PPHE Hotel Group (PPH) has now completed its multi-year £100m-plus investment programme, aimed at upgrading its property portfolio in the UK and Netherlands. This spending seems to be bearing fruit - like-for-like revenue per available room improved by 7.5 per cent during the first half, thanks to a 4.8 per cent increase in the average room rate to £121.70. Occupancy rates were also higher.
Chief executive Daniel Kos attributed the UK’s success to the group’s focus on London, and noted that Amsterdam is likely to continue to perform strongly as demand exceeded supply, with new hotel permits withheld to prevent overcrowding in the city.
The focus has shifted to new developments, as PPHE expects to spend around £300m on the current pipeline, including an art’otel location in London’s Hoxton. Mr Kos said the company currently has enough financial headroom in its debt covenants to fund these developments.
Analysts at finnCap forecast adjusted pre-tax profits of £41.7m in 2019, giving EPS of 74.2p, increasing to £45m and 79.5p in 2020.
| PPHE HOTEL GROUP (PPH) | ||||
| ORD PRICE: | 1,720p | MARKET VALUE: | £ 729m | |
| TOUCH: | 1,720-1,740p | 12-MONTH HIGH: | 2,020p | LOW: 1,485p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 880p | NET DEBT: | 112%* | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 149 | 16.4 | 0.42 | 16.0 |
| 2019 | 155 | 4.3 | 0.16 | 17.0 |
| % change | +4 | -74 | -62 | +6 |
| Ex-div: | 19 Sep | |||
| Payment: | 15 Oct | |||
| *Does not include lease liabilities of £192m or restricted deposits and cash of £1.89m | ||||
