Safestay (AIM:SSTY) PLC saw its shares leap 10% higher to 22p in early trade on Tuesday after the hostel operator said its performance is returning to pre-pandemic levels.
Revenues for the 12 months to 31 December 2022 are expected to come in at £19mln, ahead of market expectations and up from £6.4mln the year before, when trading was restricted by COVID-19 lockdowns, the group said.
It forecast underlying profit (adjusted EBITDA) in line with market expectations of £5.9mln, compared with a £1mln loss in 2021, boosted by a rise in the average bed rate to £23.70 from £19.70 and a significant jump in occupancy to 63% from 35%.
In the trading statement, Larry Lipman, chairman of Safestay, commented: "The pandemic enforced fundamental change on our business. It required we re-finance the group and strip back the operational structure to a bare minimum.
“As part of re-starting the business, we have been able to use our accumulated knowledge to build the business back up more efficiently and the group is perhaps the stronger for it. Certainly, our performance in 2022 was pleasing and we are now focused on continuing the growth in 2023."
Safestay said it is in a good financial position following the sale of two properties in 2021. As of 31 December 2022, the company had cash of £4.8mln.