PPHE Hotel Group

LN: PPH

£802.4m market cap

1890p last close

PPHE Hotel Group is an integrated owner and operator of four-star, boutique and deluxe hotels in gateway cities, regional centres and select resort destinations, predominantly in Europe.

Investment summary

Q319 has seen PPHE deliver (eg like-for-like RevPAR +4%) against a strong comparative. Unsurprisingly, given positive market reports, London, the company’s largest profit source, has been the driver, boosted by maturing properties as well as the newly-repositioned Holmes Hotel. Amsterdam has also traded well, benefiting from recent investments, notably flagship Victoria Amsterdam. Croatia was predictably flat in its busiest period owing to competition, yet matched a record 2018 thanks to high-profile campsite investments. With current-year expectations unchanged ahead of key Q4 trading, longer-term growth is being driven by a £300m investment programme with all hotels in the UK and Netherlands now open and projects such as art’otels in London and New York well in hand.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2017A 325.1 107.3 34.5 64.2 29.4 7.0
2018A 341.5 113.2 40.2 77.5 24.4 7.5
2019E 353.0 123.0 43.0 79.0 23.9 6.5
2020E 371.0 128.0 45.5 82.5 22.9 6.3
Industry outlook

Security and Brexit uncertainty are concerns, but the London hotel market shows continued resilience (Q319 RevPAR +4.8%, per STR) and benefits from increased tourism owing to sterling weakness. Greater measurable worries are room supply, which is above its long-term trend, slower economic growth and rising operating costs. GL, London’s largest hotel owner/operator, newly confirms that it ‘maintains a cautious outlook’, while, per pwc, 2020 market RevPAR gain may be marginal.

Last updated on 15/11/2019
Sector
Consumer
Share price graph
Balance sheet
Forecast net debt (£m) 506
Forecast gearing ratio (%) 102
Price performance
%
1m
3m
12m
Actual 2.2 7.4 21.2
Relative* 0.9 3.0 15.9
52-week high/low 1990.0p/1540.0p
*% relative to local index
Key management
Eli Papouchado Chairman
Boris Ivesha CEO
Daniel Kos CFO

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