Shares in budget hotel chain EasyHotel (EZH:AIM) have plummeted more than 10% in early trade this morning after the company lurched to the red.
While the stock had staged a modest recovery by midday, the share price remains firmly out of favour, down nearly 7% at 81.5p.
The company had actually outperformed in the year to 30 September 2019 on a like-for-like basis, but investors were more focused on the statutory £3.57m pre-tax loss it made following a £3m write down of its Ipswich hotel.
Its shares actually gained in early morning trading, but then fell, rebounded and have now fallen further.
The loss figure, which also includes £1.4m of costs associated with the change of ownership structure last year, compares to a £0.8m profit made the previous year.
EasyHotel was thrust into a takeover battle last year after Sir Stelios Haji-Iaonnu, who founded easyJet and has a 28% stake in easyHotel, blocked a bid from Luxembourg group ICAMAP last year.
So ICAMAP now owns 69% of the company’s issued share capital after Sir Stelios eventually manages to block a full takeover under London Stock Exchange rules.
ADJUSTED NUMBERS UP
Adjusted EBITDA actually grew 42.1% to £4.2m, with revenue up to £17m from £11m the previous year.
Like-for-like revenue per available room (RevPAR) - a key metric in the hotel sector - was up 4.2% for hotels the company owns, the fourth consecutive year it has delivered better RevPAR growth than the wider market.
However, like-for-like RevPAR from franchised hotels was down 1.7%.
‘CONFIDENT WE WILL KEEP OUTPERFORMING’
Going forward, interim chief executive Scott Christie said the ‘uncertain political and economic landscape will continue to impact consumer sentiment’.
But he added, ‘we remain confident that the easyHotel brand will continue to outperform the sector as consumers seek out the best value for money.’
Christie also said easyHotel has an ‘ambitious strategy of targeted growth’, which is supported by its main shareholders.
READ MORE ABOUT EASYHOTEL HERE
The firm opened six hotels over the year across Europe, totalling 607 rooms, and has a further pipeline of 2,006 rooms, including an owned hotel pipeline in which it is investing around £40m.
Gross debt rose to £17.5m compared to £16.5m the previous year, while its cash balance fell from £41.1m last year to £11.7m as it invests to grow its estate.
