EasyHotel shares jump despite ‘challenging’ UK market
The hotels group posted a 56% rise in revenue to £17.6m in the year to September 30.
Shares in easyHotel have jumped after the business delivered a surge in annual revenues despite a “challenging” second half.
The group, which has been embroiled in a recent takeover battle, posted a 56% rise in revenue to £17.6 million in the year to September 30.
Chief executive Guy Parsons said the company outperformed its rivals despite a “challenging” hotels market in the UK due to “dampened consumer confidence” amid political and economic uncertainty.
Despite hailing its performance, Mr Parsons said easyHotel has “not been immune to the weaker regional hotel market”, while trading across its franchised business has been “subdued”.
Hotels in regional UK markets delivered a 2.8% decline in revenue per available room for the year, while some regions experienced double-digit decline, easyHotel said.
Meanwhile, the London market performed “strongly”, with 4.5% growth in revenue per room.
The company saw its total like-for-like revenue per room across its owned hotels portfolio jump by 7.7% for the year.
EasyHotel said it boosted revenues through investment in price and the increased use of online travel agents to drive sales.
It said it has maintained a “tight control on central costs” and expects to deliver earnings before tax and interest of £4.6 million.
This comes after Luxembourg investment group ICAMAP recently bought a majority stake in the business despite opposition from founder Sir Stelios Haji-Ioannou.
Despite securing more than 52% of shares, the property fund manager has been unable to take the business private due to staunch opposition from the easyJet founder.
The group said it plans to review its dividend policy and will weigh up whether to pay out a dividend or invest funds back into the business amid the challenging environment.
Mr Parsons said: “Whilst we don’t foresee any improvement to the trading environment in the medium term, we are focused on our strategic priorities and believe the current economic uncertainties will present attractive investment opportunities to continue to expand our development pipeline in our target destinations, underpinning the long-term growth of the brand.”
Shares in the company rose by 11.1% to 110p in early trading.