News Column

PPHE Hotel Raises Dividend By 50% As First-Half Profit Doubles

August 28, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - PPHE Hotel Group Ltd Thursday declared a 50% increase in its dividend, after profits and revenue surged in the first half of the year, boosted by an increase in occupancy and in the price it charges for its hotel rooms.

The hotel group, which operates under the brands Park Plaza Hotels & Resorts and art'otel, said it expects its full-year results to be in line with its own trading expectations, after it reporting a pretax profit of EUR19.2 million for the six months to end-June, up from EUR9.3 million a year earlier.

"The second half of the year is usually the strongest trading period for us and taking into account the impact of the renovation programme, we expect the company's full-year results to be in line with the board's expectations," said President and Chief Executive Boris Ivesha in a statement.

The company said it got a EUR11.3 million profit boost from a combination of the sales of the freeholds of two Berlin hotels to a joint venture, the settlement of a litigation regarding the Park Plaza Westminster Bridge London hotel, and a fair-value adjustment to the deferred purchase price of four hotels in the Netherlands and three hotels in the UK.

Aside from the one-off profit gain, the hotel group said that organic profit growth was driven by a 12% increase in revenue to EUR125.4 million, up from EUR111.6 million last year, as revenue per available room - which is revenue generated from each room - grew by more than 12%, driven by a 250-basis-point increase in occupancy to 80.3%, and 8.7% increase in average room rate to EUR132.5.

On a like-for-like basis, total revenue increased by 11% to EUR120.4 million, up from EUR108.7 million.

"This growth was primarily driven by improved trading conditions in the UK and the Netherlands, contributions from art'otel amsterdam, which opened in October 2013, and the strengthening of sterling against the euro," the company said.

PPHE Hotel declared a 50% increase in its interim dividend to 9.0 pence per share.

The company said it continues to invest in its hotel portfolio, particularly in renovations, although it also has an active development pipeline.

It said it has "extensive" hotel renovations planned across key hotels in Amsterdam, Berlin and London, with several of them expected to commence in the second half of the year.

"Several extensive renovations are planned across our different operating regions and these may have a temporary negative impact on our performance due to closures of rooms and public areas. However, we believe that our investment in these renovation projects will have a positive impact on our long-term performance," the company said.

PPHe Hotel shares were up 3.8% at 449.50 pence Thursday midday.

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Source: Alliance News

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