PPHE Hotel Group (PPH) is gearing up for two years of renovations following a strong set of 2014 results. Last year, record occupancy and room rates drove a 12 per cent increase in revenue per available room (RevPAR), while tight cost control and favourable currency movements prompted a 130 basis point margin improvement. The upshot was a 14.5 per cent improvement in like-for-like cash profits.
But over the next two years PPHE plans to renovate many of its hotels, while also continuing to open new sites both in the UK and abroad. By 2019, the group hopes to have 10,000 rooms in its portfolio, of which 3,500 will be in London.
In the short term, temporary closures for the renovations will sap top-line growth. As a result, analysts at FinnCap expect pre-tax profits of €30m (£22m) this year and EPS of 72.4ȼ, down from €32.9m and 78.6ȼ, respectively in 2014.
That said, 2015 is already off to a good start, with RevPAR in the first two months - the weakest season of the year - up on last year. Chief financial officer Chen Moravsky said current-year estimates are "conservative", and that it's "too early to tell" if strong trading will offset renovation costs.
| PPHE HOTEL GROUP (PPH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 504p | MARKET VALUE: | £219m | |
| TOUCH: | 500-508p | 12-MONTH HIGH: | 507p | LOW: 313p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 745ȼ | NET DEBT: | 149% | |
| Year to 31 Dec | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (ȼ) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 140 | 60.5 | 152 | nil |
| 2011 | 202 | 10.6 | 37 | 6 |
| 2012 | 242 | 67.6 | 164 | 12 |
| 2013 | 245 | 27.3 | 67 | 14 |
| 2014 | 270 | 41.6 | 100 | 19 |
| % change | +10 | +52 | +49 | +36 |
Ex-div: 19 Mar Payment: 21 Apr £1 = €1.37 | ||||
