Pphe Hotel Share Discussion Threads

[trytotakeiteasy] 14/12/2016 11:37

Catsick - well we shall see. In my view, the special dividend was mistake and they should have reduced debt instead. Final quarter is strongest for trading typically so will be interesting to see how PPHE fares.

[catsick] 14/12/2016 03:12

Just got back from a week in London at short notice, all the hotels were full with ramped up rates , trading is definitely very good at all levels, it seems the weak pound has really boosted occupancy, I was paying 50 pct more than usual. Edison have just put out a bullish report on pph, they think nav is 18.5 with upside after the new openings are done, next move is going to be higher ...

[trytotakeiteasy] 12/12/2016 08:28

Sogoesit - not sure what to make of Arenaturist deal. It is quite a chunky figure to spend.

Should be a trading update soon. I have called this wrong so far as I thought the shares offered good value at this level. However, delayed openings of the two London hotels and weak trading in the first half have hit sentiment. A recent update also said that there was oversupply of London hotels.

[sogoesit] 09/12/2016 10:15

Park Royal only available from March 1 2017.

London "Waterloo" is on other side of the tracks to the river; open, but pricing cheaper than the River "side" hotels at £185/night/standard room vs £205-£233 for next weekend.

Seems Arenaturist is now becoming an asset holder focus.

[trytotakeiteasy] 08/12/2016 15:01

yes hotel opening were delayed. Hence the earnings downgrade for 2016 by analysts. Both hotels are due to open this year with Waterloo now open and Park Royal not appearing to be open yet.

[sogoesit] 08/12/2016 08:39

Will do some research. If I recall they said Autumn.

[sogoesit] 31/10/2016 09:10

Indeed, gross revenue for 9 months up 28%.
Still fair amount of "dynamics" in hotel assets and Arenaturist... Will it ever settle down?
Overall much better than last quarter's update.

[trytotakeiteasy] 31/10/2016 08:19

At first glance this looks like a reasonable update to me.... like-for-like RevPar up strongly in the third quarter. Looks like a bounce back from the weak first half..all in all should be well placed going forward..

[trytotakeiteasy] 26/10/2016 15:59

Thanks Sogoesit.. looks like reasonably strong demand... I imagine they will do very well in the Xmas holiday season given two new London hotels open and the demand for people to have Xmas and New Year's in London given the weak pound... however, Park Plaza Waterloo only looks set to open 1 January when I tried to make a booking.... so that may be delayed even further as I thought it was meant to open later this year..

[sogoesit] 26/10/2016 11:46

Yep, PP Riverbank appears to be a bit of an odd ball on that side of the river between Vauxhall & Westminster bridges. However they do price accordingly:

Booking today for 3 nights (27/10-30/10) for 2 people standard rates per night as follows:
Westminster Bridge: £414(was an hour ago; now sold out)
Riverbank: £200.67
County Hall: £312.32
Plaza on the River (next to Riverbank also at 18 Albert Embankment): £279
Victoria: £164
Sherlock Holmes: 169.87

Riverbank has 73%+ Very Good or Excellent on TripAdvisor with 9% Poor or Terrible.

[trytotakeiteasy] 25/10/2016 15:56

Sogoesit - I think you are broadly right. PPHE's hotel near Baker Street and the one at Victoria in London are both ideal for middle-market tourism. The Westminster one would also be great for tourists. Not sure about Park Plaza Riverbank as that appears to mainly be for business and isn't close to a tube station. However, the new hotel set to be opened at Waterloo should be well placed for tourists.

As far as I cant tell the Park Plaza hotels aren't exorbitantly priced for London hotels and offer fairly decent rooms and facilities.

Anyone interested in the scuttlebutt approach could ring all their London hotels to see how trading is going... but we should find out with the next trading update in early November in any event..

[sogoesit] 25/10/2016 15:35

I think PPH is more "upper mid-market" positioned.
There was a guy from the Ritz Hotel on a news channel yesterday who was saying that sales in their restaurants and teas at the Ritz were "booming". Asked about the hotel itself he didn't wish to be drawn just saying "Anyone who can afford our room prices would not be concerned by a (20%) change in the currency". Lol
I interpret that to mean PPH should be a beneficiary both in the UK (higher occupancy) due to GBP/EUR/USD and Europe with accounts in GBP.

We shall see... there should be a trading update or management statement sometime early November as trytotakeiteasy says.

[trytotakeiteasy] 22/10/2016 21:23

Burberry benefiting from stronger UK tourism...not sure if PPHE has the high-end hotels that will benefit from more luxury shopping though..

[catsick] 20/10/2016 12:30

Will be interesting to hear how they are doing, last update was lukewarm, further falls in the pound should have the hotels bursting at the seams ...I think we have to wait another 12 months to see how the weak pound plays out and new hotel openings add to the bottom line, this has been a great run the past 4 years , it has almost paid back the purchase price in divs over that time ...

[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.