Safestay PLC on Friday said that it had swung to a loss but revenue was up, noting it was beginning to return to pre-Covid-19 levels.

The London-based city centre hostels operator swung to a pretax loss in 2022 of £724,000 from a profit of £692,000 in 2021.

Revenue trebled to £19.1 million from £6.4 million. Safestay said this reflected a return to near normal trading, with hostel accommodation multiplying to £17.2 million from £4.9 million last year.

‘2022 was our first near normal trading year since the start of the pandemic and it was therefore very pleasing to see that when allowed to trade, our hostels immediately attracted back a high level of guests,’ said Chair Larry Lipman.

Cost of sales tripled to £3.1 million from £1.2 million last year, with the company saying this was due to direct room supplies and sales commissions also trebling to £2.7 million from £951,000 last year.

Safestay’s administrative expenses similarly increased by 33% to £13.8 million from £10.4 million.

Total tax charge for the year was £441,000, swinging from a tax gain of £1.3 million last year, and total staff costs increased 64% to £5.4 million from £3.3 million.

Average bed rate increased by 20% to £23.6 from £19.7 last year. Occupancy increased to 63% from 35.4% last year, but was still low compared to pre-COVID levels of 77% in 2019.

Safestay declared no dividend in 2022, unchanged from 2021.

Looking forward, Safestay said it expects to sustain an average room rate at or above 2022 levels, and that it will benefit from the return of large school and college bookings.

‘If occupancy continues to grow into 2023, which we believe it will, and we are able to maintain our average bed rate levels, then the business is in a strong position,’ said Chair Lipman.

Shares in Safestay were up by 3.8% at 30.10 pence in London on Friday.

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