PPHE Hotel Group Ltd (LON:PPH) has consolidated a H216 recovery with a “strong” start to 2017. The 21% like-for-like RevPAR gain in Q1, albeit on weak comparatives and currency-boosted, implies double-digit yield growth in key UK and German markets, which is impressive in uncertain times. Full-year prospects remain positive, boosted by transformative investment in London and Croatia, now the subject of major fundraising by its Arena subsidiary. Potential asset sales and associated return to shareholders, as in 2016, could be a significant catalyst for a share price at a huge discount to real asset value.
The 21% like-for-like RevPAR increase is necessarily striking, so should be seen against a soft first quarter in 2016 after the Paris attacks and a c 11% positive currency effect. Although detailed regional performance in Q1 is not disclosed, we may infer at least double-digit gains in London and Germany since Amsterdam was apparently relatively quiet and Croatia was not significant as Q1 is low season. Such a performance was broadly in line with the London market, as newly reported by STR (+11%), IHG (+12%) and Millennium (+14%), amongst others.
To read the entire report Please click on the pdf File Below