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Tue 13th Jan 2015 - Beds and Bars chops debt by £15m, reveals ‘industry leading’ results
Beds and Bars chops debt by £15m, reveals ‘industry leading’ results: Pan-European hostel provider Beds and Bars, led by Keith Knowles and chaired by Tim Sykes, has reported a ‘truly amazing set of numbers’ as it pays down more than £15m of bank debt. Turnover rose 20% to £33,460,781 (2013: £27,939,286) in the year to 29 March 2014 thanks to a contribution from the company’s second opening in Paris (opened in July 2013), with like-for-likes up 5%. The company’s improved trading performance comes as it takes step to slash debt through a small number of freehold sales and a key freehold sale-and-leaseback. The company sold its Oasis site in Borough, London whilst retaining a short-term lease – it accounts for just 1% of bedroom stock. In April 2014, its freehold in Brighton was sold for net proceeds of £2,265,000, a site considered non-core in line with the company’s strategy to focus on European capital cities. In September 2014, it undertook a 15-year sale and leaseback of the Winston Hotel, Amsterdam, reducing the group’s gearing by realising 10.7m euros. The company stated: “The effect of these sales, together with the scheduled debt repayments has been to reduce the bank debt level by £15m, and to considerably strengthen the group’s ability to look at future growth and development on a sure-footing. One of the results of paying down this debt was that the existing facility with HBOS was substantially changed and the remaining facility is now on an on-demand basis. The company is in the final stages of negotiating alternative facilities that are consistent with the improved debt and Ebitda profile.” The company expects to have reduced its Ebitda to debt ratio from circa 10x to 4x by the end of March 2015. The company produced £3,731,116 of Ebitda in the year to the end of March 2014 compared to £2,269,264 the year before. Profit before tax was £1,458,276 compared to a loss of £751,804 the year before. The company’s performance has strengthened in the first half of its current financial year, with unaudited Ebitda of £3,109,000. Accommodation sales have beaten budget by £656,400 in the first six months of the 2015 FY, with a 2.1% rise in occupancy and a 3.5% price improvement. Four of the company’s 21 sites have reported Ebitda growth of more than 100%, a further 11 sites have Ebitda growth greater than 20% – and only three sites are not in double digit Ebitda growth. Managing director Murray Roberts has told a company conference that the company had achieved an outstanding UK turnaround since 2012, when sales were affected by tourists staying away during the Olympics. UK bar sales were up £797,000 in the First Half of 2015 FY compared to the year before – £30,600 per week more than the prior year without the site in Brighton. A new menu is already producing food growth after a prior “ill-conceived menu change”. In a note to staff at the end of last year, Knowles said: “For me the results we have seen over the past 24 months are simply outstanding – the focus and commitment of unit teams to raising their overall operational standards can be clearly seen in our results. The UK performance is industry-leading and team led by Murray Roberts has been outstanding.” In the most recent financial year, £16.6m of turnover derived from the UK and £15.6m from Europe.

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