Safestay PLC on Monday said its annual trading was ‘comfortably’ in line with market expectations.

The London-based city centre hostels operator expects sales for 2023 to be £22.5 million, up 18% from £19.1 million a year ago.

Analyst consensus forecasts sales of £21.2 million and earnings before interest, tax, depreciation and amortisation of £6.7 million. This would be a 14% increase from Safestay’s Ebitda of £5.9 million in 2022.

Occupancy rose to 71%, Safestay said, from 63% in 2022, while its average bed rate for the year was maintained at £23.74, compared to £23.63 the previous year.

The hostel operator also said that forward bookings at January 1 grew twofold to £3.9 million from £1.9 million at the beginning of 2023.

Chair Larry Lipman commented: ‘This performance demonstrates that demand for our product has come back stronger than before the pandemic, and represents an opportunity for Safestay to grow in this exciting market. Our objective is to further build the business, and we are very focused on doing so through a careful mix of organic and acquisition led growth.’

On Monday, Safestay also announced that it has refinanced its existing borrowings into a single £16 million term loan and added a new £2.5 million revolving credit facility to ‘support future growth plans.’

Lipman added: ‘We are pleased to have completed this refinancing, which increases the group’s overall funding capacity, providing additional flexibility and enabling additional investment into the development and growth of our business. We are grateful to HSBC who continues to be a long-term and strong supporter of Safestay.’

Shares in Safestay were up 0.1% at 23.02 pence each in London on Monday afternoon.

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