Pphe Hotel Share Discussion Threads

[trytotakeiteasy] 14/10/2016 21:28

Will be interesting to see how November's trading update reads. I would of thought that the fall in the pound would have boosted London tourism:

[sogoesit] 15/9/2016 09:01

Couple of recent research notes (free if you register):

[trytotakeiteasy] 05/9/2016 10:26

well the reality is that this isn't valued as a property company and on the basis of assets. I think when the London/UK side does well then the shares will do well... maybe we will see a pickup in H2 but who knows... certainly H1 was weak

[sogoesit] 02/9/2016 16:30

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.

[trytotakeiteasy] 02/9/2016 09:37

Sogoesit - Yes I think the principal is what would you get if you liquidated the business now. So you cut out goodwill as no one will give you anything for that.

Of course if you did liquidate the business there would be hefty capital gains taxes. But the task is just to get an idea of what the assets are worth in the market and what the tangible equity book value is for the business (i.e. taking off debt).

One thing I haven't looked into is that if the equity market book value is so high why are profits so low relative to the figure. Maybe cost of developing new hotels etc. Or could just signal that this is a low return on capital business.

[sogoesit] 01/9/2016 08:52

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.

[trytotakeiteasy] 01/9/2016 00:12

Sogoesit - not sure you took out the special dividend payment (now paid out) from that figure and the goodwill on the balance sheet. What you want is a tangible fair market equity value net of the special dividend and the Goodwill. I get the figure at around £17 a share.

[sogoesit] 31/8/2016 10:13

Indeed, adding £445m gives an additional £10.5/share plus £8 makes a Total Net FV of £18.5/share.
My one year target is £10.5 - £12.5 for the share price assuming all holds up in London during the "interim Brexit" years.

[shanklin] 31/8/2016 09:53

If you take PPH's Fair Value number as more accurately reflecting reality then, even if you deduct 20% tax from the £445m uplift from the current B/S book value, PPH is at a very significant discount to their view of TBV.

[sogoesit] 31/8/2016 09:19

Sure, Shares probably confused the Total Asset value with Net Asset Value!
That's financial journalists for ya!

Total Property Assets on re-valuation at new Book Value now stand at about £25/share (from £21 on 31-12-2015) and, at Fair Value, at £35/share to my reading.

Problem is the debt and liabilities bring the NAV down to about £8/share.
This company always been "over-indebted" imv. Still, one day they might reduce it!!

Germany seems to have performed poorly as well.

So, at 750p it's probably "fairly priced" for now imv.
I last accumulated at 785'ish.

Good luck.

[trytotakeiteasy] 31/8/2016 08:20

so much for Shares magazine and their hyping up of the prospects for the group

[sogoesit] 23/8/2016 11:30

catsick : your inferred tourist spending boom:



thanks snadgey. I should read the RNS!

[snadgey] 22/8/2016 20:44

Interims announced for 31st Aug.

[sogoesit] 22/8/2016 10:42

Based on last year should be reporting half-year results by end of week.

[catsick] 17/8/2016 00:44

Hearing lots of positive comments about london hotels and the influx of bookings after gbp collapse, having a huge portfolio of london rooms is the place to be

[sogoesit] 12/8/2016 10:45

Payday today : 100p
Re-invested, quiet market here.
All done by pm. Lucky, little price movement... so quiet.

[sogoesit] 05/8/2016 17:41

Here is the article mentioning £20, quoted from Shares Mag of 28 July:

QUOTE
Very cheap hotel play with yield and major asset support

We highlighted PPHE Hotel (PPH) in our previous Mr Market article in March 2016 at 636p. It is now 750p (plus anyone on shareholder register on 22 July 2016 will also get a 100p special dividend in August). PPHE is the owner, developer and operator of Park Plaza hotels in Europe. In total, the group has a portfolio of 38 hotels, with a focus on London (where it has five hotels that generate nearly 70% of group profit).

Before year-end we expect new hotels to appear at Waterloo and Park Royal as well as a material extension to the Park Plaza Riverbank, near the London Eye. These will likely benefit from overseas visitors drawn to the UK by weaker sterling post the Brexit vote.

The rest of the group’s profit is derived from Croatia (a safe haven in the area relative to Turkey) and other European hotels, particularly in Holland, which will benefit from relative euro strength on translation.

The new London hotel stock (c. 1,000 additional rooms) look set to drive a material improvement in PPHE’s profitability in 2017 to the extent that the shares trade on sub 8x FY17E whilst also yielding 2.7%.

The group’s hotel assets are set to be revalued by half year results in September. We think the net asset value could be as high as £20 per share versus the current share price of 750p.
UNQUOTE

[sogoesit] 05/8/2016 17:36

Started accumulating, pre-investing my dividends, at 798.75 today.
Maybe Interims end August?
I did see a mention of £20 in Shares magazine last week; but seems a mighty upgrade if so. Anyway, would be happy with £10-£12 in near future.

[kirkthrust] 29/7/2016 21:01

The next commentary from the company will now be early September
Attention will now be towards fy17 when with another 1000 hotel rooms in London...see the evening standard today for comments on hordes of foreigners drawn in by the weak sterling effect.. the shares will be on sub9x and yielding over 2.5pc too...croatia will be a very shrewd consolidation and the complete Nav will be revealed then too..I am hearing it could be £20 a share...

[snadgey] 25/7/2016 20:52

If this £1 div is as a result of cash generated from refinancing deal, then not sure why the share price has dropped? This should be cash the company did not have prior to this deal?

[sogoesit] 20/7/2016 10:44

100p goes ex-dividend tomorrow, 21/07.

[sogoesit] 13/7/2016 13:49

Yes, agreed, good summary catsick.

[catsick] 13/7/2016 13:35

Yes , I am kicking myself a bit for not adding when this sold off , brexit and weak gbp should have made this go up rather than down, they own a lot of euro assets and all the london stuff should be able to increase rates as the cheaoer pound makes london a cheaper trip for overseas, and now this special div underlines the shareholder friendly management with a lot of skin in the game ...

[shanklin] 13/7/2016 13:30

Blimey, was looking to add earlier but didn't. At least I added near the bottom.