not in Airbnb, and and to a limited extent in hotels, the focus and to create social spaces in the hostel is something and and this lifestyle traveler, lifestyle customer is what we see coming through more and more.

38:50 So and and this is where we differentiate ourselves very much from from other accommodation provider. How we differentiate ourselves to other hospital operators is is is a, we we have a strong operating platform, which has a brand standard, but also the location, which if you look at our portfolio compared to competitors, no other competitor is represented in key destinations like we are and in this destination with a with a central location we offer to our customers. This is unique, and this is recognized by our customers who book us again and again and again, especially groups, but also individual guests. Could you talk more about initial learnings of the cover management contract and how you should think about the split going forward between acquiring progress versus franchising contracts? Additionally, what are the key characteristics and financial targets you look for when acquiring new properties?

40:00 Look. I mean, the key learnings for the from the CALPER management contract, I mean, there are many. It it was our first management contract. You know, we had to create a management structure, a support structure, the the the the the the the company registration and and all that. But look, ultimately, we will manage CalPERS like it is one of our own with the with the profitability targets we set ourselves. For the benefit of the owner, we charge the fee. We have a profit share incentive in the management contracts, and this is something which we will continue to do so. So it will be it will be profitable for us. Of course, will be with with relatively little investment and all that. And this this is what the franchise and management model obviously kind of suggest as it like model.

40:56 So it it offers great opportunity going forward. Operating in so many countries and different languages, taxes legal system must be a heavy drain on resources. Should the focus be on fewer countries in more locations with within those countries? Well, you whoever that mentioned, you're absolutely right. It it it, of course, brings its challenges with us. We have superb partners who help us with the tax with the tax taxes and the legal systems in the different countries. We want to grow our portfolio in countries where we operate. Of course, we do. But the offering of this of operating in 12 countries as it is at the moment is a unique selling point for our core customer, the backpacker, if I may say so.

41:51 Because we see it again and again, a customer travels from Warsaw to Prague to Bratislava and hopefully to Budapest going forward or from Berlin to Brussels, etcetera. This has a unique selling point, and we see this again and again. We launched we launched in the summer this year a program in in Spain where that was exclusively to Spain, but we will copy that into Eastern Europe where we sell packages three nights in each hostel. So I think it's advantageous to have more countries despite the headache it brings with operating in different languages and all that. But we have a support management team in in in various locations across Europe, which manage that process extremely well. One one other point to make, Peter, is that we've liked for example, we now use PKF in each of the countries. So we've created consistency and synergy, and it's the same with lawyers. We use one term of lawyers at the whole of Eastern Europe. So by doing that, we create consistency and efficiency, and that's one of the parts of combating that complexity.

43:05 Yes. Thank you. Interested to know how the SSTY hotel is doing and if there are plans of expansion in Greece, like in Spain, similar markets in Italy. Athens is is doing extremely well. We saw the very first picture of the of our presentation, which is the view from our roof terrace of the Athens building, the Acropolis right opposite, I think Greece offers itself for an expansion. And if opportunities arise, we will be certainly interested to talk these developers, owners, operators, etcetera. So Greece certainly offers opportunities more in in in the latter segment, maybe in in the islands, etcetera, etcetera. The same applies to Italy. Italy, we are representing Pisa.

43:56 Of course, we are interested in Rome. Of course, we are interested in Milan and and and other destinations. But as I said, the commercials need to be right. The rent, the purchase price, whatever it is, they need to be right for for our company, and then we will expand. But, no, all all countries you have mentioned in these questions are certainly of interest to us. And perhaps we have time for one more question. What is the average stay in your hostels, and how can you increase the average spend? The the average length of stay across our hostels is two point two nights. So two point two which is which is not unexpected, which is a which is a good which is a good average for for us. We want to have to make that longer and we've been for that we started as I mentioned a second ago, with packages which stay in three nights or more in particular areas.

44:58 Of course, it's beneficial from a cost element to have guests stay longer rather than one night one night one night, and and we're working on that. This is certainly a target for us to increase the average length of stay for that. And to increase the the the average spend, as I mentioned earlier, the the offering of unique food and beverage concepts, like the fusion menu we offer in London, Alison and Castle in The UK, we want to roll that out in other areas as well. We want to keep people in in in our hospitals. But we recognize as well the location we have is is is almost begging for people to explore the city, and we we recognize that as well. We are an accommodation provider first of all, an F and B supply supplier as an ancillary, as an as an extra, of course. But it's a very important extra.

45:55 One little little element perhaps in York, for example, we installed draft beer. It comes down to simple elements like that, and this happened around four, five months ago, and the beverage sales has doubled. So identifying opportunities like that will drive the the the average spend in all the properties. There might be some more question coming up, and we will answer that. And, Alessandro, I hand it back to you because I believe that these we can answer or will answer these questions when we share the presentation. Peter, Paul, thank you very much for answering those questions from investors. Of course, as Peter just mentioned, the company can review all the questions submitted today, they can publish those responses on the investor meet company platform.

46:44 But just before redirecting investors, provide you with their feedback, which is particularly important to you both, Peter, could I just ask you for a few closing comments? Yeah. Look. So, again, thank you very much for your interest in SAFESTAY Hostels and and Woodhouse. We believe the hard work we put in, not only in the first six months of this financial year, but certainly over the last two years, let's say, to create what we believe a superb platform for to accelerate our growth is is solid, and we're looking forward to an exciting finish of this financial year. And we certainly believe that we created the brand which has the ability and will grow outside Europe, but first and foremost within Europe as well.

47:31 So with that in mind, thank you very much for your time today. And I might see you or you hear me at the next presentation when we will announce our full year results 2021. Thank you. Thank you. Thank you once again for updating investors today. Could I please ask investors not to close this session as you now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few moments to complete. I'm sure it'll be greatly valued by the company. On behalf of the management team of SAFESTAY PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.