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EasyHotel outperforms market as it continues to expand
Superbudger hotel operator easyHotel issued its interim results for the six months ended 31 March on Wednesday, reporting an 11.2% improvement in owned hotels revenue per available room (RevPAR), significantly outperforming the market by 11.7%.
The AIM-traded firm said its franchise hotels were also performing well, with like-for-like revenue increasing by 13.5%, while its adjusted EBITDAR margin rose to 23.6% from 20.7% at the same time last year.
Its total system sales were ahead 33.6% year-on-year in the six months to 31 March to £16.1m, while revenue surged 51.7% to £4.76m.
Adjusted EBITDA was 51% higher at £0.98m, with profit before tax up 52.5% at £0.09m.
The board confirmed an interim dividend per share of 0.07p, down from 0.11p but adding that its cash distribution was maintained on an enlarged share basis.
On the operational front, easyHotel pointed to its network expansion, with new openings expected to increase its room portfolio by 38% by the end of the calendar year.
Three new hotels totalling 269 rooms were opened during the period, with all said to be trading in-line with expectations.
In addition, four new owned hotels totalling 517 rooms and five new franchised hotels totalling 411 rooms were scheduled to open in the current calendar year.
A total of 453 owned rooms and 221 franchised rooms had been added to the development pipeline since 1 October last year, the board said.
It also claimed a "strong" balance sheet, with significant headroom to fund its investment pipeline.
Net cash stood at £58.1m on 31 March, up from £21.2m on 30 September, following easyHotel's recent fund raise.
"easyHotel delivered another strong performance in the first half of our financial year, growing market share in every market in which it operates," said CEO Guy Parsons.
"The group's successful £50m fundraising is already fuelling further expansion and since the placing completed in March 2018 we have been delighted to announce further additions to our development pipeline with new sites acquired in Cambridge and Chester."
Parsons said that, as had been widely reported, industry data pointed to more challenging trading conditions in the overall UK hotel market whilst the European market continued to perform well.
"Our growing portfolio of European hotels are trading strongly.
"Whilst we remain mindful of UK consumer sentiment we believe our super budget offer is appropriately aligned to the needs of discerning and value conscious customers."
Parsons said group trading remained in line with the board's expectations, and it expected the brand to continue to outperform the market.
"easyHotel now has a growing network of stylish hotels, a strengthening brand, a talented team and strong, asset-backed balance sheet with significant headroom to fund further investment.
"We will continue to seize opportunities in our UK, European and international markets, balancing our owned hotel development between UK and European assets to create value for our shareholders and underpin the long-term growth of the easyHotel brand."