PPHE Hotels: Art’otel owner reports double-digit growth despite project delays

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Retail Reporter

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Occupancy of hotels has risen but higher staff costs mean profitability has fallen
Higher costs meant hotel profits fell in October

Hospitality real estate group PPHE has reported double-digit growth despite delays to multiple hotel projects this year.

Like-for-like total revenue growth at the LSE-listed company was up 4.3 per cent to £187.8m in the six months ended 30 June 2024, from £180m in the first half of 2023.

The total revenue performance for PPHE’s London portfolio was flat “against a strong 2023 comparative”, the company said, with “solid revenue growth in all other territories”.

“We are pleased to report a solid like-for-like hotel portfolio performance for the Group, with record revenues following significant increases last year, and good momentum across the portfolio against a more measured travel market backdrop,” Greg Hegarty, co-chief executive officer of PPHE Hotel Group said.

Guernsey-registered PPHE opened art’otel this year, and said its £300m pipeline of projects “nears completion”, with new property openings and soft launches in Zagreb, Belgrade, Rome and London Hoxton.

PPHE owns and operates the art’otel brand and the Arena hospitality brands, as a well as a Radisson Hotel Collection and two Radisson RED properties.

However, multiple projects have suffered from delays and would not open until later this year or next it added.

“Our unwavering commitment to delivering high quality assets and services has meant that some properties have taken longer to get up and running than originally planned, however our focus remains committed to enhancing the value of our assets wherever possible,” he added.

Like-for-like earnings before tax, interest, depreciation and amortisation (EBITDA) rose 10.9 per cent to £50.2m from £45.2m in 2023.

PPHE’s like-for-like EBTIDA margin improved to 26.7 per cent, from 25.1 per cent last year, and reported EBITDA was £48.3m, up from £45.2m.

Average room rates were flat at 4.4 per cent, while like-for-like occupancy rates increased to 72 per cent, from 69.1 per cent in 2023.

The firm has proposed an interim dividend of 17p per share, from 16 per cent in 2023.

In addition, “in light of the current share price discount”, the board launched a new share buyback programme of up to £4m on 11 July 2024. The group completed a £3.8m buyback in March 2024.