We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for real-time alerts, custom portfolio, and market movers
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Pphe Hotel Group Limited | LSE:PPH | London | Ordinary Share | GG00B1Z5FH87 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -5.00 | -0.34% | 1,470.00 | 1,460.00 | 1,470.00 | 1,475.00 | 1,465.00 | 1,465.00 | 5,427 | 15:18:15 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Hotels And Motels | 414.6M | 22.42M | 0.5291 | 27.78 | 622.74M |
From May 2019 to May 2024
TIDMPPH
RNS Number : 1561G
PPHE Hotel Group Limited
28 February 2018
28 February 2018
("PPHE Hotel Group" or the "Company")
Audited Annual Results for the year ended 31 December 2017
Publication of Annual Report & Accounts and Notice of Annual General Meeting
PPHE Hotel Group Limited, an international hospitality company, is pleased to announce its audited annual results for the year ended 31 December 2017.
Financial Summary
-- Reported total revenue increased by 19.3% to GBP325.1 million (2016: GBP272.5 million), mainly due to an increase in hotel room inventory following the full opening of two new hotels in London and the first full year contribution of Park Plaza Nuremberg. On a like-for-like(1) basis, total revenue increased by 10.3%.
-- Reported EBITDA increased by 14.0% to GBP107.3 million (2016: GBP94.1 million) and on a like-for-like(1) basis, EBITDA improved by 8.7%. Both reported and like-for-like EBITDA benefited from improved trading across most of our operating regions, new openings and the acquisition of two freehold properties in Germany (previously held under operating leases).
-- Normalised profit before tax increased by 1.1% to GBP32.1 million (2016: GBP31.7 million). Normalised profit is affected by the first year loss of new openings, which do not have mature trading profiles yet. Normalised profit is further negatively affected by the first time consolidation of the first quarter Croatian operations which, due to its seasonality, are negative.
-- Normalised earnings per share was GBP0.58 (2016: GBP0.68), a decrease of 14.4%. Reported basic/diluted earnings per share was GBP0.57 (2016: GBP0.83)
-- Proposed final dividend of 13 pence per share (2016: 11 pence per share). Total dividend for the year of 24 pence per share (including the interim ordinary dividend of 11 pence per share), an increase of 14.3%.
Operational highlights
-- Another year of corporate activity to continue to reshape the Group for future growth.
-- Capital restructuring - sale and leaseback of Park Plaza London Waterloo and refinancing of Croatian debt - raising c.GBP85 million in excess cash for future development and growth.
-- Successful public offering of new shares in Croatian subsidiary, which raised EUR106 million of new capital for portfolio investment and growth.
-- Full opening of Park Plaza London Waterloo and Park Plaza London Park Royal, adding 706 rooms to hotel portfolio.
-- Continued investment in renovation projects across current portfolio to enhance product offering and guest experience.
Commenting on the results, Boris Ivesha, President and Chief Executive Officer, PPHE Hotel Group said:
"2017 was another year of significant progress for the Group and a number of milestones have been achieved. This strong performance was once again delivered alongside corporate activity, including a significant fundraising in Croatia, the addition of 706 rooms to the UK portfolio and refinancing of debt, in line with our business goal of realising our growth potential and creating long-term value for our shareholders.
Trading in 2018 to date is in line with the Board's expectations and we look forward to focusing on a strong pipeline of renovations and developments which will further expand and enhance our hotel portfolio. We firmly believe that the superior quality of the new product and service offerings will stand us in good stead for healthy trading in the long term."
