Safestay reduced its pre-tax losses from £860,000 to £600,000 last year, with a 14% increase in pre-tax profit for its UK business taking it to £1.76m.
For the year ended 31 December 2018 the premium hostel group reported a 39% increase in total revenues to £14.6m, and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of £3.4m, up from £3.2m the previous year.
The group’s like-for-like sales increased nominally, up 1% to £10.6m, as the UK was down 1% due to the disruption of the £2.4m, 73-bedroom extension at its Elephant and Castle site in London, which completed at the end of January this year. The group said 4% of its net revenue is now coming from mainland Europe and occupancy across the group grew to 76% (2017: 73%).
Chairman Larry Lipman said: “2018 was a positive year for the business and I am confident that 2019 will deliver continued growth. The portfolio is maturing and shows the benefits of the group gaining from economies of scale, geographic spread and group wide automation. This, together with continuing global demand for the modern hostel experience means we are well placed to sell an increasing number of bed nights in 2019 and add further destination cities to our portfolio.”
Together with the successful £10.36m fundraising completed in December 2018, Lipman said the group is well placed “to continue to make selective acquisitions”.
Safestay operates 12 hostels across six countries in Europe, including sites in Edinburgh, London and York in the UK.