May 7, 2015
About Safestay plc
Safestay PLC is the owner operator of a branded contemporary “boutique” hostel group. The first Hostel in the Elephant and Castle, London was opened in June 2012.
The Safestay Business operates a new brand of contemporary hostel, designed to appeal to a broad range of guests. Known as a “boutique hostel” within the travel industry, it is aimed at providing safe, stylish accommodation which offers a more attractive alternative to both traditional hostels and budget hotel accommodation.
The Safestay Business was set up in April 2011 as a joint venture between the Moorfield Funds and the Safeland Group. The Safestay Hostel, at Elephant & Castle, which was opened in July 2012, is the first hostel to operate under the Safestay brand and the Directors intend to acquire and develop further properties in due course.
During its first full calendar year of trading, the Hostel operated profitably, in line with management’s expectations, and achieved 72 per cent. occupancy, generating turnover of £1.9 million (which is the equivalent of approximately £4,750 annual revenue per available bed). Operating profit was £494,000, representing a margin of approximately 26 per cent. The Directors believe that revenue growth and margin improvement at the Hostel can be driven by increased occupancy, additional ancillary spending by guests whilst staying at the Hostel and more aggressive pricing with changing demand.
The majority of the Group’s costs are relatively fixed, comprising premises, staff and energy, hence, as occupancy increases, an increasing proportion of revenue is converted into profit. The Group is highly cash generative with 76.5 per cent. of EBITDA converted to cash in the year ended 31 December 2013.
The Board is accountable to the shareholders for good corporate governance of the Group. The principles of corporate governance and a code of best practice are set out in the UK Corporate Governance Code (UKCGC) as applicable to accounting periods beginning before 1 October 2012 issued in June 2010. Although under the rules of the Alternative Investment Market (AIM) the Company is not required to comply in full with the code nor state areas in which it does not comply, the Board has taken steps to comply with the requirements of the code in so far as is reasonably practicable for a Company of this size.
The Company is subject to the City Code on Takeovers and Mergers.
Statement of compliance with the UKCGC and applying the principles of good governance
The Company is committed to high standards of corporate governance throughout the Group. As an AIM company, it is not obliged to report its compliance with the UKCGC. Nonetheless, the Company is committed to meeting these principles as far as it reasonably can and the commentary below reflects the extent to which the Company has complied with the UKCGC during the period under review.
The Board, which is set up to manage the Company and Group, meets formally at least six times per year. The Board comprises three directors – two executive and one non-executive.
At each Board meeting, the Board receives the latest financial and management information available which generally consists of:
1. Management accounts setting out actual performance;
2. Management discussion on current status of the existing Hostels and potential sites under review; and
3. Working capital cash flow position
The Board reserves to itself a range of key decisions to ensure that it retains proper direction and control of the Company whilst delegating authority to individual directors who are responsible for the day to day management of the business.
All directors have access to the advice and services of the Company Secretary and can also seek independent professional advice, if necessary, at the Company’s expense.
All appointments to the Board are discussed at a full Board meeting and each member is given the opportunity to meet the individual concerned prior to an appointment being made.
As permitted by the UKCGC, due to the small size of the Board, it is considered inappropriate to establish a Nominations Committee.
The Remuneration Committee
The Remuneration Committee, which is composed of the non-executive director, meets as required during each financial year. It is responsible for reviewing the performance of the executive directors and setting the scale and structure of their remuneration and the basis of their service agreements with due regard to the interest of shareholders. The Remuneration Committee shall also determine the allocation of share options to employees. It is a rule of the Remuneration Committee that a director shall not participate in discussions or decisions concerning his/her own remuneration.
The Audit Committee
The Audit Committee, which is composed of the non-executive director and the finance director is chaired by Stephen Moss and meets no less than twice a year. It is responsible for making recommendations to the Board on the appointment of auditors and the audit fee, for reviewing the conduct and control of the annual audit and for reviewing the operation of the internal financial controls.
Re-election of Directors
Directors retire by rotation in accordance with the Company’s Articles of Association which prescribe that at every Annual General Meeting one third of the directors for the time being or, if their number is not a multiple of three, then the number nearest to but not exceeding one half, shall retire from office. Non-executive directors are initially appointed for a three year term but their appointment is terminable by either party on three months’ written notice.
The Company maintains a website (www.safestay.co.uk) where the Group’s statutory accounts will be accessible. The website conforms to the requirements of AIM rule 26 and all relevant information can be found there.
