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It seems a very sensible acqusition and in a prime location, I'm happy with it. More cost effective than making € acquisitions with the current exchange rate. Seems a lot of tourists do both Glasgow & Edinburgh on the same trip, so it seems a logical move from a marketing perspective. No mention of cost in transforming it or the timescales though, which has been mentioned before with new properties.
yes good purchase and company is doing what is said it would, expanding across Europe.
No mention when Glasgow site will be operational, hopefully conversion from hotel to hostel will be done in stages so say 100 of the 200 bed capacity will be available in say 3 months, rather than 6.
Would be good to get a financial/trading update too before end of Sept as this share seems very unloved and almost ignored.
Plenty of cash to buy a few more, then they are profitable and can fund future properties from cash flow.
What I don't get is why they buy these freehold properties all-cash - with these low rates they should at least mortgage some of the purchase price even if just 20-30%. Could comfortably lock in 2.5% interest rate for 10 years at a 30% LTV.
Good news about progress here -building looks lovely. Though does anyone know how much cash that leaves them with in the bank?
Hi, good question.
Pretty sure they won't go for anymore funding.
I think expansion will be a combination of
1) using recent £10m fundraise
2) uses profits generated - could be £5m EBITA this year
3) using leasehold rather than purchase as an option (as they did in Vienna last year) - so have a mix of owned and leased properties
4) potentially and I think this is a last resort taking on a commercial mortgage
All IMHO of course
Do like strategy and fundamentals for a LTH. My concern is if they have £10m in bank from last raise, hostels like Pisa costing €3m+....revenue generation won't cover 6+ new hostels without more funding needed? Any correction on thought process welcome as am looking for entry
I've been looking at SSTY for weeks.
Scaled in today with small initial 10k volume ~ 32.55p
Will consider adding more based on news. GLA
agreed - I'm in. Been looking at this a while and finally taken the plunge.
A growing sector and competition like Hostelworld is more expensive and not great.
Net assets 28mil rsi in oversold territory. News and this will pop. Could get news of themy buying more than 1 property maybe a group
Seems to be strong support around the 35-37 area bollingers tight, rsi overesold near enough , news could be round the corner!! Maybe a tr1 due as miton have sold a fair few but they getting bought up. Trading below current net assets. Will average down tomorrow. Now I will wait for someone to respond saying am full of ****!!! Good luck haters
Must be less than 3% left now to dump expect this to go north once there out. Solid business exceeding average daily vol
Growing quickly but currently valued below net assets, cash generative with cash, profitable this year & v experienced board with skin in game target 70s
I pass this Hostel on my way to work. The regeneration the Elelephant&Castle area, I would say, is about 2/3 of the way through. The final bit of the jigsaw being the demolition and building of the new shopping centre which will probably take another 2/3 years(sigh...not good for my commute ) but once finished surely another incentive, along with its Location, for customers.
"The developer’s plan includes over 170,000 sq ft of new shops and restaurants, a 1,000 seat multi-screen cinema and a 500-audience capacity grass-roots cultural venue."
Added capacity at existing site, newly renovated pub next door. Could be a cash cow in the making.
I was going to say that the only black spot would have been the Kwik Fit garage close by, just had a quick check and that also will be demolished and replaced with a shiny new building.
Almost convinced myself to buy some more but i'll hold of as SP(if true to form) tends to drift down on no news. Hopefully one day it'll reverse that trend.
ATB
Another 10k buy just gone through not showing on her yet
Bit of a top up today
Not the most exciting share SSTY but if you want to make money you will do at 38p imo.
buys going through just below mid price so showing as sells
Certainly room for some continued growth here imo
Current market cap £29.7M fantastic value.
NAV of 53p per share and recent acquisitions in Vienna and Brussels reported to be immediately earnings enhancing.
Brokers reiterate target of 70p.
Several large trades went through at 40p during the last couple of weeks.
My two pennies worth... I go passed the Elephant & Castle Hostel on my way to work. Gentrification will have it's effect...
From today's RNS: it is noteworthy that the £12.6 million being realised equates to a net asset increase of 37p per share. Commenting on the refinancing and the sale and leaseback transactions, Larry Lipman, Group Chairman, said: "Consolidating our borrowings into one new facility at a lower cost with an international lender capable of supporting our European ambitions is a logical and very positive step and has been made possible by the increasing trading strength of the business. The underlying uplift in value for the Edinburgh and Elephant & Castle sites is excellent for the business and the transactions this has enabled reflect well on the strength of our business, our brand and the quality of our properties and means we can re-cycle capital into new growth opportunities where we can continue to achieve higher and therefore more attractive returns."
has increased its stake from 14.7% to 16.7%. NAV 58p. Further property valuations possible with planning permission granted.