PPHE Hotel Group - 2021 Annual Results

Well positioned for long-term growth, underpinned by attractive pipeline, strong customer demand and operational progress.

PPHE Hotel Group, which together with its subsidiaries (the “Group”) is an international hospitality real estate group, is pleased to announce its audited annual results for the financial year ended 31 December 2021.

Boris Ivesha, President and Chief Executive Officer PPHE Hotel Group said: “We are very pleased to have delivered strong progress against our long-term strategy during what has been a year of continued challenging trading conditions. In the year, our financial performance and position have improved, we have expanded into the new markets of Austria and Italy, and have made excellent progress with the projects in our development pipeline."

"Restrictions in the majority of our operating markets have now been lifted and, as has previously been the case, the quality and depth of the Group’s portfolio have driven market outperformance when restrictions were eased particularly in the UK and in Croatia during the summer season."

"Whilst a number of macroeconomic pressures are likely to remain for the near term, our attractive portfolio, strong financial position and excellent team, provide confidence that the strong customer demand for our leading proposition will enable the Group to capitalise on both short-term demand and long-term growth opportunities to deliver for all stakeholders.”

Financial summary

• Total revenue increased by 38.9% to £141.4 million (2020: £101.8 million), representing a recovery to 39.5% of 2019 levels, achieved in spite of multiple periods of restriction across our operating markets. In Croatia, the third quarter revenue was approximately 93% of the revenue generated during the same period in 2019.
• Recovery across all key operating metrics, with RevPAR up 22.1% year-on-year to £35.9 (2020: £29.4), average room rate up 11.4% to £117.0 (2020: £105.1) to represent 91.1% of 2019 levels. Occupancy improved to 30.7% (2020: 28.0%).
• Reported EBITDA increased to £25.1 million (2020: loss of £10.1m) of which £39.1 million was generated in H2 2021, including a one-off benefit in the form of government subsidies.
• Normalised profit before tax improved to £(47.5) million (2020: £(89.8) million).
• The Group’s financial position is strong, with a total consolidated cash balance of £136.8 million at 31 December 2021 (2020: £114.2 million) and access to available facilities of £76.8 million.
• EPRA NRV per share remained flat at £22.15 (2020: £22.08)
• Adjusted EPRA earnings per share improved to a loss of (44) pence (2020: (123) pence).
• The Board is not proposing a dividend in respect of the financial year ended 31 December 2021. However, the Board appreciates the importance of dividends and will continue to review any future dividend payments in line with the recovery trajectory and the business returning to cash flow positive trading.

Operational and corporate highlights

• The Group’s proactive commercial strategy drove revenue generation during periods of low demand, with properties operating as UK government quarantine hotels for part of the year and Park Plaza Westminster Bridge London chosen as the exclusive host hotel for the 2021 Wimbledon Championships.
• Strategic expansion into the important Austrian and Italian markets through the acquisition of a 144-room hotel in Nassfeld, Austria and a 101-room property in the centre of Rome, Italy.
• Continued progress against £200m+ repositioning and development pipeline, providing a strong foundation for long-term sustainable growth. Highlights include:
  • The construction of the new art’otel London Hoxton, expected to complete by 2024 continued to plan with structural works completed up to the 17th floor (out of 27);
  • The two-year redevelopment of Grand Hotel Brioni in Pula, Croatia, is in its final stages and expected to relaunch for the 2022 summer season;
  • Work began on the conversion of the Group’s property in the centre of Zagreb, its first in the capital city, to a luxury 115-room art’otel which is expected to open H1 2023;
  • art’otel London Battersea Power Station, which will be operated by the Group under a management agreement, is set to open in the second half of 2022.
• Long-term partnership with Clal announced this year, underpinning the Group’s NRV, has unlocked £113.7m of equity to give the Group further financial headroom to support recovery and capitalise on growth opportunities.

Post-Period end

• The beginning of FY22 saw continued restrictions across the Group’s operating markets due to the Omicron variant, however, in line with previous trends, the Group saw an immediate increase in new bookings following the lifting of measures, starting with the UK region which is the Group’s most important market. This momentum continued throughout February, demonstrating the strong customer demand for the Group’s high-quality, prime-located properties and the Group’s transient demand is currently at 65% of 2019 levels.

Key financial statistics

Publication of Annual Report & Accounts and Notice of Annual General Meeting

PPHE Hotel Group Limited will publish later today its annual report and accounts for the financial year ended 31 December 2021 (the "Annual Report"), including the Notice of Annual General Meeting. These documents shall be available today on the Company's website www.pphe.com.

The Company's Annual General Meeting will be held on 17 May 2022 at 12 noon at 1st Floor, Elizabeth House, Les Ruettes Brayes, St Peter Port, Guernsey GY1 1EW.

Pursuant to UK Listing Rule 9.6.1, copies of the Annual Report and Notice of the Annual General Meeting shall be submitted later today to the National Storage Mechanism and will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism

In accordance with Disclosure Guidance and Transparency Rule 6.3.5, the information in the attached Appendix consisting of a Directors' Responsibility Statement, principal risks and uncertainties and related party transactions has been extracted unedited from the Annual Report & Accounts for the financial year ended 31 December 2021. This material is not a substitute for reading the full Annual Report.

This announcement contains inside information. The person responsible for arranging the release of this announcement on behalf of the Company is Daniel Kos, Chief Financial Officer & Executive Director.

About PPHE Hotel Group

PPHE Hotel Group is an international hospitality real estate company, with a £2.2 billion portfolio, valued as at December 2023 by Savills and Zagreb nekretnine Ltd (ZANE), of primarily prime freehold and long leasehold assets in Europe.

Through its subsidiaries, jointly controlled entities and associates it owns, co-owns, develops, leases, operates and franchises hospitality real estate. Its portfolio includes full-service upscale, upper upscale and lifestyle hotels in major gateway cities and regional centres, as well as hotel, resort and campsite properties in select resort destinations. The Group's strategy is to grow its portfolio of core upper upscale city centre hotels, leisure and outdoor hospitality and hospitality management platform.

PPHE Hotel Group benefits from having an exclusive and perpetual licence from the Radisson Hotel Group, one of the world's largest hotel groups, to develop and operate Park Plaza® branded hotels and resorts in Europe, the Middle East and Africa. In addition, PPHE Hotel Group wholly owns, and operates under, the art'otel® brand and its Croatian subsidiary owns, and operates under, the Arena Hotels & Apartments® and Arena Campsites® brands.

PPHE Hotel Group is a Guernsey registered company with shares listed on the London Stock Exchange. PPHE Hotel Group also holds a controlling ownership interest in Arena Hospitality Group, whose shares are listed on the Prime market of the Zagreb Stock Exchange.

Company websites: www.pphe.com | www.arenahospitalitygroup.com

For reservations: www.parkplaza.com | www.artotel.com | www.radissonhotels.com | www.arenahotels.com | www.arenacampsites.com

Robert Henke
Executive Vice President of Commercial & Corporate Affairs
+31 20 717 8608
PPHE Hotel Group

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