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Safestay PLC on Thursday said challenging trading conditions have persisted, and the company reported that ‘various strategic options’, including an equity fundraise, are in consideration. The London-based hostel operator reported the sale of its freehold property and hostel, Safestay Edinburgh Cowgate, to a private investor for £5.4 million in cash. ‘Under new ownership, the property will continue to operate under the Safestay brand as part of a new 10-year franchise agreement,’ Safestay added. Safestay in June said it was mulling the sale of the freeholds of ‘of certain of its UK assets’. ‘The net proceeds from the transaction will be used to repay indebtedness, for working capital purposes and to strengthen the group’s balance sheet, supporting the delivery of its long-term growth ambitions,’ it added. ‘Under the terms of the new franchise agreement, the property will remain integrated within Safestay’s sales and marketing platform and will continue to benefit from the group’s operational expertise and proprietary IT infrastructure. The new owner will also have access to Safestay’s dedicated support services through Safestay’s Commercial Hub in Warsaw, including digital services, sales and yield management advice. In return, the group will receive a fixed annual payment of £75,000 with additional performance-based fees payable, including commission on direct bookings via the Safestay platform.’ Safestay warned that ‘challenging trading conditions and price pressures have continued’. ‘Against this backdrop, the board continues to focus on maintaining occupancy rates and controlling costs. Additionally, the board is considering various strategic options, including further disposals and/or the sale and leasebacks of certain of the company’s properties and/or an equity fundraising. A further announcement will be made in due course,’ it added. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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