PPHE Hotel Group (PPH) H2 2023 earnings summary

Executive summary

• Record 2023 revenue of £414.6m and EBITDA of £128.2m, exceeding expectations and recovering above 2019 levels; leisure demand remained strong as corporate and event bookings began to normalise.

• Premium lifestyle art’otel London Battersea Power Station fully opened; art’otel Zagreb soft-launched, and development and repositioning projects advanced across Europe.

Financial highlights

• Revenue £414.6m vs £330.1m in 2022 and £357.7m in 2019; EBITDA £128.2m vs £94.6m and £122.9m, respectively.

• EBITDA margin 30.9% vs 28.7% in 2022 and 34.4% in 2019; adjusted EPRA EPS 118p vs 50p and 128p, respectively.

• RevPAR £120.7 vs £96.2 in 2022 and £103.6 in 2019; average room rate £166.8 vs £160.4 and £128.5, while occupancy was 72.4% vs 60.0% and 80.6%.

• EPRA NRV rose to £26.72 per share at 31 December 2023 from £25.17 a year earlier; 2023 earnings added £0.53 per share and revaluation added £1.19.

Outlook and guidance

• FY2024 performance expected to be in line with market consensus; analysts’ range was revenue £435.5m–£466.9m, mean £450.0m, and EBITDA £135.3m–£150.9m, mean £142.7m, as of 28 February 2024.

• Forward bookings started the year at levels consistent with the same time last year; balance between room rates and occupancy expected to normalise.

• Remaining cost inflation expected to be manageable, with utility hedges supporting margins and labour cost pressures being managed.

• 2024 openings and stabilisation of recent projects expected to add capacity and EBITDA; pipeline openings include art’otel London Hoxton, art’otel Rome, and Radisson RED Berlin.