Key financial statistics
Hot Features
Premium
Reported in GBP Like-for-like GBP(1)
(GBP) (GBP)
------------------------------ -------------------------------
Year ended Year ended Year ended Year ended
31 Dec 2017 31 Dec 31 Dec 2017 31 Dec 2016
2016
-------------- ---------------- ------------ ------------- ----------------
Total revenue GBP325.1 million GBP272.5 GBP300.8 GBP272.8 million
million million
-------------- ---------------- ------------ ------------- ----------------
EBITDAR GBP116.0 million GBP103.0 GBP109.3 GBP99.9 million
million million
-------------- ---------------- ------------ ------------- ----------------
EBITDA GBP107.3 million GBP94.1 GBP101.1 GBP93.0 million
million million
-------------- ---------------- ------------ ------------- ----------------
Occupancy 77.3% 76.0% 77.2% 74.6%
-------------- ---------------- ------------ ------------- ----------------
Average room GBP120.2 GBP111.0 GBP119.7 GBP111.0
rate
-------------- ---------------- ------------ ------------- ----------------
RevPAR GBP92.9 GBP84.4 GBP92.4 GBP82.9
-------------- ---------------- ------------ ------------- ----------------
Room revenue GBP224.0 million GBP183.2 GBP203.3 GBP183.2 million
million million
-------------- ---------------- ------------ ------------- ----------------
(1) The like-for-like figures for the 12 months ended 31 Dcember 2017 exclude Park Plaza London Park Royal for the period, Park Plaza London Waterloo for the first 10 months of 2017 and Park Plaza Nuremberg for the first five months of 2017. Furthermore, the like-for-like comparison figures for the 12 months ended 31 December 2016 have been adjusted to exclude Park Plaza Prenzlauer Berg Berlin (the lease of which was terminated on 30 June 2016) and to include the performance of the Croatian operations for the rfiorst quarter of 2016. In addition, EBTIDA numbers in both periods up until 31December have been adjusted to reflect the new freehold position of art'otel cologne and art'otel berlin kudamm (rental costs adjusted)
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 year ended 31 December 2017 (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 15 May 2018 at 12 noon at 1(st) and 2(nd) Floors, Elizabeth House, Les Ruettes Brayes, St Peter Port, Guernsey GY1 1EW.
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: www.hemscott.com/nsm.do
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 year ended 31 December 2017. This material is not a substitute for reading the full Annual Report.
Enquiries:
PPHE Hotel Group Limited
Robert Henke, Executive Vice Tel: +31 20 717
President of Corporate Affairs 8600
and Customer Experience
Lisa Woodman, Director of Corporate Tel: +44 (0)20
Communications 7034 4800
Hudson Sandler
Wendy Baker/Sophie Lister Tel: +44 (0)20
796 4133
pphe@hudsonsandler.com
Notes to editors
The Company is a Guernsey registered company and through its subsidiaries, jointly controlled entities and associates, owns, leases, operates, franchises and develops full-service upscale, upper upscale and lifestyle hotels in major gateway cities, regional centres and select resort destinations, predominantly in Europe.
The majority of the Group's hotels operate under the Park Plaza(R) Hotels & Resorts or art'otel(R) brands. The Group has an exclusive licence from Carlson Hotels Worldwide Inc., one of the world's largest hotel groups, to develop and operate Park Plaza(R) Hotels & Resorts in Europe, the Middle East and Africa.
The art'otel(R) brand is wholly owned by the Group.
The Group has a controlling ownership interest (51.97% of the share capital) in Arena Hospitality Group, one of Croatia's best-known hospitality groups.
The Group's portfolio of owned, leased, managed and franchised hotels comprises 39 hotels offering a total of nearly 9,000 rooms. The Group's development pipeline includes two new hotels which are expected to add an additional 500 rooms by the end of 2022.
Company websites:
www.pphe.com
www.arenahospitalitygroup.com
For reservations:
www.parkplaza.com
www.artotels.com
www.arenaturist.com
www.arenahotels.com
www.arenacampsites.com
For images and logos visit www.vfmii.com/parkplaza
Forward-looking statements
This trading statement may contain certain "forward-looking statements' which reflect the Company's and/or the Directors' current views with respect to financial performance, business strategy and future plans, both with respect to the group and the sectors and industries in which the group operates. Statements which include the words "expects", "intends", "plans", "believes", "projects", "anticipates", "will", "targets", "aims", "may", "would", "could", "continue" and similar statements are of a future or forward-looking nature. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause the group's actual results to differ materially from those indicated in these statements. Any forward-looking statements in this interim management statement reflect the group's current views with respect to future events and are subject to risks, uncertainties and assumptions relating to the group's operations, results of operations and growth strategy. These forward-looking statements speak only as of the date of this interim management statement. Subject to any legal or regulatory obligations, the Company undertakes no obligation publicly to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All subsequent written and oral forward-looking statements attributable to the group or individuals acting on behalf of the group are expressly qualified in their entirety by this paragraph. Nothing in this publication should be considered as a profit forecast.
