Source - RNS
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 £18 per night, within the current range of £18-20, and expected to be stable through to year-end

·     Introduction of direct booking channel which is performing ahead of expectations; ranked 2nd 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 £3.29m (H1 2015: £1.40m)

·     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 £0.78m (H1 2014: £0.26m)

·     The portfolio of hostels are a mix of freeholds and a leasehold with the freeholds externally valued at £32.6m. Elephant & Castle revalued at £16.0m on 21 July 2016 adding a further £3.7m 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

 

Safestay plc 

+44 (0) 20 8815 1600

Larry Lipman, Chairman

 

 

 

Canaccord Genuity Limited
(Nominated Adviser and Broker)

+44 (0) 20 7523 8000

Bruce Garrow

 

Chris Connors

Ben Griffiths

 

 

 

Novella

 

Tim Robertson

+44 (0) 20 3151 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 £0.14m which will be incurred in H2.

Financial Review

For the period under review, the Company generated revenues of £3.29m (2015*: £1.40m), the Group recorded an EBITDA of £0.78m (2015*: £0.26m) and a loss before tax of £0.49m (2015*: loss of £0.25m).

 

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 £18.16m (30 June 2015: £9.12m) 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 £32.63m, which was increased by £3.74m 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 £10.4m.

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 to

6 months to

Year to

 

 

30 June

2016

30 June

2015

31 December 2015

 

Note

£000

£000

£000

 

 

 

 

 

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 to

6 months to

Year to

 

30 June

2016

30 June

2015

31 December 2015

 

£000

£000

£000

 

 

 

 

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

2016

30 June

2015

31 December 2015

 

Note

£000

£000

£000

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 to

6 months to

Year to

 

 

30 June

2016

30 June

2015

31 December 2015

 

 

£000

£000

£000

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

Capital

 

 

£'000

Share

premium account

 

£'000

Merger

Reserve

 

 

£'000

Share based payment reserve

£'000

Revaluation

Reserve

 

 

£'000

Retained earnings

 

 

£'000

Total

equity

 

 

£'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

 

 

 

 

 

 

 

 

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

Capital

 

 

£'000

Share

premium account

 

£'000

Merger

Reserve

 

 

£'000

Share based payment reserve

£'000

Revaluation

Reserve

 

 

£'000

Retained earnings

 

 

£'000

Total

equity

 

 

£'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

 

 

 

 

 

 

 

 

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

Capital

 

 

£'000

Share

premium account

 

£'000

Merger

Reserve

 

 

£'000

Share based payment reserve

£'000

Revaluation

Reserve

 

 

£'000

Retained earnings

 

 

£'000

Total

equity

 

 

£'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

 

 

 

 

 

 

 

 

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 to

6 months to

Year to

 

 

30 June

2016

30 June

2015

31 December 2015

 

 

£000

£000

£000

 

 

 

 

 

(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 land and buildings

Leasehold land and buildings

Fixtures, fittings  and equipment

Total

 

£000

£000

£000

£000

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 land and buildings

Leasehold land and buildings

Fixtures, fittings  and equipment

Total

 

£000

£000

£000

£000

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 land and buildings

Leasehold land and buildings

Fixtures, fittings  and equipment

Total

 

£000

£000

£000

£000

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 £45,958,000 (30 June 2015: £27,881,000, 31 December 2015: £42,327,000)

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 £28,892,000 (30 June 2015: £17,281,000, 31 December 2015: £27,764,000).

The Group has pledged freehold property with a carrying value of £32,626,000 (30 June 2015: £14,879,000, 31 December 2015: £28,764,000) to secure banking facilities and loan notes granted to the Group.



 

5.    Intangible Asset

 

Unaudited

Unaudited

Audited

 

 

30 June

2016

30 June

2015

31 December 2015

 

 

£000

£000

£000

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

2016

30 June

2015

31 December 2015

 

 

£000

£000

£000

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

 

 

 

£000

£000

£000

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

 

 

 

£000

£000

£000

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

 

 

 

£000

£000

£000

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:

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

2016

30 June

2015

31 December 2015

 

 

£000

£000

£000

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

2016

30 June

2015

31 December 2015

 

 

£000

£000

£000

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
 
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