easyHotel PLC on Friday said it will consider its dividend policy amid challenging trading conditions which are not expected to improve over the medium-term.
The stock was trading 11% higher in London on Friday in early trade at 110.00 pence a share.
The super-budget hotel chain said total system sales were up 28% in the year to the end of September to GBP47.8 million from GBP37.3 million reported a year ago.
easyHotel highlighted that despite the ongoing political and economic uncertainty facing the UK, owned hotels have continued to outperform the UK hotel market on a like-for-like basis.
easyHotel’s owned hotels like-for-like revenue per available room was up 7.7%, but franchise like-for-like RevPar down 1.6% over its most recent financial year.
“The hotel markets have remained challenging in the second half of the financial year, particularly in the UK where we are seeing dampened consumer confidence. Whilst our owned hotels have continued to outperform the market, we have not been immune to the weaker regional hotel market and trading across our franchised portfolio has continued to be subdued,” said Chief Executive Guy Parsons.
The AIM-listed company reported revenue growth of 56% to GBP17.6 million from GBP11.3 million year-on-year.
easyHotel said it has maintained a “tight” control of costs, but against the challenging trading environment it anticipates adjusted earnings before interest, taxes, depreciation, and amortization closer to GBP4.6 million for the year ended September 30. In comparison, last year, the UK-based company’s adjusted Ebitda totalled GBP3.0 million.
In addition, easyHotel’s current dividend policy will be reviewed prior to the publication of annual results. The company will consider ending the dividend as it looks to grow its current hotel estate.
“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,” added Parsons.
By Evelina Grecenko