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SNOOZEBOX HOLDINGS PLC
UPDATE ON TRADING AND STRATEGIC DEVELOPMENT
Snoozebox Holdings plc (AIM: ZZZ) today provides an update on trading and strategic development.
In 2015, the Company will have provided accommodation to over 40 events in the UK and Europe, compared to 11 events in 2014.
As planned, Snoozebox's 'trailblazing' strategy has enabled the Company to take advantage of a number of additional opportunities to develop its events footprint at music, motorsport and other events in both the UK and Europe and provide improved visibility. For example, the Company will attend around 20 music events this year, compared to two in 2014.
This season, Snoozebox sought to develop its footprint and establish its presence as the preferred accommodation provider in the events market. Snoozebox now has two proven products, Snoozy and the Snoozebox new event hotel, to service the events market and is confident of deploying the balance of the original room stock on a semi-permanent basis. As regards these, planning permission is in process for over 600 rooms at five locations. In 2015, the Company increased its revenue per room on the original room stock by almost 100% to over £9,000 per room, largely driven by deployments at the Eden Project and the Falkland Islands.
Turnover for 2015 is expected to be in line with market expectations. The Company anticipates higher operating costs this year associated with the substantial increase in activity in events and the acceleration of the deployment of the original stock on a semi-permanent basis. It is anticipated that the mobilisation costs in respect of the five additional semi-permanent hotels, will be incurred prior to the year end, with the hotels ramping up in Q1 2016. As a result of these developments, the expected 2015 EBITDA level is a loss of approximately £5m. The revenue from the further semi-permanent deployments is expected to be realised in 2016.
In 2014, the Company set out a new strategy to position the business for long-term growth and has since been focused on the following objectives:
1. Design, develop and deploy a new portable hotel room capable of generating a return from events
2. Deploy the first generation room stock on a longer term basis
In 2015, the Company has accumulated the operational data necessary to validate the investment case and market opportunity in events. This has involved the achievement of the target capital cost per room, the verification of logistics and operational assumptions and the accumulation of operational expertise. In relation to the first generation room stock, the Company is confident of deploying the remaining stock on a long term basis.
In addition, the Company has identified a broader opportunity in the events market and is further developing its offering to capture this demand. The Company is also confident that there is a sizeable opportunity in the semi-permanent market and has developed a leisure hotel model, workforce hotel offering and a temporary housing model. In addition to the opportunities mentioned hitherto, there is a strong pipeline and the Company has submitted planning applications for its first two temporary housing deployments on behalf of local authorities in London.
The Company is now focused on further accelerating growth to exploit the full potential of the 2016 events season and the long-term opportunities in its markets.
Lorcán Ó Murchú, Chief Executive, commented: "2015 has been a year of transition for Snoozebox. We have transformed our product into a diverse and fully executable offering capable of deployment at a wide range of events, supported by a growing semi-permanent business. We are confident in the long-term opportunities in our markets and our ability to profitably scale the business."
5 November 2015
Panmure Gordon 020 7886 2500
Tulchan Communications 020 7353 4200
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