PPHE Hotel Group

LN: PPH

£900.1m market cap

2120p 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

The FY19 trading update, in January, was solid and management indicated that it would deliver results (due on 27 February) in line with expectations. Room revenue, which represented c 69% of total group revenue in FY18, grew l-f-l by 6.3% following 6.7% growth in FY18. The key drivers of growth in FY19 were London and the Netherlands. FY20 will continue to benefit from the two recently-reopened Park Plaza hotels in the Netherlands. Longer-term growth will be helped by the £300m development pipeline including key art’otel projects in London and New York.

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 33.0 7.8
2018A 341.5 113.2 40.2 77.5 27.4 8.4
2019E 353.0 123.0 43.0 79.0 26.8 7.3
2020E 371.0 128.0 45.5 82.5 25.7 7.0
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, recently confirmed that it ‘maintains a cautious outlook’.

Last updated on 18/02/2020
Sector
Consumer
Share price graph
Balance sheet
Forecast net debt (£m) 506
Forecast gearing ratio (%) 102
Price performance
%
1m
3m
12m
Actual 8.2 12.2 19.1
Relative* 11.1 9.1 13.6
52-week high/low 2120.0p/1630.0p
*% relative to local index
Key management
Eli Papouchado Chairman
Boris Ivesha CEO
Daniel Kos CFO

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