CHAIRMAN'S STATEMENT
2017 has been yet another remarkable year for the Group. We continued to make significant progress in fulfilling our strategy of realising our growth potential and creating long-term value for our shareholders.
Today, the Group's portfolio of owned, co-owned, leased, managed and franchised hotels comprises 39 hotels offering a total of nearly 9,000 guest rooms in Europe.
It was a historic year of corporate activities. In the first half of 2017, we completed the successful public offering of new shares in our Croatian subsidiary, Arena Hospitality Group d.d. ("Arena"), raising approximately EUR106 million. The new capital will be used to accelerate our growth plans for Central and Eastern Europe and enhance the quality of our existing operations in the region.
Furthermore, we undertook a number of strategic transactions which allowed us to free up capital and reshape the business to pave the way for future redevelopment and growth opportunities.
In July 2017, we completed the sale and leaseback of the brand new Park Plaza London Waterloo for GBP161.5 million.
The successful debt restructuring activities completed in 2016, and the further debt refinancing of all our Croatian borrowings undertaken in 2017, means that the Group is in a unique financial position and well positioned to take advantage of opportunities which will drive further growth and shareholder returns.
Alongside the corporate activity, we have improved our operational activities, thereby increasing revenues across the business.
We have further extended our presence in the buoyant London hotel market with the full opening in summer 2017 of Park Plaza London Waterloo and Park Plaza London Park Royal. In addition, the major renovation project at Park Plaza London Riverbank has enhanced the facilities and appeal of the hotel. We now operate nearly 3,200 rooms in London.
Croatia continues to soar in popularity with both international and domestic holidaymakers and our properties in the popular tourist region of Istria are well positioned to further capitalise on this growth.
Our performance is underpinned by our strong sales and marketing capabilities, supported by our long-standing relationship with the Carlson Rezidor Hotel Group which provides us with significant scale for distribution of our offering and access to powerful international loyalty programmes.
As previously announced, Chen Moravsky stepped down from his executive roles of Deputy Chief Executive Officer and Chief Financial Officer on 31 December 2017 in order to pursue new opportunities. We are delighted that he remains on the Board in his new capacity as a Non-Executive Director and on behalf of the Board, I would like to thank Chen for his tremendous contribution during his time as an Executive Director.
Daniel Kos was promoted to Chief Financial Officer effective as of 1 January 2018 and was appointed by the Board as an Executive Director on 27 February 2018. The Board looks forward to working with him in his new roles.
We remain ever mindful of the geopolitical environment, increasing cost pressures and the uncertainties the travel industry is currently facing. Against this backdrop, I am delighted to say that our properties in operation have collectively delivered a strong performance. Looking ahead, we
are committed to continuously improving and maintaining the excellent quality of our portfolio and we have several exciting renovation projects well under way in London and Amsterdam.
The Board is proposing the payment of a final dividend of 13 pence per share, bringing the total ordinary dividend for the year ended 31 December 2017 to 24 pence per share. This is in line with our progressive dividend policy and reflects the Board's confidence in the strength of the Group.
Once again, the team has worked extremely hard to achieve these results. The Board would like to sincerely thank all our team members for their continued dedication and, most of all, their passion and commitment to outstanding service and customer engagement. I would also like to thank all members of the Board for their contribution, guidance and support during what has been a milestone year.
We are excited about the year ahead and remain focused on delivering further growth and continually enhancing our hospitality offering.
Eli Papouchado
Chairman
PRESIDENT & CHIEF EXECUTIVE OFFICER'S STATEMENT
2017 was another year of significant progress for the Group. We are pleased to report a strong performance, which was delivered alongside corporate activity to enhance our business goal of realising our growth potential and creating long-term value for our shareholders.
