The 16 per cent share price spike suggests the rooms look very inviting at PPHE Hotel Group (PPH). The group is set to substantially increase its London footprint this year with two new sites opening in the capital and a major extension to be completed. It also won a fiercely fought battle to develop a new hotel at the soon-to-be-renovated Battersea Power Station site. It's worth noting that these expansion projects were being driven through just as occupancy rates across PPHE's UK hotels flatlined, although an increase in room rates meant that UK revenues were up as a whole.
Chief financial officer Chen Moravsky dismissed concerns about saturation in the London market, claiming the hotelier had several locations on the increasingly popular Southbank and was also benefiting from strong corporate demand for conference space and accommodation.
Elsewhere, Europe proved to be a mixed bag. Average room rates rose in the Netherlands as well as in the group's Germany and Hungary divisions, but occupancy only grew in the former. The Arenaturist business PPHE part-owns in Croatia also performed well. Post-period-end, it upped its stake in the group to 74 per cent.
Analysts at finnCap expect adjusted pre-tax profits of €39.5m (£30.6m) this year, leading to adjusted EPS of 94.1¢, compared with €40.7m and 102.5¢ in 2015.
| PPHE HOTEL GROUP (PPHE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 720p | MARKET VALUE: | £302m | |
| TOUCH: | 700p-740p | 12-MONTH HIGH: | 763p | LOW: 516p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 869¢ | NET DEBT: | 148% | |
| Year to 31 Dec | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 202 | 10.6 | 37.0 | 6.0 |
| 2012 | 242 | 67.6 | 164.0 | 12.0 |
| 2013 | 245 | 27.3 | 67.0 | 14.0 |
| 2014 | 270 | 41.6 | 100.0 | 19.0 |
| 2015 | 302 | 38.8 | 97.0 | 20.0 |
| % change | +12 | -7 | -3 | +5 |
Ex-div: 14 Apr Payment: 20 May £1=€1.28 | ||||
