Safestay Share Price (SSTY)

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.