Overview
Our reported total revenue increased by 19.3%, primarily driven by our increased room inventory following the official opening of our two new hotels in London, a full year contribution from our hotel in Nuremberg, and the extension of Park Plaza London Riverbank. Furthermore, good trading across several of our operating regions was underpinned by extensive renovation projects to upgrade our portfolio, which has resulted in improved performances at these hotels. On a like-for-like basis, total revenue was up 10.3%.
A number of milestones were passed during the year, including a historic public offering in Croatia, completion of the sale and leaseback of Park Plaza London Waterloo which opened in 2017, and the refinancing of debt, raising additional capital for future growth opportunities.
In addition, in July 2017, PPHE Hotel Group celebrated ten years of being listed on the London Stock Exchange. During the last decade, we have followed a progressive dividend policy providing stable returns to our shareholders, as illustrated by the table on page 46 of the Annual Report and Accounts 2017.
Our strategy
The Board remains focused on its aim to become one of the leading international hospitality groups within the upscale, upper upscale and lifestyle segments, thereby creating and realising shareholder value.
We have a flexible business model which enables us to consider a range of opportunities for future growth. Park Plaza London Waterloo is an excellent example of our ability to adapt our model and seize an opportunity to develop a high-quality hotel and create value for shareholders.
We acquired a redundant office building, extended the property's footprint and developed it into a world class hotel.
Following its opening, the hotel was sold and leased back, unlocking significant capital whilst securing operating income and maintaining control of operation of the hotel for many years to come.
Our strategy is based around six core business priorities, which are:
-- delivering stabilised annual return on shareholder capital; -- maintaining a high EBITDA margin; improving guest experience through -- consistent service delivery and product enhancements; -- driving growth by expanding our portfolio through a variety of business models;
-- improving overall performance through innovative revenue-generation and marketing initiatives; and
-- continuing to leverage our Carlson Rezidor Hotel Group partnership to further grow revenues.
In 2017, we have once again delivered clear progress across these priorities.
Corporate activity
One of the main highlights of the year was the successful public offering of new shares in our Croatian subsidiary, Arena Hospitality Group ("Arena"), which is listed on the Zagreb Stock Exchange. This raised approximately EUR106 million of new capital and will accelerate investment plans aimed at upgrading properties whilst funding further growth through expansion in Central and Eastern Europe. PPHE Hotel Group participated in this offering and remains Arena's controlling shareholder with a 51.97% interest.
Following the fundraising, PPHE Hotel Group sold its remaining 12% direct ownership in its German and Hungarian operations to Arena, resulting in Arena having 100% ownership of these operations.
Furthermore, in February 2017, the Group completed the acquisition of the freehold interests in art'otel cologne and art'otel berlin kudamm in Germany. These art'otels are now wholly-owned and operated by Arena.
In July 2017, we completed the sale and leaseback of Park Plaza London Waterloo for GBP161.5 million. This transaction enabled the Group to unlock the capital invested in Park Plaza London Waterloo, whilst allowing it to continue to benefit from the hotel's operation and associated profits and to provide capital for future investments.
In the Netherlands, we completed the sale of one of the three properties that comprise Park Plaza Vondelpark, Amsterdam.
In the United Kingdom, we acquired an 11% ownership interest in Park Plaza County Hall London through the purchase of 46 apart-hotel units.
In December 2017, we successfully refinanced all of Arena's Croatian loans, a total of EUR64.0 million. These are now on unified and more favourable terms and the interest costs have decreased significantly. Over the last two years, PPHE Hotel Group's strategy to refinance its loan facilities has resulted in 95% of the debt being secured at an average internal rate of 3.1% with an average maturity of 8.6 years. This refinancing further demonstrates the Group's ability to manage its financial position to support growth effectively.
These corporate activities are a continuation of our strategy to create value and position the business for the next stage of its growth. See the Financial and business review 2017 on page 44 of the Annual Report and Accounts 2017 for further details.
Portfolio growth
During 2017, we fully opened two new hotels in the buoyant London market, adding a further 706 rooms to our portfolio.
