PPHE Hotel Group has reported a 1.7% increase in EBITDA to £40.6m in the first half of 2018 and a 5% in revenue to £148.8m, compared with 2017.
EPRA NAV per share also increased by 0.8% from £24.02 per share since 31 December 2017 to £24.21 per share on 30 June 2018.
In the UK, PPHE recorded a 7% increase in UK EBITDA to £27.9m in the first six months of 2018, compared to the first half of 2017.
Revenue also increased by 4.7% to £89.6m, while occupancy increased slightly from 81.2% in the six months ended 30 June 2017 to 82.7% for 2018.
However, revenue per available room fell by nearly 4% to £112 from £116.4.
PPHE said this was due to a very strong first half in 2017 due to the demand generated by the devaluation in sterling and supply growth of new hotel rooms surpassing demand this year.
Currently PPHE, which has a £1.6bn portfolio of prime freehold and long leasehold assets, is weighted 55% in the UK and 45% in mainland Europe.
The firm is also targeting entry into the FTSE Indices and transferred its shares in July from a Standard Listing to a Premium Listing with the UK Listing Authority to make the company more attractive to a wider group of investors.
“It is our mission to end up in the index in a FTSE index, but at this point in time we do not need to issue new shares or new capital we have approximately £160m of excess cash in our balance sheet,” Daniel Kos, PPHE’s chief financial officer, said.
“Net leverage is 28.9% so we have enough headroom in terms of getting funding and the whole pipeline as we currently envisage it is funded and we have cash for acquisitions.”
He added that the firm had prepared itself for Brexit, having secured all the funding required for its current portfolio in the UK with a maturity profile of on average 8.4 years, and has also taken the step of taking back control of all its housekeeping staff at its UK hotels, basically insourcing them to make sure it has the staff available.
“In term of our growth strategy as long as London keeps performing the way it is it is attractive for us to invest in. It really depends on what kind of Brexit we will have and what impact that will have on inflow of demand,” he said.
PPHE, meanwhile, is continuing to pursue its expansion plans in the UK and Europe, but is facing stiff competition for new sites from private equity and pension funds despite Brexit looming ever nearer.
The firm behind the Art’otel, Park Plaza in Europe, the Middle East and Africa, and Arena Hotels, which was reporting its latest half year financial results, is looking at cities such as Barcelona, Vienna and Rome as well as further expansion in London, Kos said.
“We’re looking at a lot of deals, but we’ve dropped a lot of them as well because of the price. Pricing is just getting into a level that we cannot accept from a yield profile.”
He added: “If the yield doesn’t make sense we won’t do it. Yield profile is very important for us as every asset we look at we like to own it and we like development potential.
“We want to end up with an asset that when operational gives us a steady cash return, but also value appreciation over the long term.
“We see that there’s a lot of money out there in the market real estate private equity funds, pension fund money and they drive down the yield and drive up the price quite a bit, but nevertheless we have an exciting pipeline.”
This pipeline includes the £150m 340,00 sq ft Art’otel in Hoxton, on which construction has started and is expected to be ready by 2022, and the management contract for the Art’oel at Battersea Power Station due around the same time, as well as an ongoing refurbishment programme.
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