Higher than expected costs and delayed openings suggest that our EBITDA forecasts may now be met only thanks to consolidation of PPHE Hotel Group Ltd's (LON:PPH) Croatian resort businesses. However, despite continued headwinds there is reassurance that assumed like-for-like EBITDA shortfall, notably in London, is partly related to current transformative investment (consolidated rooms to rise this year by c 70%), with full pay-off from 2018. Robust finances are evident in the recent special dividend of 100p/share and successful property refinancings, which underline substantial hidden reserves (‘fair value’ adjustment of c 1,000p/share to reported 803p NAV).
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