Park Plaza London Waterloo, a 494-room upper upscale property, was officially opened in June 2017. The hotel is well located on London's South Bank, one of the city's main sightseeing hubs, and has great transport links, attracting both leisure and business guests from around the world. Florentine
Restaurant & Bar, the hotel's all-day dining concept, has received excellent reviews since it opened.
In the same month, Park Plaza London Park Royal also officially opened. This contemporary 212-room hotel in west London has easy access to Central London, Wembley Stadium, Warner Bros. Studio Tour London and London Heathrow Airport.
Since opening, both hotels have received positive reviews and feedback from guests.
As at 31 December 2017, the Group's portfolio of owned, co-owned, leased, managed and franchised hotels comprises 39 hotels, offering a total of approximately 9,000 rooms. Our development pipeline currently includes two new hotels which are expected to add approximately 500 rooms by the end of 2022.
Ongoing investment in our portfolio
We recognise the importance of maintaining a high-quality portfolio and are committed to ongoing investment in both major renovation projects and smaller refurbishment programmes to maintain
the high standards of our hotels.
During 2017, we began several refurbishment projects across our portfolio, including the extensive renovation of public areas and rooms at Park Plaza Victoria Amsterdam, and the development of additional facilities such as a swimming pool and a spa at Park Plaza London Riverbank. In Croatia, works were undertaken to upgrade a number of properties ahead of the 2017 summer season.
Looking ahead, 2018 investments include the expected completion of the projects at Park Plaza Victoria Amsterdam and Park Plaza London Riverbank, the progression of the repositioning works at Park Plaza Sherlock Holmes London and the commencement of renovation projects at Park Plaza Utrecht and Park Plaza Vondelpark, Amsterdam. Arena will also invest in renovation projects across several of its hotels in Germany and, most notably, make the first significant investment in the Arena Pomer Campsite, which plans to launch as Croatia's first 'all-glamping' offer.
Service excellence
Our emphasis on the consistent delivery of exceptional customer service to provide our guests with a memorable, best-in-class experience remains at the heart of the business.
Once again, our guest satisfaction surveys show that our ongoing commitment to consistent, high-level service has been recognised through both our guest satisfaction and service performance scores. Overall, our guest satisfaction score increased from 8.39 to 8.43 (on a scale of 1-10) and our service performance score remained strong at 8.71 (on a scale of 1-10).
Other key metrics, such as net promoter score, recommendation rate and return rate, all increased year-on-year.
The strength and passion of our team is the keystone to achieving these scores and we are proud that our team's hard work and dedication has delivered another great result.
Investment in people
Attracting, retaining and developing talented team members is a key priority for all those operating in the hospitality sector. Over the last 18 months, there has been an increasing shortage of available qualified personnel across the industry. This trend has reinforced the importance of being an employer of choice; able to attract and retain a highly committed, skilled workforce. This was particularly relevant to the Group while we filled positions at our recently opened hotels. To support this recruitment drive, the Group introduced a number of initiatives, including new apprenticeship and graduate training programmes.
In 2017, we launched the Employer Branding and Team Value Proposition for the Park Plaza brand to aid retention of the strong talented individuals within the business and to promote Park Plaza as an attractive employer to prospective talent. This initiative puts employee engagement and wellbeing at its heart to ensure we continue to attract new team members, whilst retaining and developing the best talented team members across the business. In 2018, the Group plans to develop a bespoke proposition for its wholly owned art'otel brand.
We have a number of new renovations on the horizon to ensure our product is always of the highest specification and quality.
Our People & Culture teams across Europe will support our managers in attracting new, and developing existing, talented team members and embedding our PPHE Hotel Group vision into the hotels.
We actively engage with our team members and this has been reflected in the high levels of participation in our annual employee engagement survey. In total, 2,900 team members participated in the survey. The overall employee satisfaction engagement score for the year increased to 85.4% (2016: 84.9%).
Going into 2018, we remain focused on people development, including leadership competencies and talent management, in order to ensure that the culture at PPHE Hotel Group continues to be unique for guests and team members.
Talent management remains top of our agenda in 2018 and we will be refreshing and introducing a host of new programmes and systems. Learning & Development sees another year of the successful Foundation In Management (FIM) programme and the roll-out of the you:niversity-next Management Development Programme to strengthen both current and new leaders within the Group.
