EasyHotel swings to loss after trouble in Ipswich
24 January 2020, 09:14
Refurbishments on a listed building in the Suffolk town proved costlier than expected.
EasyHotel slipped to a loss for the full year as the company faced a major writedown over its new Ipswich hotel, the budget chain said.
Loss before tax hit £3.6 million in the 12 months ending September 30, following a £870,000 profit the year before.
Converting an old listed building in Ipswich proved more complicated than had first been thought, the company said, as builders ran into several issues.
As a result, easyHotel took a £3 million non-cash impairment on the hotel, which opened in January last year.
Revenue grew 56% to £17.6 million, the business said.
Meanwhile, adjusted earnings before interest, tax depreciation and amortisation (Ebitda) reached £4.2 million, a 42% rise.
Interim chief executive Scott Christie said: “EasyHotel has demonstrated the strength and resilience of its super-budget model, continuing to outperform a challenging market on a like-for-like basis over the course of the year.”
The hotel chain, which offers rooms from £19, said it opened another six sites during the year. These added 607 rooms to its portfolio, and are performing about as well as had been expected.
The business is already planning an extra 2,006 rooms, including a £40 million investment in non-franchised new hotels.
It plans to sell its office space in London’s Old Street for at least £15 million.
Mr Christie added: “Looking to the year ahead, whilst the uncertain political and economic landscape will continue to impact consumer sentiment, we remain confident that the easyHotel brand will continue to outperform the sector as consumers seek out the best value for money.”
The company announced earlier this month that Mr Christie will give way to a permanent chief when Francois Bacchetta joins from easyJet.
The hotel chain was founded in 2005 by Sir Stelios Haji-Ioannou, the entrepreneur behind easyJet.
It was thrust into the centre of a takeover battle last year when Sir Stelios blocked an attempt by Luxembourg group ICAMAP to take the firm private.
The founder, who still owns 28% of easyHotel, was able to stop the full takeover which would have removed its shares from the London Stock Exchange. ICAMAP now owns nearly 69% of shares in the business.