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PPH Pphe Hotel Group Limited

1,315.00
-5.00 (-0.38%)
14 Jun 2024 - Closed
Delayed by 15 minutes
Pphe Hotel Investors - PPH

Pphe Hotel Investors - PPH

Share Name Share Symbol Market Stock Type
Pphe Hotel Group Limited PPH London Ordinary Share
  Price Change Price Change % Share Price Last Trade
-5.00 -0.38% 1,315.00 16:35:11
Open Price Low Price High Price Close Price Previous Close
1,320.00 1,310.00 1,325.00 1,315.00 1,320.00
more quote information »
Industry Sector
TRAVEL & LEISURE

Top Investor Posts

Top Posts
Posted at 29/2/2024 10:52 by rolo7
investor meets presentation at 11am
Posted at 19/7/2023 10:52 by catabrit
I wouldn’t be surprised if these are taken private via a management buyout. I think it’s quite a hard sell to public investors to invest in a listed hotel / real estate company that pays such a paltry yield. I know it shouldn’t matter but for listed real estate it does.

There’s clearly some value here and we know that seldom lasts long. Either it turns out to be a mirage; or it finally catches a bid; or it’s arbitraged away via a take private or merger.
Posted at 28/5/2019 16:36 by sharesoc
Just to let you know, PPHE Hotel Group present at our Manchester growth company seminar on the 4th June, which may be of interest to current shareholders and potential investors. More details here:
Posted at 22/5/2019 12:17 by sharesoc
PPHE Hotel Group present at our Manchester growth company seminar on the 4th June, which may be of interest to current shareholders and potential investors. More details here:
Posted at 29/6/2018 15:53 by sogoesit
Edison Upgrades today, indicative £24/share NAV:



"PPHE has accompanied news of its proposed transfer to a premium listing with a significant increase in market valuations of its properties (up c £140m since last reported). This accentuates already substantial hidden reserves, implying fair value c £24/share. Value creation apart, this should boost its ability to leverage on its assets for future projects. Even given current share price strength (up almost a third since March), PPHE’s rating reflects neither this asset backing nor excess liquidity (c £290m cash equivalents at end 2017), which highlights its reinvestment potential.
Premium listing
Travel & leisure
29 June 2018
Price
1,430p
Market cap
£605m
Net bank debt (£m) at December 2017
408.1
Shares in issue
42.3m
Free float
23%
Code
PPH
Primary exchange
LSE


Business description
PPHE Hotel Group (formerly Park Plaza Hotels) is an integrated owner and operator of four-star, boutique and deluxe hotels in gateway cities, regional centres and select resort destinations, predominantly in Europe.
Analysts
Richard Finch
+44 (0)20 3077 5700
Paul Hickman
+44 (0)20 3681 2501
consumer@edisongroup.com
Edison profile page
PPHE Hotel Group is a research client of Edison Investment Research Limited

Following its admission to the Official List in 2011, PPHE proposes to move from a standard to a premium listing by the end of July, subject to financial authority approval. Besides validating the company’s quality, this should improve liquidity by providing exposure to a larger investor base and raise its trading profile.
As part of the proposed transfer, PPHE sought independent valuation of its UK and Netherlands estate (15 properties, c 80% of group asset value). This showed a surplus of £639m over book value at April, against £500m+ indicated by refinancings over the previous two years (see 2017 Annual Report). NAV computation should also take account of £56m higher property book value at April, driven by the Hoxton addition. This gives a total c £200m boost to valuations (£139m extra from fair value and £56m from expansion). This would be yet higher if Croatia were included (£26m surplus of current value of investment in Arena over book value at December). Fair value adjustment is thus c £16 (£639m+£56m/42.3m shares) to reported 812p NAV, hence indicative c £24 NAV".
Posted at 16/1/2017 12:02 by trytotakeiteasy
Good to see a share price increase ahead of the full year trading update...

I was in the area and so had a look at Westminster Bridge Park Plaza and County Hall Park Plaza from the outside. I also saw an estate agent selling was selling a buy to let hotel room in the former for £300k. From what I recall Westminster Bridge used outside room investors to get the hotel off the ground. A number defaulted and as such the company kept their deposits.

General thoughts on the hotels were that they are a grade above say a Premier Inn or a Travelodge. For example, some of the Park Plaza's have swimming pools. The new Park Plaza at Waterloo seems to have fairly high hotel room rates so should be a success. However, the Royal Oak hotel doesn't appear to have opened by the end of 2016 as planned.

What was particularly notable from my quick look at the hotels is that they are very well located for the tourist trade around Westminster and the South Bank.
Posted at 15/1/2017 21:12 by sogoesit
shooting_star:
1. Its only at one hotel as far as I know, on the South Bank. A year ago I was offered a couple on a re-sale by an estate agent. It didn't look too great an investment, imo, so that means PPH were on the favourable side of the investment.
They report on an "owned rooms" basis so the asset will be excluded but they charge management fees to the room asset holder. If I recall the gross yield on the ones I was offered was about 5.5%.
There's a financial liability of £134m in the balance sheet for this "financing".