Sales and marketing
Our long-standing strategic partnership with the Carlson Rezidor Hotel Group continues to bring us many benefits.
PPHE Hotel Group owns, co-owns, operates and franchises hotels under multiple brands and, through our relationship with Carlson Hotels, the Group has a perpetual exclusive licence for the Park Plaza brand for certain countries in Europe, the Middle East and Africa.
Our industry is evolving rapidly and becoming ever more global. Our partnership with the Carlson Rezidor Hotel Group gives us access to innovative state-of-the-art global distribution platforms for our products, including travel agents, online travel websites and global sales and e-commerce teams, which complement our in-house sales and marketing initiatives.
In addition, we participate in the Carlson Rezidor Hotel Group's highly successful loyalty scheme, Club Carlson(SM) , which has more than 19 million members worldwide. As a medium-size hotel owner and operator, leveraging this extensive distribution network and the strength of the Park Plaza brand allows us to retain our operational agility, whilst enabling us to compete with the largest players in the hospitality sector.
Following a year of corporate activity, planning and restructuring under new ownership, the Carlson Rezidor Hotel Group is well-positioned to start driving various new technology, digital and commercial activities in 2018 and we fully expect to benefit from them.
The benefits from this strategic partnership and the new Carlson Rezidor Hotel Group strategy are expected to help us to further raise the profile of our properties and increase engagement with both existing and potential customers to drive revenue growth.
Awards and industry recognition
We are proud that in 2017 the quality of our hotels and our focus on delivering exceptional customer service to our guests was once again recognised through
industry accolades.
In the United Kingdom, we were recognised as the 'Number One-Mid Sized Group (UK)' by Venue Verdict. Three of our hotels in Germany were awarded 'Guest Review Award Winner' by booking.com, and art'otel cologne received a Thomas Cook 'Sunny Heart Award 2017'.
In the Netherlands, Park Plaza Vondelpark, Amsterdam achieved Gold certification under the Green Key system.
In addition, PPHE Hotel Group won 'Best Annual Report' at the 2017 Property Marketing Awards. The judges felt the report epitomised the Group's compelling brand experience and its unique and distinctive approach.
Our Croatian subsidiary, Arena, was recognised by the Zagreb Stock Exchange Awards 2017, winning the Top Turnover Gainer category, and was awarded the 'Golden Goat for the Best Technological Innovation' by the Istria Tourism Board for its complimentary guest smartphone.
Responsible business strategy - Responsible Experiences
In 2017, we committed to developing a responsible business strategy, Responsible Experiences, to ensure that we are responsible in everything we do as a business. Full details of the strategy and activity can be found in the responsible business report on page 60 of the Annual Report and Accounts 2017.
The new responsible business strategy has been developed to build upon our current corporate social responsibility (CSR) successes to help create a long-term sustainable business model. As an international business, we understand the importance of the role we can play in making a difference through initiatives to promote a sustainable environment for now and future generations, being a preferred employer of choice and supporting the local communities in which we operate, all of which strongly reflects our mission of inspiring guests through individuality and passion.
Charitable activities
Activities in the year included: support for the Carlson Rezidor Hotel Group's 'Responsible Business Action Month' under the campaign theme of 'Save Tomorrow's Trees Today'; we donated 120 volunteer hours to the Nottinghamshire Wildlife Trust; and raised funds for the World Childhood Foundation.
In addition, our teams participated in, or supported, a wide array of charitable activities and fundraising, including raising funds for The Movember Foundation.
Our team
Chen Moravsky stepped down from his executive roles on 31 December 2017. I would like to personally thank Chen for his significant and long-standing contribution to the development of the business during this period. We are delighted that the Board will continue to benefit from his experience and leadership in his new role as a Non- Executive Director.
In November 2017, we announced a number of senior appointments to strengthen our Executive Leadership Team, focused on key areas within the business to support the next stage of growth.
Daniel Kos, who joined the Group in 2011 and has worked closely with Chen Moravsky, took up his new role of Chief Financial Officer on 1 January 2018 and as Executive Director on 27 February 2018.
