Dalata Hotel Group (DHG) H1 2024 earnings summary

Executive summary

• Revenue grew 6% year-over-year to €302.3 million and adjusted EBITDA rose 4% to €108 million, driven by new hotel openings, portfolio expansion, and efficiency gains limiting cost inflation impact.

• Profit after tax declined 15% to €35.8 million, mainly due to adjusting items and softer like-for-like hotel performance.

• Four new UK hotels opened, doubling the UK hotel count to 22 and expanding the UK footprint by 20%; over 700 rooms in the pipeline and medium-term ambition to add 6,500+ rooms.

• Announced €30 million share buy-back and interim dividend of 4.1 cents per share, up 2.5% from last year.

• Sustainability progress includes a 29% reduction in Scope 1 & 2 carbon emissions per room sold since 2019.

Financial highlights

• Adjusted EBITDA margin was 39.4%, down from 40.6% in H1 2023, reflecting wage increases and cost pressures.

• Free cash flow was €48 million, lower than H1 2023 due to timing of refurbishment and higher lease payments.

• Profit after tax: €35.8 million (-15%); Basic EPS: 16.0c (-15%); Adjusted EPS: 16.9c (-8%).

• Net debt to EBITDA after rent at 1.3x, with significant headroom for further growth.

• Hotel asset portfolio value exceeds €1.7 billion, with 70% located in Dublin and London.

Outlook and guidance

• Group RevPAR for July and August 2024 was 1% ahead of 2023 on a like-for-like basis; Dublin and Regional Ireland in line, UK up 3%.

• Corporate and international demand remains strong, but domestic demand is softer; strong events calendar expected to support Q4.

• Full impact of 4.5% Irish VAT increase to be absorbed from September 2024.

• Medium-term ambition to add over 6,500 rooms, targeting over 19,000 rooms in total, focusing on UK, London, large European cities, and maintaining Irish market share.

• OpEx inflation for 2025 expected to be in the low single digits, with wage increases in Ireland speculated at 6–7%.