LONDON (Alliance News) - EasyHotel PLC Wednesday said trading in its recently-ended financial year was in line with the board's expectations, but that while revenue was ahead of the previous year, its earnings are likely to be hit by one-off items.
Shares in easyHotel were trading down 10% at 64.15 pence following the announcement Wednesday morning.
The budget hotel operator said that during the year to September 30, it benefited from contributions from its hotels in Glasgow, the expanded capacity at Old Street in London and the opening of a hotel in Croydon.
Together with the opening of franchised hotels in Frankfurt and Prague, this has resulted in revenue being materially ahead of the prior year, easyHotel said.
However, reported earnings before interest, tax, depreciation and amortisation is likely to be hit by a number of one-off items, the company said, particularly by costs related to management changes and income related to the termination of the South African franchise.
EasyHotel added that its recent acquisitions in Liverpool and Manchester are likely to be opened as hotels in late 2016, while the hotel in Brussels will be opened by early 2017.
The Brussels project, which involves the development of a 107-room hotel, will either be purchased by the group's Benelux franchisee, releasing the group's EUR3.3 million security deposit, or will be developed as a directly-owned and managed hotel for a total investment cost of EUR9.4 million by the end of October.
"In the two months I have been with the group I am pleased with its progress and direction of travel. Whilst the strategy is sound, I am currently having a hard look at how we can accelerate the growth of both the owned and franchised hotels as well as how we can improve the group's core operational disciplines. A further update will be provided with our results in December," Chief Executive Guy Parsons said in a statement.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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