28th Aug 2025 09:02
(Alliance News) - PPHE Hotel Group Ltd shares fell on Thursday as it reported a wider loss despite higher revenue, while the hotelier lowered full-year earnings guidance.
Shares in PPHE sank 10% to 1,466.00 pence in London on Thursday morning. The stock remains up 7.4% over the past year.
Amsterdam-based operator of Park Plaza and Art'otel hotels, among other brands, said total revenue increased 4.7% to GBP199.9 million in the six months to the end of June from GBP191.0 million a year before.
Despite this, pretax loss widened to GBP10.3 million from GBP1.3 million.
Operating expenses climbed 8.2% to GBP153.1 million from GBP141.5 million, while financial expenses grew 18% to GBP22.6 million from GBP19.3 million.
PPHE said margins were hurt by changes in room rates and cost inflation. However, it said efficiency initiatives have largely offset wage and social security cost inflation.
The company declared an unchanged interim dividend of 17 pence per share.
Like-for-like revenue rose 1.3% to GBP193.3 million from GBP191.0 million, while reported revenue per available room rose 1.4% to GBP109.3 from GBP107.8.
Like-for-like RevPAR rose 1.1% to GBP109.0 from GBP107.8 amid softer average room rates but improved occupancy.
PPHE expects its full-year earnings before interest, tax, depreciation and amortisation to be "similar" to that of 2024.
Half-year Ebitda was down 5.7% to GBP45.5 million from GBP48.3 million. PPHE reported Ebitda of GBP136.5 million in 2024.
At the time of the publication of its 2024 results in February, PPHE said it expected Ebitda to rise in 2025, while the analyst consensus was for Ebitda to increase to between GBP147.3 million and GBP158.6 million.
The company added that it expects recently opened pipeline projects to add at least GBP25 million of incremental Ebitda upon the stabilisation of trading.
It said it is "actively managing" the timeline of the developments to "deliver the maximum longer-term financial proposition".
Looking further ahead, PPHE said it "remains excited" about the potential of newly opened properties and the building development pipeline.
However, it said it is mindful of cost factors outside of its immediate control, which could impact 2026 and beyond, including changes to VAT on hotels in the Netherlands, which could see rates move to 21% from 9% in January, as well as business rates in the UK.
"In the first half, we increased our occupancy levels whilst proactively managing room rate in an industry which continues to be impacted by the volatile macroeconomic and geopolitical environment," said Co-Chief Executive Officer Greg Hegarty.
"During the first half we have made strong progress on building our future development pipeline further, notably with the acquisition of our first property in the City of London made through a subsidiary of our European Hospitality Fund, and the acquisition of the freehold of our current hotel and development site located at Park Royal in London."
By Michael Hennessey, Alliance News reporter
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