Shares in easyHotel fell 7 per cent on Wednesday after the “super budget” accommodation chain — set up by easyJet founder Sir Stelios Haji-Ioannou — said openings in Manchester and Liverpool would not take place until late 2016 and this year’s earnings had been hit by one-off costs.
In a trading update, the company — which has three fully-owned and 18 franchised hotels — said its adjusted full-year earnings before interest, tax, depreciation and amortisation would be approximately £1.4m-£1.5m, in line with expectations.
But it said its reported ebitda was likely to be hit by a number of one-off items, in particular costs related to previous management changes, and the termination of its South African franchise.
Guy Parsons, the former Travelodge boss who was hired as chief executive in July, said: “In the two months I have been with the group I am pleased with its progress and direction of travel.”
However, the company also revealed that after reviewing its properties in Liverpool and Manchester, “it now anticipates the likely opening of both hotels will be in late 2016, subject to receiving planning permission”.
Mr Parsons said: “Whilst the strategy is sound, I am currently having a hard look at how we can accelerate the growth of both the owned and franchised hotels as well as how we can improve the group’s core operational disciplines.”
EasyHotel explained that it had benefited from full-year contributions from its Glasgow property, expanded capacity at Old Street in London and a new opening in Croydon. With new franchisee hotels in Frankfurt and Prague now open, the group said revenue should be “materially ahead of the prior year”.
Net cash stood at £22m at the end of last month, including the anticipated release of a €3.3m security deposit on a Brussels hotel development.
Alex Paterson, an analyst at Investec, said: “We strongly believe that the operational model is working and will work on a significantly larger scale. [Mr Parsons] has a strong track record of building out budget hotels, opening one every 10 days at peak for Travelodge.”
The shares closed at 66p, down 7.04 per cent on the day.
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