Portable accommodation provider Snoozebox (ZZZ:AIM) is getting investors interested again after announcing it has been chosen by Ealing Council to help tackle its social housing shortage.
The shares, which have fallen by 43% over the last 12 months on a lack of newsflow, are up 16.7% this morning to 7.9p.
The London borough has asked Snoozebox, along with social housing group Mears (MER), to provide an ‘interim and immediate social housing solution’.
The companies will place up to 44 modular units on a former garage site on Enfield Road in Acton. Each unit will house between two and six people.
Snoozebox has also been granted planning permission for an 80 bedroom modular accommodation solution in Aberdeen to support Bilfinger Salamis’ skills centre and safety training.
The deals - which haven’t been finalised yet - mark a further move away from the £14 million cap’s traditional focus on sending units to sporting events and festivals.
In November it signed a contractwith Premier Oil (PMO) to provide an 80 bedroom workforce hotel for one year from 1 February 2015.
Snoozebox said in its pre-close trading statementon 11 February that its focus for 2015 will be the deployment of its existing room stock on longer-term, semi-permanent contracts such as these.
It also said it will roll out the first tranche of 150 rooms of its new event stock, primarily in the UK but also in Europe. Snoozebox’s new rooms can be assembled and dismantled much faster than its initial units, which should reduce operating costs.
As an early stage business Snoozebox is still loss-making but its latest deals - together with a 25% increase in revenue per room to £150 in 2014 - make its prospects for the year look encouraging.
Panmure Gordon says 2016 will mark a 'step change in group profitability' and puts a target price of 18.5p.
