PPHE Hotel Group, the international hospitality real estate group which develops, owns and operates hotels and resorts, announces its unaudited interim results for the six months ended 30 June 2022 (the 'Period').

Financial highlights

Total revenue was up 339.4% year-on-year at GBP113.2 million (H1 2021: GBP25.8 million), which represented 73% of the pre-pandemic levels reported in H1 2019. Quarter-on-quarter momentum in the Period saw Q2 2022 trading at 87.5% of Q2 2019 levels compared with 51% of these levels in Q1 2022.

Revenue growth was driven by both strong rate growth as well as a good recovery in occupancy rates. Average room rate was GBP141.1, up 48.2% compared with H1 2021 and up 16% on H1 2019. Occupancy grew to 48% compared with 12.8% in H1 2021 and 76.8% in H1 2019.

EBITDA improved to GBP17.0 million compared to an EBITDA loss of GBP14.0 million in H1 2021, driven by the recovery in demand. Notwithstanding the labour market constraints, wage inflation and Group-wide reopening programme, EBITDA margins are improving year-on-year.

EPRA NRV per share* at 30 June 2022 was GBP21.88 (31 December 2021: GBP22.15), a slight year-on-year reduction due to the reported loss for H1. Revaluations will be completed at the year end, as per usual course of business.

The strength of recovery across the Group's key markets and the resilience of its financial performance has allowed for the re-instatement of the interim dividend at 3 pence per share (H1 2021: nil) and the commencement of a share buyback programme in June 2022.

(*) EPRA NRV and EPRA NRV per share were calculated based on the independent external valuations prepared in December 2021.

Operational highlights

All our key markets delivered strong growth, with the UK leading the way as it benefited from the earlier lifting of pandemic restrictions compared with other markets. The Netherlands, Germany and Croatia have shown increasingly strong recoveries as the months progressed and restrictions were lifted.

A significant rebound in leisure travel demand throughout the Period. Corporate demand activity is also increasing, and the Group is experiencing steadily increasing demand for meetings and events spaces.

The Group's commercial focus during this recovery period has been rate-led rather than occupancy-led, which resulted in very strong average room rate performance across all operating markets, at 16% ahead of pre-pandemic levels in H1 2019. There was also a strong year-on-year improvement in occupancy across the portfolio.

This rate-led approach has allowed the Group to better navigate the challenging cost environment that continues to impact the whole industry, including in the labour market where wage inflation remains.

The Group has also proactively mitigated rising costs through the successful delivery of a number of internal initiatives which have helped to protect margins. For example, rising energy costs have been mitigated for this financial year through prudent hedging action.

Strategic highlights

Significant extension of long-standing and successful partnership with Radisson Hotel Group. This expansion will allow both PPHE and Radisson to further leverage their respective brand strengths. For PPHE, this will allow further diversification of market segments, increase growth prospects for Park Plaza and art'otel in multiple new territories, and generate fee-based income.

Grand Hotel Brioni Pula was relaunched as a Radisson Collection Hotel, the first PPHE hotel to operate and market under this new partnership.

Good progress continues to be made across the Group's development pipeline, including all art'otel projects which remain on track across London Hoxton (opening H1 2024), London Battersea Power Station (opening in late 2022), Zagreb (opening in Q2 2023) and Rome (opening H2 2023).

Strategic recruitment and talent attraction initiatives implemented in FY2021, along with our committed approach to training and upskilling, have resulted in strong recruitment and retention of team members across the Group despite wider sector challenges and shortages. This helped the Group to rapidly reopen hotels and ramp up operations when restrictions lifted.

Joined Zero Carbon Forum which will aid the Group in formulating its strategy and targets to achieve net zero status.

Current trading and outlook

July and August total revenues above 2019 same period, mainly driven by strong room rate performance, albeit mainly leisure driven.

Forward booking pace continues to be solid, with growing numbers of bookings in the corporate, meetings and events segment.

Industry wide inflationary pressures remain, particularly around energy prices, creating margin headwinds into 2023.

Room-rate strategy and further investments in technology, automation and energy efficiency partly mitigating cost pressures.

Commenting on the results, Boris Ivesha, President and Chief Executive Officer, PPHE Hotel Group said: 'We are pleased to report a strong first half performance, which has been achieved by our exceptional teams despite the challenging backdrop. As COVID restrictions have been lifted across all of our markets, leisure demand has rebounded strongly due to pent-up demand for travel, and our best-in-class properties have been well-positioned to benefit from this trend. As a result, we are able to recommence shareholder returns by way of an interim dividend and share buyback programme.

In the UK, we have continued to see a strong recovery in activity across our portfolio particularly in London, where meetings and events enquiries are also ramping up following the previous period of inactivity due to COVID. Since restrictions across our other regions have lifted, it has been encouraging to see business demand across our markets returning.

We continue to deliver on our development pipeline and were delighted to open Grand Hotel Brioni Pula in the Period, as a Radisson Collection Hotel. It is our first hotel under our new strategic partnership with Radisson Hotel Group, with whom we maintain a strong and long-standing relationship.

Whilst macroeconomic challenges remain, our attractive portfolio, strong financial position and excellent team leave us well-placed to take advantage of the continued recovery across our regions.'

About PPHE Hotel Group

PPHE Hotel Group is an international hospitality real estate company, with a GBP1.8 billion portfolio (valued as at December 2021), of primarily prime freehold and long leasehold assets in Europe.

PPHE's business model is highly differentiated and owns, co-owns, develops, leases, operates and franchises hospitality real estate. PPHE has a well-established track record of delivering superior NAV growth through a disciplined and highly targeted approach to capital allocation and capital recycling across the entire hospitality asset value chain. The PPHE portfolio includes full-service upscale, upper upscale and lifestyle hotels in major European gateway cities and regional centres, as well as hotel, resort and campsite properties in select resort destinations. The Group's strategy is to grow both the value of the asset portfolio and the hospitality management operating platform without diluting equity shareholders.

PPHE Hotel Group benefits from having an exclusive and perpetual licence from the Radisson Hotel Group, one of the world's largest hotel groups, to develop and operate Park Plaza branded hotels and resorts in Europe, the Middle East and Africa. In addition, PPHE Hotel Group wholly owns, and operates under, the art'otel brand and its Croatian subsidiary owns, and operates under, the Arena Hotels & Apartments and Arena Campsites brands.

PPHE Hotel Group is a Guernsey registered company with shares listed on the London Stock Exchange. PPHE Hotel Group also holds a controlling ownership interest in Arena Hospitality Group, whose shares are listed on the Prime market of the Zagreb Stock Exchange.

Company websites:www.pphe.com | www.arenahospitalitygroup.com

For reservations:www.parkplaza.com | www.artotels.com | www.arenahotels.com | www.arenacampsites.com

Robert Henke

Executive Vice President of Commercial & Corporate Affairs

+31 20 717 8608

PPHE Hotel Group

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