Here's the Note to the accounts from the 2015 Annual Report:

4. Financial liability in respect of Income Units sold to private investors:
In 2010, the construction of Park Plaza Westminster Bridge London was completed and the hotel opened to paying customers. Out of 1,019 rooms, 535 rooms (‘Income Units’) were sold to private investors under a 999-year lease. The sales transactions are accounted for as an investment scheme in which the investors, in return for the upfront consideration paid for the Income Units, receive 999 years of net income from a specific revenue- generating portion of an asset (contractual right to a stream of future cash flows). The amounts received upfront are accounted for as a floating-rate financial liability and are being recognised as income over the term of the lease (i.e. 999 years). Changes in future estimated cash flows from the Income Units are recognised in the period in which they occur.
On completion of each sale, the Company, through a wholly owned subsidiary, Marlbray Limited (‘MarlbrayR17;), entered into income swap agreements for five years with the private investors. The income swap agreements included an obligation of the investors to assign the right to receive the net income derived from the rooms to Marlbray and an undertaking by Marlbray to pay to the investors an annual rent guarantee of approximately 6% of the purchase price for a five-year period commencing from the date of the completion of the sale. The income swap has been accounted for as a derivative. In 2014 and 2015, Malbray entered into 56 income swap agreements for a further 5 years from the expiry date.
The entire hotel is accounted for at cost less accumulated depreciation.
The replacement costs for the sold rooms are fully reimbursed by the investors. An amount of 4% of revenues is paid by the investors on an annual basis (‘FF&E reserves’) and is accounted for in profit and loss. The difference between the actual depreciation cost and the FF&E reserve is a timing difference which is recorded on the statement of financial position as a receivable or liability to the investor in each respective year.

2. Sterling refinance last year was at 3.248% Fixed for 10 years.
Euro financing, for Dutch Hotels, was at 2.165% Fixed also for 10 years.
There were also a 10 year (Park Plaza £87m Fixed at 3.41%) and a 12 year (Westminster Bridge of £182m; £172m Fixed at 3.785%) refinancings.
These fixed portion refinancings total about £560m (GBP150m + Euro182m + £87 + £172m) and, by my calcs, are therefore about 78% of the outstanding long term debt.
Posted at 13/1/2017 08:35 by shooting_star
to holders here..I am thinking to invest in PPH having only come across it recently. I wondered if anyone could share thoughts on a couple of things:

1. what is the significance of the company having sold some of its hotel rooms to outside investors around the time of the GFC? I believe only at Westminster? but possibly other sites? I read in a hardman note that these are income units in the balance sheet?

I presume the company owns a majority of the rooms at Westminster, but private investors hold some of them?

And the adjusted NAV that makes this stock look cheap on asset basis crucially EXCLUDES the rooms sold to private investors

2. With the balance sheet heavily indebted (over 500m debt at H1) what is the sensitivity of earnings and the valuation to potentially rising interest rates? It seems like they refinanced much of their debt in 2016 and achieved Long term fixed rates of around 3.5%..so rising rates would not have much of a direct impact?

thanks for any thoughts in advance!
Posted at 02/9/2016 16:30 by sogoesit
Indeed tryto; agree the liquidation value concept.

(I don't know what the intangibles are in the balance sheet but "Goodwill" can have value. In PPH's case I can think of the Carlson relationship as an intangible with value. A hotel buyer would value that imv.).

Owners of property, as we can see in London, have an underlying problem getting yield (going concern returns) from high capital value areas. And less popular areas, like Leeds, probably earn better yields. For those kinds of investors we hope to see capital growth realised but only in a sale; difficult in illiquid property. Unfortunately, we don't see the capital growth reflected, yet, with PPH. The low reflection of value may also have something to do with the 47% "lock-up" shareholding of the owners/management albeit they treat shareholders well imv.
Posted at 01/9/2016 08:52 by sogoesit
On the balance sheet, tryto, I just took the Total Assets of £1,325m leaving the £25.343m of Intangibles in there (i.e. £0.55/share). Less the £986m Total Liabilities to give the £8/share approximation. Then approximating to 750p as "fairly priced".
I didn't account for the dividend as you rightly point out.
As shanklin said, but not discounting 20% for tax, the Fair Value view is then additional to that so with your other amendments £17 is a better quick view than £18.5 (i.e. less £0.55 for the Intangibles and £1.00 for the dividend).
I hold these as an "asset play"; so waiting for the day when the market, or "someone" (catalyst), values them on that basis.
I have no idea, frankly, how other investors value these but "the market" appears to just go by the raw balance sheet on its day-to-day "low" trading volume basis.
Given the complications of the Croatian deal this half and digging deep into the accounts it would be more time consuming to assess... an exercise I may pursue but things will have changed, hopefully for the better, as they complete all the development work.

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