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PPHE Hotel Group Ltd on Thursday said it swung to a profit in the first half of 2023, boasting ‘record’ interim revenue and expressing confidence in its long-term growth.
PPHE shares were up 2.8% to 1,110.00 pence each in London within the first hour of trading on Thursday, having hit a high of 1,150.00p.
In the six months that ended June 30, the London-based hotel and resort operator swung to a pretax profit of £2.0 million from a loss of £26.1 million the year prior.
This was thanks to PPHE reporting ‘record’ revenue of £180.0 million, up 59% from £113.2 million in the previous year and up 16% from £155.3 million in the first half of 2019, before the outbreak of Covid-19.
Revenue per available room increased to £110.3 from £67.8 a year prior and was above the pre-pandemic level of £93.4 in the first half of 2019.
PPHE said it now entering its ‘strongest half’ of the year, and it is confident in its long-term growth, reiterating its expectations for the full-year.
It expects 2023 revenue of at least £400 million, up from £330.1 million in 2022 and earnings before interest, tax, depreciation and amortisation of at least £120 million, up from £94.6 million.
PPHE said it remains confident of long-term growth, which is ‘underpinned by the persistent strength of consumer leisure demand internationally, its quality assets, fully-funded development pipeline and strong financial position’.
Chief Executive Officer Boris Ivesha commented: ‘Our strong performance also enables us to reward our shareholders for their continued trust and support by returning to our historical capital returns policy of distributing approximately 30% of adjusted EPRA earnings, whilst also continuing to support investment in future growth opportunities.
‘We are now entering a very exciting time for the group, with our £300 million-plus pipeline nearing completion. New property openings are afoot in the next nine months, in Belgrade, Zagreb, Rome and London Hoxton and, upon stabilisation of trading, these new hotels are targeted to generate at least £25 million of Ebitda for the group.’
Cash and cash equivalents at June 30 stood at £137.8 million, down from £163.6 million on December 31.
PPHE said it now is in a position to return to its pre-Covid capital returns policy of distributing about 30% of adjusted earnings, which it said were £1.06 per share in the 12 months that ended June 30.
However, due to the discount of its share price to EPRA net reinstatement value per share, it will consider not just dividends, but also share buybacks and tender offers, or a combination of these. PPHE said it will provide an update on this in ‘the near future’.
EPRA NRV was £25.05 on June 30, marginally down from £25.17 on December 31.
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