(Alliance News) - PPHE Hotel Group Ltd on Thursday reported a swing to annual profit on a bounce in travel demand as Covid-19 curbs eased.
The company also reported plans to establish a Europe-focused hospitality real estate fund. Shares in the company were up 3.1% at 1,155.00 pence each in London on Thursday afternoon.
The real estate firm, which operates hotels and resorts, said revenue in 2022 amounted to GBP330.1 million, more than doubling from GBP141.4 million. The result topped market expectations, it said.
"Demand for leisure and corporate travel and meetings and events continued to strengthen across all markets, despite ongoing macroeconomic challenges globally," PPHE said.
It swung to a pretax profit of GBP8.3 million, from a GBP47.5 million loss.
It reinstated its dividend last year, with a 3 pence per share interim payout. PPHE declared a 12p final dividend, taking its yearly total to 15p.
Looking to 2023, it said "booking momentum" continued in the first two months of the year. It expects revenue growth in 2023.
In addition, the company said it is in "advanced discussions" with a possible cornerstone investor as it eyes launching a European Hospitality Real Estate Fund of up to EUR250 million equity.
"It is the intention of PPHE that the fund will launch with the initial contribution of its existing asset in Rome and an equity commitment of up to EUR75 million from a cornerstone investor (with an upper limit of 49% participation). Launch would also be subject to regulatory approval," PPHE said.
"The fund would enable the group to further accelerate its strategy of identifying, acquiring and developing attractive hotel assets across a range of key European markets. This is consistent with PPHE's longstanding approach to building shareholder value through the careful stewardship of its own balance sheet and partnership with third party capital providers. Investors in the fund would be able to benefit from and tap into PPHE's integrated owner-operator model, driving optimal operating performance through enhanced access to world recognised brands as well as an uplift in real estate value."
PPHE plans to participate for an amount of up to EUR50 million in cash or assets. It intends for its PPHE Rome asset to be contributed to the fund as a seed asset. The unit is currently under refurbishment.
By Eric Cunha, Alliance News news editor
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