Queries raised by shareholders are dealt with either by the Chairman or the Company Secretary.
The Board of Directors has overall responsibility for the Group’s system of internal control and for reviewing its effectiveness. The purpose of the system of internal control is to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable, but not absolute, assurance against material misstatement or loss.
The Directors have established an organisational structure with clear operating procedures, lines of responsibility and delegated authority. In particular, there are clear procedures for capital investment appraisal and approval and financial reporting within a financial planning and accounting framework. The Board has reviewed the need for an internal audit function and concluded that such a function is not currently appropriate given the size of the Group.
Larry Lipman, Chairman, age 57
Larry has been the main driving force behind the Safestay Business since its establishment. He is responsible for the Group’s strategy and business development. He has extensive experience of the property market, gained during the last thirty years or so, throughout which he has been the managing director of Safeland plc, where his primary focus is on trading opportunities and the assessment of potential investments and refurbishment projects. He was also a key executive in each of Safeland’s previous demergers and in each case he continued after the demerger to be closely involved with the growth of those businesses as well as continuing to manage the core businesses of Safeland.
Colin Stone, Finance Director, age 46
Colin is responsible for the financial and systems-related aspects of the Safestay Business. He fulfills a similar role at Safeland plc, where he was appointed finance director in May 2013. Prior to joining Safeland, Colin was the Financial Controller for Quintain Estates and Development plc for six years. Prior to that he was the Financial Controller for Freeport Leisure plc for six years. Both companies were quoted on the London Stock Exchange. Colin qualified as a Certified Accountant in 2002.
Stephen Moss, Non-Executive Director, age 61
Stephen Moss is Chairman of three companies: Grosvenor Securities Limited, a central London commercial property investment and development company; Bibendum Wine Holdings Limited; and Bonasystems Europe Limited, a leading floor care and anti-slip specialist serving the hotel, leisure and transport sector. Until 2008, he was Managing Director of BCP Airport Parking which he had grown to become one of the leading booking agents for travel ancillaries via a mix of internet bookings and distribution agreements with leading travel agents, tour operators and airlines including Tui, Thomas Cook and Ryanair. Stephen founded Springboard in 1990, a charity which promotes careers in hospitality,
leisure and tourism, of which he remains Chairman, and its board and corporate partners include many of the UK’s leading hotel groups. In 1992 he was awarded an MBE for services to the restaurant industry and, in 2002, a CBE for his contribution towards education and training.
Country of Incorporation and Main Country of Operation
Country of Incorporation: England and Wales
Company Registration Number: 08866498 Main Country of Operation: Great Britain
Registered Office: 1a Kingsley Way, London N2 0FW
Current Constitutional Documents
Open the articles of association as a pdf
Details of Any Other Exchanges or Trading Platforms
The Company is not listed on any other exchanges or trading platforms and nor has the Company applied or agreed to have any of its securities listed or traded.
There are no restrictions on the transferability of the AIM securities.
Number of Securities in Issue
19,244,519 ordinary shares of 1p each.
Shares not in public hands are 57.3% of the issued share capital.
Miton Group plc 29.9%
Safeland Holdings (2008) Corporation 12.1%
Ord Minnett Limited 12.0%
River & Mercantile Asset Management LLP 7.8%
Webb Capital Asset Management Limited 4.5%
Slater Investments Limited 3.5%
GHC Capital Markets Ltd 3.4%
20th April 2014 - Annual Report
7th May 2015 - Publication of report & accounts
29th April 2015 - New Loan Agreement
13th April 2015 - Safestay Final Results
14th January 2015 - Senior Management Appointment
5th January 2015 - Share Interest
5th January 2015 - Share Interest
17th December 2014 - Placing to raise £3.3 million
2nd December 2014 - Long term lease signed for new hostel
10th September 2014 - Safestay plc interim announcement
21th May 2014 - Acquisition of York
6th May 2014 - Notification of major interest in shares
2nd May 2014 - First day of dealings
Grant Thornton UK LLP, Grant Thornton House, Melton Street, Euston Square, London, NW1 2EP.
Coutts and Co
Nominated Adviser and Broker
Westhouse Securities Limited
London EC2N 4AY
160 Queen Victoria Street, London EC4V 4QQ
Capita Registrars Ltd
The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU
Admission Document and Circulars
Open the admission document as a pdf
The information provided has been disclosed pursuant to Rule 26 of the AIM Rules for Companies.
Telephone: 020 8815 1600
Fax: 020 8815 1601