Gains in London are offsetting a weak Dutch market for PPHE Hotel Group (PPH), which owns the Park Plaza and art'otel brands. The overall effect was a flat first half, with revenues up by 0.7 per cent and adjusted profits down from €5.3m to €5m (the reported numbers are skewed by accounting changes). On a constant-currency basis, profits were higher than last year - but that was partly because the company increased its shareholding in three Dutch hotels.
London continues to drive the company's growth and profitability. "In London there's always demand from somewhere. If it's not the US it's Asia Pacific, and the balance between business and leisure is very healthy," says finance chief Chen Moravsky. Room rates in the UK fell marginally, from £132 to £130, but that was easily outweighed by an increase in occupancy to 84.4 per cent. The second half of 2012 benefited from the London Olympics, but even so Mr Moravsky reckons the growth will continue.
Occupancy was maintained in Holland, but a soft local economy depressed room rates from €111 a night to €104. The country is facing a rapidly deflating housing bubble, as well as the wider eurozone slump, although management did note an improvement in second-quarter trading.
Brokerage Investec expects adjusted EPS of 49.3¢ this year, down from 59¢ in 2014, before a rebound to 63¢ in 2014.
PPHE HOTEL GROUP (PPH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 303p | MARKET VALUE: | £124m | |
| TOUCH: | 298-308p | 12-MONTH HIGH: | 329p | 210p |
| DIVIDEND YIELD: | 4.0% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 572p | NET DEBT: | 176% | |
| Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 111 | 54.9 | 134 | 6.00 |
| 2013 | 112 | 9.3 | 23 | 6.00 |
| % change | +1 | -83 | -83 | - |
Ex-div: 28 Aug Payment: 11 Oct €1 = 86p | ||||
