PPHE Hotel Group revenue rises after consolidation of Croatia operations

Revenue increased for PPHE Hotel Group in 2016, with a stronger second half for the year due to consolidation of its Croatian operations and following a softer first half due to the Brexit vote and several terrorist attacks.

Results for calendar year 2016 are anticipated to be in line with expectations.

President and chief executive Boris Ivesha said: “Whilst trading in the early part of the year was softer than expected in some of our markets in the build up to the Brexit referendum and in the wake of various terrorist attacks, the second half of the year was more encouraging. Improved market conditions have continued into 2017 and we expect to make further progress, particularly as we benefit from our new room inventory in Nuremberg and London."

Revenue increased approximately 27% year-on-year for 2016 or 7% on a like-for-like basis, largely due to the consolidation of the Croatian operation, a “solid performance” of UK, Germany and Hungary in the second half of the year, along with the openings of new hotels and a currency exchange rate benefit due to the weak pound against the euro and dollar.

LFL revenue per available room rose 7.2% to £85.4m, which was achieved through an 8.6% increase in average room rate to £110.9, while occupancy was flat at 77%, compared to the previous year.

Whereas reported revenue per available room fell 8.2% to £84.4m and the average room rate increased 1.8% to £111, while occupancy decreased by 827 basis points to 76%.

The fall in occupancy is a result of the consolidation of the Croatian operation, which is heavily weighted towards the summer.

The company bought its its joint venture partner in Croatia and now holds 77.1% in Arenaturist following the transfer of its German and Hungarian operations.

PPHE Hotel Group will pay a special dividend of £1 per share, returning £42.2m to shareholders and an interim dividend was paid of 10p each.

The extension of Park Plaza London Riverbank has now been completed and following a partial opening in November 2016 of Park Plaza London Waterloo, the company is preparing for its full opening by the end of the first quarter of 2017.

Plans are being finalised to start renovations of Park Plaza hotels in Amsterdam, Utrecht and London.

Ivesha said: "2016 has truly been a year of transition for our group, with several new hotel openings and soft openings, debt restructuring, the acquisition of a controlling interest in our Croatian operation and the transfer of our Germany and Hungary assets under our Croatian operation which will enable us to create further shareholder value."

Shares in PPHE Hotel Group were up 0.82% to 740p at 1200 GMT.