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PPHE's year of investment

The group has reinvested money to keep growing its business - and it's paying off
PPHE's year of investment

Sometimes old clichés ring true, such as spend money to make money. It certainly seems the case for hotel developer PPHE (PPH), which reported a 6 per cent rise in like-for-like revenues and a 5.6 per cent improvement in like-for-like cash profits last year. That follows a decision to spend 4 per cent of revenues on maintenance, but the group still ended up with £208m of cash on its balance sheet. Matters were helped by a five per cent increase in revenue per available room (RevPAR) on an underlying basis, with positive contributions from all geographic regions.

IC TIP: Hold at 1800p

The group invested £60m in its portfolio in 2018, including "repositioning programmes" – translate that as refurbishments – at the Park Plaza Victoria Amsterdam and the Park Plaza London Riverbank. Further projects are underway at Park Plaza Vondelpark in Amsterdam and Park Plaza Sherlock Holmes London, both of which should complete in the second half of this year. It also acquired 100 per cent ownership of the development site for the art’otel London Hoxton, which is due to open in 2022.

Analysts at Berenberg expect to see EPS of 79p in 2019, compared to 69p in 2018.

PPHE HOTEL GROUP (PPH)  
ORD PRICE:1,800pMARKET VALUE:£ 761m
TOUCH:1,790-1,810p12-MONTH HIGH:1,805pLOW: 1,105p
DIVIDEND YIELD:1.9%PE RATIO:20
NET ASSET VALUE:883pNET DEBT:100%
Year to 31 DecTurnover (€m)Pre-tax profit (€m)Earnings per share (¢)Dividend per share (¢)
201427041.610019.0
201530238.897.020.0
Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201627238.283.021.0
201732531.757.024.0
201834146.490.035.0
% change+5+46+58+46
Ex-div:25 Apr   
Payment:20 May   
£1 = €1.16