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Mastert595 I suspect you are wrong. SSTY has mostly leases. The real value in the business is in 3 Freeholds as the Leaseholds are cannibalised by rent and debt. Margins in hospitality are at a premium with interest rates and landlord's expectations. The properties compete poorly when you look at guest scores in booking.com. Any big player might come in and keep freeholds and get rid of the rest. But for that you get left with 1 in London and 1 in York 1 in Pisa. Any brand will just not bother. Scaling up was the power play here but the business have been unable to grow significantly. 10 years on Elephant and castle (1st acquisition) is the only value asset. Will go nowhere fast with current leadership. Stephen Moss' resignation from board tells you that much.
Mastert595 - good post and you sum up my thoughts. I think this will eventually be a takeover target with a larger chain wanting to gain exposure to this younger market. Long term holder and will continue to hold.
First time posting on this board, however wanted to add my personal thoughts to this thread.
Having been invested for the last two years in this stock I can safely say that the going is slow but steady.
The company is slowly returning to profitability after the pandemic, which allowed the company to cut excess and unnecessary expenditure, in addition to optimising free cash flow generation (£2.035mil as of the 2023 half year report). Moreover, I have stayed in a number of Safestay's hostels as part of my research and travels. Through doing this I can say that they are up there when it comes to the quality and consistency of the product offering. Moreover, every time I stayed in a Safestay Hostel, it was packed and almost entirely full.
I am of the strong belief that Safestay is lining itself up to create its own niche within the hostel space, with its competitors being hit and miss, through building out its own niche it is developing a moat that its competitors will have to attempt to replicate. This moat will become a strong profitability factor for the company and is already beginning to trickle through to the company's gross margin and free cashflow margin.
Through maintaining this growth I believe that Safestay will receive another takeover bid, as the value proposition of the company grows. The most likely candidate for an acquisition, in my opinion, would be one of the larger multinational hotel companies that would be looking to buy a recognised brand with a strong moat to access a younger demographic.
These are just my thoughts regarding the company and what I believe will playout over the next 5-10 years.
Wondering what to say about a 3% rise (when I was dreaming of 30%) . . . better than a kick in the teeth. And I need to dream smaller.
Good luck to Safestay and shareholders, I hope the improvements in business continue for you all.
I've received an email from Paul Hingston, Safestay Group CFO: the company's 2022 results will be announced tomorrow, Friday 9th June 2023.
What a ghost town this board has been for the past few months!
I received this from Safestay in March when I enquried about the date of 2022 results:
"Thank you for your website enquiry.
I apologise for the delay in replying, but holidays have prevented me confirming this information before.
We are aiming to publish our results in the week commencing 5 June.
If you have any other questions, please let me know.
Kind regards,
Paul Hingston
Group Chief Financial Officer
Safestay Plc"
This ghost town is about to come to life.
I spoke too soon, interest has arrived . . . 3.8% up.
Go Safestay.
A rise yesterday of around 25%, and this morning no interest at all? Seems very strange. There are so many long shots on Aim, this company's finances seem robust in comparison . . .
Oh well, I've put a small amount on, time will tell.
NAV of c 44p these have further to go now - they were a takeover target and had an offer which they walked away from.
Surely now, as you say T&C, the sector is perfect for the economy we are in, they either get a better offer or dig in for the long haul and build up from where they left off in 2019
Long term holder and i guess i was hoping the recovery would arrive sooner although IMHO it was inevitable. This is the sort of business that should thrive when budgwts are squeezed (without a pandemic!) so expect more to come as we are heading towards the premium month for occupancy.
Spread of over 20% is ridiculous
only managed to squeeze through multiple small trades.... wonder why ?
Glad thats behind us
2 March 2022
Safestay plc
("Safestay" or the "Company")
Conclusion of Strategic Review and Formal Sale Process
On 17 September 2021, the Board of Safestay plc (the "Board") announced that it had been considering options for the Company with its advisers. The Board determined to undertake a review of the Company's strategic options (the "Strategic Review"). These options included, but were not limited to, a sale of the Company under the framework of a "Formal Sale Process" in accordance with the City Code on Takeovers and Mergers (the "Takeover Code").
During the course of the Strategic Review, a number of constructive discussions were held with interested parties and several indicative proposals were received. Further discussions resulted in a non-binding conditional expression of interest being received from a bona fide third party (the "Expression of Interest") in cash at a significant premium to the current share price (the "Expression of Interest Price").
Having considered the Expression of Interest, the majority of the Board concluded that they would have recommended Shareholders accept an offer made at the Expression of Interest Price. However, following discussions with certain shareholders of the Company, whilst a number indicated that they would be prepared to commit to accepting such an offer at the Expression of Interest Price, it became clear that there was not sufficient shareholder support to satisfy the third party making an announcement of a firm intention to make an offer for the Company under Rule 2.7 of the Takeover Code (and the Board has notified the third party that their Expression of Interest has been rejected). All discussions with interested parties have now ceased and there are no ongoing discussions. As a result, the Board has decided to terminate the Formal Sale Process with immediate effect.
The Board has also decided to end the Strategic Review. The Board believes strongly in the appeal of the Safestay brand and will continue to explore all avenues of alternatives and opportunities in what remains a challenging and unclear post covid environment. In total, trading has been in line with the Board's expectations since the Company's last guidance issued on 28 September 2021.
