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• Like-for-Like Revenue: Increased by 4.3% to GBP187.8 million.

• Like-for-Like EBITDA: Rose by 10.9% to GBP50.2 million.

• EBITDA Margin: Improved to 26.7%.

• Revenue: Total revenue of GBP191 million, up 6.1% year-over-year.

• RevPAR: GBP109.9, down 0.3% on a like-for-like basis.

• Occupancy Rate: Increased to 72% from 69.1% in the previous year.

• Average Rates: Decreased by 4.4%.

• Interim Dividend: Proposed increase to 17p per share, up from 16p in 2023.

• Cash Flow: Operational cash flow of GBP50 million; CapEx outflow of GBP53 million.

• Debt Service and Payments: GBP48 million paid, including GBP23 million in bank loan repayments.

• EPRA NRV: Reported at GBP26.24.

• Warning! GuruFocus has detected 7 Warning Signs with LSE:PPH.

Release Date: August 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• PPHE Hotel Group Ltd (LSE:PPH) reported record-breaking performance in both revenue and EBITDA despite challenging macroeconomic conditions.

• The company has a unique integrated business model, managing the entire value chain from development to operation, which sets it apart from competitors.

• PPHE Hotel Group Ltd has a strong partnership with Radisson Hotel Group, providing exclusive rights to use the Park Plaza brand in Europe, Middle East, and Africa.

• The company announced an increase in interim dividend from 16p to 17p per share and launched a share buyback program of up to GBP4 million.

• PPHE Hotel Group Ltd has successfully opened several new properties, including the artotel London Hoxton and Radisson RED Berlin Kudamm, with more openings planned in Rome and other locations.

Negative Points

• The company faced delays in the opening of new properties due to supply chain issues and bureaucratic challenges, particularly in Rome.

• Average room rates decreased by 4.4%, impacting RevPAR, although occupancy rates increased.

• Development costs and debt financing for construction have significantly impacted the company's balance sheet.

• The New York project remains on hold due to increased build costs and changes in legislation, with the company currently not planning to proceed with the hotel development.

• There is a significant discount between the company's share price and its NAV, which management attributes to the complexity of the business and current market conditions.

Q & A Highlights

Q: Can you explain the opening phasing and stabilization process for new properties? A: Greg Hegarty, Co-CEO, explained that when opening a new property, they phase the occupancy to manage costs and test market demand. They open inventory floor by floor to ensure operational efficiency. Typically, a hotel reaches full potential within three to six months, with the third year being the most productive.