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The Times {Main}
Keyword:
Stelios Haji-ioannou
UK
Thursday 4, June 2015
42
178 sq. cm
ABC 393826 Daily
page rate £16,645.00, scc rate £75.00
020 7782 5000
EasyHotel has less
room for manoeuvre
as share price falls
Dominic Walsh
Sir Stelios Haji-Ioannou’s easyHotel
group slumped below its flotation price
on the back of rising costs and slowerthan-expected expansion prospects.
Shares in the budget hotel chain,
which floated at 80p this time last year,
fell by 7p to 74p, down 8.6 per cent,
ever, he said that returns on capital
invested in projects were very high and
he was confident the £3 million cost of
buying and converting the Liverpool
site would be just as successful.
amid disappointment over its half-year
results statement.
The company, which owns three
hotels and has 18 franchised properties,
reported a doubling of revenues to
£2.6 million and pre-tax profits before
head office costs up 122 per cent to
£1.35 million.
Simon Champion, easyHotel chief
executive, said: “Profit growth has been
dampened this year because of the
additional costs incurred by being a
public company, as well as investing to
meet significant development targets.”
Analysts also expressed concern
over the chain’s opening programme,
with Alistair Ross, of Investec, cutting
his forecast for new hotels from four a
year to two next year and three thereafter. As a result, he has reduced his
2016 earnings forecast by 58 per cent.
Mr Champion declined to comment
on the share price movement, insisting
that the group’s prospects remained
strong, and that the opening of a newly
acquired property in Liverpool next
spring would be followed by several
more.
He said that the group was assessing
several opportunities for site acquisitions, mainly in the UK regions, while
holding “ongoing discussions regarding
new franchise contracts”.
Mr Champion said that such deals
were “necessarily lumpy”, while the
small size of the company meant that
openings could have a disproportionate
impact on profit and turnover. How-
Sir Stelios Haji-Ioannou’s budget hotel
chain has owned and franchised sites
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