Robert Henke was appointed Executive Vice President of Corporate Affairs and Customer Experience and, amongst other responsibilities, will oversee corporate and investor communications.
Greg Hegarty was appointed to the newly-created role of Executive Vice President UK and Chief Commercial Officer and has overall responsibility for delivery of the Group's commercial strategy. Jaklien van Sterkenburg was appointed as Executive Vice President People and Culture | Head of HR.
I would like to congratulate the four of them on their promotions and I look forward to working with them closely.
On behalf of the Board, I would also like to take this opportunity to thank everyone that has worked for the Group during the year and contributed to our success. We are sincerely thankful for all your hard work and dedication.
Current trading and outlook
Trading to date is consistent with meeting the Board's expectations for the full year. We look forward to focusing on a strong pipeline of renovations and developments across our portfolio in 2018. In early 2018, we were pleased to announce that we had exchanged contracts to acquire, from our joint venture partner, a fifty percent interest in the company that owns the site for the development of art'otel london hoxton. Once this transaction completes we will have full ownership and we are aiming to commence preliminary works in the second quarter of 2018. Hoxton's desirability as a London destination is complemented by the second art'otel development in Battersea; art'otel london battersea power station - both locations are seeing huge investment and regeneration, positioning them as European leisure districts in strong demand.
With a number of key renovation programmes taking place in 2018, we anticipate a slight reduction in services available to guests and this may result in a potential short term impact to final year-end hotel revenue levels.
2018 will also see a full year of trading for Park Plaza London Waterloo and Park Plaza London Park Royal, with a combined room count of 706 rooms. Accompanied by further inventory made available following Park Plaza London Riverbank's full re-launch later in 2018, we expect to drive further benefits from our strong London portfolio. We are equally excited about the planned re-launch of the extensively renovated Park Plaza Victoria Amsterdam and the launch of the glamping offering at Arena Pomer Campsite in Croatia.
We firmly believe that the superior quality of the new product and service offerings will stand us in good stead for healthy trading in the long term.
FINANCIAL AND BUSINESS REVIEW 2017
Strong performance and funding in place to support further growth.
Reported in GBP Like-for-like GBP(1)
(GBP) (GBP)
------------------------------ -------------------------------
Year ended Year ended Year ended Year ended
31 Dec 2017 31 Dec 31 Dec 2017 31 Dec 2016
2016
-------------- ---------------- ------------ ------------- ----------------
Total revenue GBP325.1 million GBP272.5 GBP300.8 GBP272.8 million
million million
-------------- ---------------- ------------ ------------- ----------------
EBITDAR GBP116.0 million GBP103.0 GBP109.3 GBP99.9 million
million million
-------------- ---------------- ------------ ------------- ----------------
EBITDA GBP107.3 million GBP94.1 GBP101.1 GBP93.0 million
million million
-------------- ---------------- ------------ ------------- ----------------
Occupancy 77.3% 76.0% 77.2% 74.6%
-------------- ---------------- ------------ ------------- ----------------
Average room GBP120.2 GBP111.0 GBP119.7 GBP111.0
rate
-------------- ---------------- ------------ ------------- ----------------
RevPAR GBP92.9 GBP84.4 GBP92.4 GBP82.9
-------------- ---------------- ------------ ------------- ----------------
Room revenue GBP224.0 million GBP183.2 GBP203.3 GBP183.2 million
million million
-------------- ---------------- ------------ ------------- ----------------
1 The like-for-like figures for the 12 months ended 31 Dcember 2017 exclude Park Plaza London Park Royal for the period, Park Plaza London Waterloo for the first 10 months of 2017 and Park Plaza Nuremberg for the first five months of 2017. Furthermore, the like-for-like comparison figures for the 12 months ended 31 December 2016 have been adjusted to exclude Park Plaza Prenzlauer Berg Berlin (the lease of which was terminated on 30 June 2016) and to include the performance of the Croatian operations for the first quarter of 2016. In addition, EBTIDA numbers in both periods up until 31December have been adjusted to reflect the new freehold position of art'otel cologne and art'otel berlin kudamm (rental costs adjusted)
Performance
The Group is pleased to announce strong results for the year, in line with the Board's expectations.
