Safestay (AIM:SSTY) has provided shareholders with a brief COVID-19 update including an overview of the experiences under lockdown to date and an insight into the step’s management have taken to protect the business.
Importantly, Safestay was given insight into some of the effects of the outbreak of COVID-19 from shareholders based in Singapore, which had seen occupancy rates fall substantially post the outbreak of COVID-19 in their territories. This gave to the Company some time to prepare for events that were about to transpire across Europe.
The Company rapidly compiled various business plans for different scenarios including the complete lockdown and closing all the accommodation properties.
The Company has now successfully renegotiated with landlords and has taken the UK Government's option to furlough staff to ease cash burn through this difficult time.
The extended overdraft with HSBC further strengthens the financial position of the Group and whilst the Company doesn’t wish to use the facility, it clearly provides both management and shareholders with high levels of comfort the Company can trade out of the current lockdown.
During lockdown, the Company has been busy reviewing and modernising internal procedures, revitalising its marketing functions and re-training staff, particularly front-line management ensure the Company can rapidly return to trading when the lockdown eases.
Whilst there is no desperate financial requirement to re-open, the Company is fully prepared to open locations from the 1st of June or whenever it is safe to do so thereafter.