Safestay’s revenue and profit tumbled in the first half of 2021 as the hostel group continued to be dogged by Covid closures.
Revenue was £1m, down from £3.3m for the first half of the previous year and £4.8m for the whole of 2020.
It also made a loss, before exceptional items, of £2.55m. The £16m sale of the group’s 150-year leasehold interest in its Edinburgh hostel in June raised that to a £3.6m pretax profit.
Chair Larry Lipman said: “Trading in this period was extremely limited with our hostels closed for 83% of the six months.”
But he added that Safestay had worked hard to ensure that it was prepared for the reopening of its sites and the return of customers. “Our focus was on maintaining a low-cost base, preparing for when trading restrictions could be lifted and securing our financial position to ensure the business can invest behind the return to a normal trading environment.”
It has now reduced borrowings by 35% to £18m and has £6.3m cash on hand.
Currently, it said, the business is operating at around 50% of pre-Covid-19 occupancy levels in 2019 and room rate is at approximately 75%.
Safestay has launched a strategic review of its options after receiving an early stage offer for the business this month.
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