Valuation: New light on huge discount to NAV More active asset management, as signalled in the IMS, promises welcome recognition of the company’s riches and consequent possible narrowing of a discount to NAV, which is surely excessive at over 50%. Indeed, PPHE owns trophy assets in strong gateway cities such as London and Amsterdam, the lure of which is enduring and should not be underestimated. Operationally, the company is also inexpensive with a prospective EV/EBITDA of just 7x, which is well below that of most of its peers.
The last RNS is a decent read. http://www.investegate.co.uk/Article.aspx?id=201208150700050228K
22 Aug '12
Commenting on the results, Boris Ivesha, President and Chief Executive Officer, PPHE Hotel Group said: 'I am pleased to report a strong set of results for the first half of 2012, with total revenue and EBITDA up, as we benefited from an improved average room rate and increased hotel ownership. PPHE Hotel Group's strong presence in London has been the main contributor to the Group's operational growth and we have seen some benefits from this summer's various celebrations, festivals and sport events. We remain highly focused on improving our profitability through growing our top-line, managing our expenses and increasing guest satisfaction.'
22 Aug '12
Valuation: Huge discount to NAV just gets bigger However stubborn, the discount to net assets (56% to June 2012 NAV per share of €6.07) looks ripe for correction after acceleration in H1 (c 40% in March to December 2011 NAV). In addition, PPHE is inexpensive in terms of the key EV/EBITDA indicator (under 8x prospective) compared with European branded peers such as Meliá and NH Hoteles (c 9x). Discount to the likes of Marriott and Starwood (c 12x) is justified, given PPHE’s record, its scale of net debt (albeit well within facility) and the presence of effectively a majority shareholder with a history of related-party transactions.
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