Safestay's hostels only fully re-opened in July 2021, but the Board's belief in the brand strength is reinforced by the trading performance of the hostels post re-opening, delivering significantly more hostel revenues than 2020, and hostel EBITDA returning to a positive position in the latter months of the year before trade was impacted once again by travel restrictions and lockdowns because of the Omicron variant.
The Board believes that as travel restrictions are lifted across Euro
With Europe reopening this business should be slowly getting back on track.
I hear positive reviews on these modern hostels.
What’s happening with the weak buyout offer? Pretty speculative IMO.
Alliance News) - Safestay PLC on Friday said it will review its strategic options including a possible sale of the company, after receiving an early approach over a possible takeover.
Shares surged 21% to 24.15 pence in London at the open on Friday, giving the company a market capitalisation of GBP15.8 million.
The London-based company, which operates city centre hostels across Europe, said the strategic review would aim to maximise value for shareholders and better position itself for growth. The review will consider a sale among other options.
Safestay has received "a very early stage and highly conditional approach from a party in relation to a possible offer."
Safestay was hit hard by the pandemic, with revenue slumping 74% in 2020 and its pretax loss widening to GBP10.1 million. Since then, the firm sold its Edinburgh branch to A&O Hotels & Hostels GmbH for GBP16 million, and a leasehold site in Barcelona for EUR900,000. In addition, Safestay cut costs, renegotiated rental terms, and took part in government support schemes.
Chair Larry Lipman said: "Individual and group bookings are coming in for the winter and for 2022 and underpin our confidence of returning to pre-Covid levels of trading. We believe strongly in the appeal of the Safestay brand.
"However, we recognise that this is a natural point, as we relaunch the business post-Covid, to undertake a strategic review, in order to maximise value for all shareholders. This process will reveal whether there is additional value for shareholders compared to the upside we believe we can deliver."
Safestay has appointed PricewaterhouseCoopers as financial adviser for the strategic review and formal sale process.
Apologies.. I thought my post below was posted yesterday.. it would appear that it wasn’t.
My personal prediction from the data is that Italy , Germany , Poland , Canada , Lithuania , Slovakia , Latvia , Switzerland, Hong Kong and Austria could be added to the green list later today. Obviously Safestay has presence in some but not all of the above so it would be beneficial to Safestay and (UK) customers. Not withstanding each countries own entry policies of course. Mainland Spain will I believe remain Amber despite localised curfews. Let’s see what happens today when it’s formally announced.
This morning I made a purchase of 20,000 shares and yet again it is shown as a sale. Given that this is the 3rd time this has happened in as many weeks I emailed London South East to ask why this keeps happening. I received a very polite reply which I am pasting below. The bottom line is that what appears as a sale might not always be one! I think it’s important to point this out as a sea of red might cause people to sell as a consequence or possibly put off potential new investors. In my opinion it’s not a healthy impression for the share price as in at least 3 cases it’s factually incorrect. I appreciate they are providing a useful free service, however it’s worth being mindful of this anomaly. I hope this is helpful.
“We calculate the trade type based on the trade price being higher or lower than the mid price at the time of the transaction. Sometimes this calculation does not work, or the price is the opposite side of the mid price. This means we are either unable to calculate what type of trade this is at all, or the calculation shows it as the wrong type of trade. (a buy instead of a sell for example).”
If this isn’t the most promising news thus far , I don’t know what is! Merkel is the powerhouse in Europe.
“German Chancellor Angela Merkel has also said fully-vaccinated Brits should be able to go on holiday in Europe without quarantine in the "foreseeable future", and travel restrictions are being reviewed.”
Yet again my additional buy (10,970) today shows as a sell? .. Pleased to read that the grant of options to the directors have been satisfied and at 18p per share in liu of a 40% reduction in salaries it more than underpins the attractive current share price in my opinion. In addition to the completion of Edinburgh the company is in a good position going forward. Looking forward to seeing the doors of Safestay hostels opening across Europe. Whilst some of the countries are imposing quarantine restrictions on us brits I’m confident that the European countries without restrictions will be able to fill the bed spaces. Positive cash flow will of course follow. Just my personal thoughts and the reasons why I keep increasing my position. Wishing my fellow investors the very best.
mdle4 = Cheers for posting this link.
I'm invested in both SSTY & LIFE :)
That’s strange. The trade this afternoon for 19512 shares shows as a sale when in fact it was a buy. Only reason I can say that with certainty is I was the buyer! Buying in anticipation of positive news from our government tomorrow that there will be some beneficial effects on foreign travel. Whether that’s regrading the traffic light system or the 2 jabs and go/return or a few more European destinations going green where SSTY has presence I’m obviously unsure. The share price has taken a bit of a pounding over the past few weeks and I personally feel it’s a good opportunity to add to my holding. I guess time will tell. Either way I’m in this one for the long play as I feel it’s undervalued as I’ve previously stated. Let’s hope we get some positive travel news tomorrow for everyone’s sake (not just shareholders). Have a good evening one and all.
You’re welcome Hops.. that’s a tidy holding. I’m confident that your strategy will reap you very healthy rewards. Wishing you the best with your investment and it’s a pleasure to interact with you. Stay safe and well. Regards..Mr Hold.
MRhold, THANK YOU FOR YOUR CONSIDERED REPLY. (GOOD TO SEE ONE) I entirely agree. I have 60,000 at an average cost
of 22.83p and expect to hold them for at least a year or two. Best wishes, HOPS