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London hotels boost PPHE

RESULTS: The owner of the Park Plaza brand achieved organic profit growth of 25 per cent last year
March 5, 2013

Hotel owner-operator PPHE (PPH) enjoyed a vintage 2012. Even after a very bullish pre-close trading statement in January, it beat analysts' expectations by a wide margin. Adjusted pre-tax profits rose 77 per cent to €24m 9£21m) and even like-for-like cash profits - which exclude the impact of three acquisitions in Holland - rose a quarter.

IC TIP: Buy at 293p

This organic growth was driven almost entirely by the group's London hotels, particularly the Park Plaza flagship on Westminster Bridge roundabout. London occupancy remained high at 82 per cent, allowing the group to increase average room rates by 8 per cent to £137 a night. That in turn drove a 17 per cent improvement in sterling cash profits to £48.2m, more than offsetting a slightly weaker Dutch market.

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