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Wed 8th Apr 2015 - Snoozebox reduces losses
Snoozebox reduces losses: Snoozebox Holdings has reported a reduction in losses on operating activities to £5.4m in the year ended 31 December 2014 compared to £9.3m in the prior year. There was a positive contribution to overheads of £0.5m, 17% of revenues of £2.8m. This compares to a negative contribution of £1.1m in the prior year on an adjusted revenue of £2.2m. It reported £20.7m of net assets, with debt of £9.7m, with cash at the year-end of £16.9m. It said 2014 milestones were: the business has generated a positive contribution to overheads for the first time; 50% of the existing room stock is committed profitably on a semi-permanent basis with an expanding pipeline; £26m of additional funding secured; and the launch of a new generation of Snoozebox rooms, capable of faster deployment and offering flexible and easily configurable accommodation options. Chief executive Lorcán Ó Murchú said: “Snoozebox has made progress during 2014 and is reporting results for the year in line with expectations. We have secured additional funding and are investing in a new generation of hotel room stock. We have turned around the events programme and reduced overheads. We have made substantial progress in the underlying operating model and in particular with the semi-permanent hotel offering, establishing a platform for growth. 2014 was spent executing the initial phases of the company’s new strategy. There has been a considerable turnaround in the trading performance and stability of the business in the year, in addition to the achievement of the key objectives arising from the review of the business in 2013. The company also generated a positive contribution to central overheads for the first time, amounting to £0.5m, or 17%, on £2.8m of sales, compared to an adjusted contribution to central overheads of negative £1.1m on adjusted revenues of £2.2m. There has been a reduction in the loss before taxation to £5.6m from £9.4m in the prior year. A key challenge in 2014 was to complete the design and development of the new Snoozebox hotel. The objective of the new design is to enable profitable deployment at short-term events. The new rooms are designed to optimise speed of deployment and offer multiple room configurations. The main focus of the newly designed modules is on the integration of systems and ancillaries to minimise the assembly process. The outcome is a more flexible model that is capable of an event per week. The previous model could be committed for up to three weeks in order to service one weekend event. The innovative new design will result in the company being capable of deploying to more events at a lower cost and substantially increase available room nights. There were certain aspects of the internal design and configuration that required refinement during the prototyping stage. The establishment of a supply chain to achieve the targeted capital cost per room also took additional time. As a result the majority of the 150 new rooms will become available in the second half of 2015. Ideally, more new rooms would have been built and operational earlier in 2015, however, pursuit of the optimum design and capital cost are critical to value creation in the long term and the newly designed Snoozebox represents a major step forward in portability of infrastructure. The next stage of development of the event model is the concept of the Snoozebox accommodation village. This will see the current hotel offering complemented by innovative social areas and multiple tiers of sleeping accommodation to create a vibrant community for event goers. To this end, a number of events in 2015 will showcase new features including an innovative ‘pop-up’ Snoozebox room. This initiative will extend the Snoozebox experience to a much broader audience, as we look to establish a brand standard in the temporary sleeping accommodation market.”


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