By Christian Moess Laursen
Safestay said Friday that it swung to a pretax loss, but that revenue surged as the market environment is returning to normal.
The hostel operator said it swung to a pretax loss of 723,000 pounds ($908,088) in 2022 from a pretax profit of GBP692,000 in 2021, which was boosted by the sale of its Edinburgh hostel, and as administrative expenses rose 32% to GBP13.8 million.
Revenue jumped to GBP19.1 million from GBP6.4 million, reflecting a return to a near-normal trading environment and helped by the average bed rate rising to GBP23.63 from GBP19.70, the company said.
Earnings before interest, taxes, depreciation and amortization fell to GBP5.5 million from GBP7.2 million due to the aforementioned sale. On an adjusted basis where exceptional and other one-off items are stripped out, Ebitda swung to GBP5.9 million from a loss of GBP1.0 million a year prior.
Although trading is recovering, occupancy was below prepandemic levels, at 63% versus 77%, the company said.
In the current year, results are significantly ahead of budget, showing the resilience of the travel market sectors, Safestay said.
“Looking ahead, if occupancy continues to grow into 2023, which we believe it will, and we are able to maintain our average bed rate levels, then the business is in a strong position,” Chairman Larry Lipman said.
Write to Christian Moess Laursen at christian.moess@wsj.com
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