8 Oct 2018 07:00
8 October 2018
easyHotel plc
easyHotel plc
("easyHotel", the "Group" or the "Company")
Year End Trading Update
Transformational year delivering 42% increase in the Group's room portfolio and accelerated pipeline growth
The Board of easyHotel plc, the owner, developer and operator of "super budget" hotels, today issues the following trading update for the financial year ended 30 September 2018 (the "period").
Trading Overview
The progress achieved in the first six months of the financial year, underpinned by our successful fund raising in March, has continued through to the second half with trading for the full year in line with the Board's expectations:
· | Total system sales1 up 25% to £37.2m (30 September 2017: £29.7m). |
· | Owned hotels Revpar2 up 11% with the Group's owned hotels continuing to deliver market outperformance for the third consecutive year. |
· | Like-for-like revenue for franchised hotels increased by 12%. |
This strong performance across the portfolio reflects the growing momentum in the business. We continue to benefit from our recent strategic initiatives which are enabling us to accelerate our growth plans.
The new revenue management system launched last year has been very effective. This, combined with the excellent performance of our newly opened hotels and the impact of our busy opening programme (through which we launched a total of nine owned and franchised hotels during the period), has delivered strong sales growth.
New Hotel Openings
During the period we opened five new owned hotels (610 rooms) in Liverpool, Newcastle, Leeds, Sheffield and Barcelona, our first owned hotel in Europe. These hotels have performed particularly well, mirroring the strong performance of our Birmingham and Manchester hotels opened last year.
The Group continued to expand its franchise portfolio opening four new hotels (297 rooms) in Belfast, Reading, Scheveningen Beach and Maastricht.
These combined openings significantly increased the Group's portfolio room count by 42%, bringing the total network to 33 hotels and 3,068 rooms across 27 cities.
Owned Hotel Refurbishment
The Group has also refurbished its Croydon and Glasgow hotels to bring them in line with the new brand format. This investment has been immediately earnings enhancing.
As previously announced, the Group will also be undertaking a full refurbishment of its property at 80 Old Street. The Board has taken the decision to shut the entire building from December 2018 instead of a rolling refurbishment programme and expects to re-open the building as a 89-bedroom hotel and 15,500 sq ft of office accommodation in the second half of 2019. The total cost for the development is expected to be approximately £7m and the Board is confident that this investment will maximise the value from the property for the long-term benefit of shareholders.
Owned Hotel Development Pipeline
The Group has added a further 686 rooms to its development pipeline over the course of the period with plans for new hotels in Milton Keynes, Cardiff, Chester, Cambridge, Dublin and Blackpool.
As at 30 September 2018 the Group's total owned hotel development pipeline comprised 955 rooms.
Franchised Hotel Development Pipeline
In addition to the four recently opened franchised hotels mentioned above, the Group has also signed new franchise agreements to develop a further seven hotels in Switzerland (Zurich, 4 hotels, and Basel), Spain (Malaga) and the Netherlands, where the Group is pleased to announce the development of a new 154-bedroom franchised hotel at Amsterdam Schiphol Airport, the main international airport in the Netherlands. This is the group's 9th hotel in the Benelux region (its second biggest market after the UK) and the hotel is anticipated to open in 2019.
As at 30 September 2018 the Group's total franchised hotel development pipeline comprised 1,975 rooms.
European Development opportunity
2018 has seen the Group open its first owned hotel in Continental Europe in Barcelona Spain, building on the strong performance already established by its franchise network across Europe. The Board believes that Europe holds a number of attractive opportunities for the brand and intends to balance its development pipeline more evenly between UK and Continental Europe and it will accelerate its presence in these markets.
The Group will initially focus on Spain, France and Germany, where the Board believes there is potential for the brand to target 10 to 15 cities in each of these three countries. A dedicated team has been appointed to lead the expansion under Group Development Director Marc Vieilledent and the Group believes that the additional Continental European hotels which this team is targeting to deliver should be significantly earnings enhancing from 2021.
Commenting, Guy Parsons, Chief Executive Officer of easyHotel plc said:
"Whilst we are mindful of the current economic uncertainty facing the UK, our simple, stylish and highly affordable customer proposition resonates well with today's cost-conscious traveller and has underpinned strong RevPar growth over the period.
"The team has worked hard to deliver on an ambitious opening programme across the UK and Europe, which has seen the number of owned hotels in our portfolio double over the course of the financial year and our network of rooms across the UK and Europe increase by 42%, including the opening of easyHotel Barcelona, our first owned hotel in Continental Europe.
"The successful placing completed in March 2018 has enabled us to accelerate our growth plans. We are focussed on expanding our developments as well as balancing our strong UK pipeline with a growing number of exciting European opportunities, creating value for our shareholders and underpinning the long-term growth of the brand."
The Group expects to announce its Final Results for the year ended 30 September 2018 on 6 December 2018.
Enquiries:
easyHotel plc |
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Guy Parsons, Chief Executive Officer | www.easyhotel.com |
Marc Vieilledent, Chief Financial Officer | http://ir.easyhotel.com |
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Investec (Nominated Adviser and Broker) | +44 (0) 20 7597 5970 |
David Anderson
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Houston PR (Financial PR) | +44 (0) 20 3701 7660 |
Kate Hoare / Hamish Thompson
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Notes to Editors:
www.easyhotel.com http://ir.easyhotel.com
easyHotel is the owner, developer, operator and franchisor of branded hotels. Its strategy is to target the super budget segment of the hotel industry by marketing "clean, comfortable and safe" hotel rooms to its customers.
Operating hotels
easyHotel's ten owned hotels currently comprise 1,130 rooms, and it has a further 23 franchised hotels with 1,938 rooms.
Owned hotels:
United Kingdom: Old Street (London), Glasgow, Croydon, Birmingham, Manchester, Liverpool, Newcastle*, Leeds, Sheffield.
Spain: Barcelona
Franchise locations:
United Kingdom: Edinburgh, London Heathrow, Central London, Luton, Reading and Belfast.
Europe: Belgium (Brussels), Bulgaria (Sofia), Germany (Berlin, Frankfurt), Hungary (Budapest), The Netherlands (Amsterdam: City, Arena & Zaandam, Rotterdam, The Hague, The Hague Scheveningen Beach, Maastricht), Switzerland (Basel, Zurich).
International: UAE (Dubai).
Hotel development pipeline
The Company's committed development pipeline of owned and franchised hotels currently consists of:
Owned hotels:
United Kingdom: Ipswich, Milton Keynes, Chester, Cardiff. Subject to planning consent: Oxford*, Cambridge*, Blackpool.
Europe: Ireland (Dublin).
Franchise hotels:
Europe: Germany (Bernkastel-Kues), Portugal (Lisbon), Spain (Malaga), Switzerland (Zurich, Basel), Netherlands (Amsterdam Schiphol Airport).
International: Iran, Sri Lanka, Turkey (Istanbul), UAE (Dubai).
*Hotels under an operating lease.
1 Total system sales is the full amount that the customer pays for owned and franchised hotels, including initial sign-on fees paid by franchisees to the Company
2 The Croydon and Glasgow hotels were refurbished during the period and the Old Street hotel operated with 92 rooms vs 162 rooms for the same period last year. On this basis, the Group is unable to report on a like for like Revpar basis and reports on an average growth in Revpar basis for the hotels in its owned hotel estate, opened prior to 2017.