Safestay (LON: SSTY), the AIM-listed operator of hostels across the UK and Europe, saw its shares fall 32% today to 8.5p from yesterday’s close of 12.5p, as it reported a sharp deterioration in first-half trading.
Revenue from continuing operations fell 10.6% to £8.4m in the six months to 30 June, down from £9.4m a year earlier, while Adjusted EBITDA, earnings before interest, tax, depreciation and amortisation, dropped 71.4% to £0.6m from £2.1m. The group swung to a loss after tax of £1.9m, against a profit of £471,000 in the same period last year.
The decline centres on occupancy. Average occupancy across Safestay’s hostels dropped to 60.8% from 68.2%, and total bed nights sold fell to 349,060 from 415,606, even though the average bed rate rose 8.3% to £22.10. The rate rise was not enough to offset the volume decline, which is why revenue per available bed fell to £15.70 from £16.40 and margins collapsed alongside it.
Management has responded by trimming the portfolio. Safestay sold its Glasgow property for £5.1m in June and closed its loss-making Berlin hostel, moves that lifted available cash 70% to £4.6m at the end of June from £2.7m at the last year-end. Post-period, on 1 July, £3.0m of the Glasgow proceeds went toward a capital repayment that cut gross bank debt to £10.7m.
Larry Lipman, Safestay’s chairman, said the disposals were part of a deliberate reshaping of the group’s European portfolio.
Throughout the first half of 2026, the Board took a number of proactive measures to alter the composition of Safestay’s pan-European portfolio, including disposing of our property in Glasgow, closing our Berlin property and, post-period end, announcing the disposal of our property in Holland Park, London. These actions, together with our focus on cost control and pricing optimisation, have improved the Group’s liquidity and, following the post-period end repayment, reduced our debt. They are aligned with the Board’s focus on creating value for shareholders.
Larry Lipman, Chairman, Safestay plc
The balance-sheet progress sits alongside a separate setback. On the 10th of July, Safestay confirmed it was in talks with Infill Capital Partners over a possible £40.9m takeover, but the approach collapsed four days later when Infill Capital Partners confirmed it would not make an offer.
Forward demand also points the wrong way. As at the 22nd of September, like-for-like forward bookings stood at £3.7m, down 21% from £4.7m a year earlier, which Safestay linked to a weaker consumer environment and tourist levies charged in some of its markets. That soft booking trend leaves the group’s improved liquidity offset by a genuine downturn in trading.