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Dalata plans for dividend payments

The hotel group announced that it will begin paying dividend as of the half-year results in September
February 27, 2018

Dalata Hotel (DAL) shareholders should look forward to the half-year results in September this year: the group has just announced that it will start paying dividends from that point onwards. Deputy chief executive Dermot Crowley said the time "feels right" now that the company has made good progress developing new rooms and cash flows are strong enough to support regular payments. The policy will be to pay out between 20 per cent and 30 per cent of after-tax profits.

IC TIP: Buy at 520p

Mr Crowley is confident that initiating dividend payments won't come at the expense of the group's ambitious growth plans. Dalata currently has 2,200 new rooms in its development pipeline, and wants to add a further 1,200 new rooms to that pipeline per annum over the next five years. So far, extra capacity hasn’t hurt the group’s results: revenue per available room (RevPAR) increased 10 per cent to €88.51 in 2017, compared with a 7 per cent market average, as customers managed to stomach a 9 per cent increase in average room rates to €106.48.

Analysts at Goodbody expect adjusted EPS of 40¢ in 2018, compared with 37.9¢ in 2017.

DALATA HOTEL GROUP (DAL)  
ORD PRICE:520pMARKET VALUE:£955m
TOUCH:500-520p12-MONTH HIGH:560pLOW: 365p
DIVIDEND YIELD:NILPE RATIO:16
NET ASSET VALUE:401¢NET DEBT:33%
Year to 31 DecTurnover (€m)Pre-tax profit (€m)Earnings per share (¢)Dividend per share (¢)
201360.60.0-6074nil
201479.14.03.7nil
201522628.514.6nil
201629144.119.1nil
201734877.337.2nil
% change+20+75+95-
Ex-div:na   
Payment:na   
£1=€1.13