Reported total revenue was up 19.3% to GBP325.1 million (2016: GBP272.5 million) and EBITDA increased by 14.0% to GBP107.3 million (2016: GBP94.1 million). This growth was mainly the result of an increase in hotel room inventory due to the full opening of two new hotels in London and the first full year contribution of Park Plaza Nuremberg (which opened in June 2016). Furthermore, we benefited from improved trading across most of our operating regions, notably Germany and Croatia.
As previously announced, renovation works during the year resulted in a reduced room inventory at some of our hotels as we invested in upgrading these properties. The hotel most affected was Park Plaza Victoria Amsterdam where only 50% of the previous year's room inventory was available, affecting the like-for-like performance.
On a like-for-like(1) basis, total revenue increased by 10.3% and EBITDA improved by 8.7%. Like-for-like performance was also positively affected by the additional rooms in Park Plaza London Riverbank.
Whilst we recognise that certain cost pressures and renovation programmes may have an effect on our performance, we are confident about our long-term prospects.
RevPAR
Like-for-like(1) RevPAR was GBP92.4, an increase of 11.5% (2016: GBP82.9), reflecting strong RevPAR growth in our German and Croatian regions, alongside the continued weakening of Pound Sterling against the Euro. Like-for-like RevPAR growth was achieved through a 7.8% increase in average room rate to GBP119.7 (2016: GBP111.0). Like-for-like occupancy improved by 260 bps to 77.2% (2016: 74.6%).
As a result, like-for-like room revenue was up 11.0% to GBP203.3 million (2016: GBP183.2 million).
Reported RevPAR was GBP92.9 (2016: GBP84.4), up 10.0%, driven by an 8.2% increase in average room rate and a 130 bps improvement in occupancy.
EBITDA
Reported EBITDA increased by 14.0% to GBP107.3 million (2016: GBP94.1 million) as a result of improved trading across most of our operating regions, new openings and the acquisition of two freehold properties in Germany (previously held under operating leases). Our reported EBITDA margin for the year reduced by 150 bps to 33.0% (2016: 34.5%). This decrease is caused, in particular, by the first time consolidation of the first quarter of the Croatian operations, which due to seasonality is negative. Furthermore, an increase in business rates in our London properties and the new openings, which have not yet reached full maturity had a negative effect.
On a like-for-like basis, EBITDA increased by 8.7% to GBP101.1 million (2016: GBP93.0 million) and
our EBITDA margin reduced by 50 bps to 33.6% (2016: 34.1%).
Normalised profit before tax
Reconciliation reported
to normalised profit
----------------------------------------
Year ended Year ended
31 Dec 31 Dec 2016
2017 GBP million
GBP million
------------------------------------------------------- -------------------------- ------------
Reported profit before tax 31.7 38.2
------------------------------------------------------- -------------------------- ------------
Fair value movements on derivatives recognised
in the profit and loss (0.1) (0.2)
------------------------------------------------------- -------------------------- ------------
Negative goodwill and capital gains after the
acquisition of the remaining interests in Arena - (26.2)
------------------------------------------------------- -------------------------- ------------
Refinance costs and expenses (including termination
of hedge) 0.5 23.4
------------------------------------------------------- -------------------------- ------------
Park Plaza Westminster Bridge London fair value
adjustment on income swaps and buy back of Income
Units 1.1 0.6
------------------------------------------------------- -------------------------- ------------
Forfeited deposits from rescinded sale contracts
of Income Units at Park Plaza Westminster Bridge
London to private investors - (6.5)
------------------------------------------------------- -------------------------- ------------
Restructuring expenses and pre-opening expenses 0.2 2.4
------------------------------------------------------- -------------------------- ------------
Gain on sale of one building in Park Plaza Vondelpark, (1.3)
Amsterdam -
------------------------------------------------------- -------------------------- ------------
Normalised profit before tax* 32.1 31.7
------------------------------------------------------- -------------------------- ------------
* The normalised earnings per share amount to GBP0.58, calculated with 42,249,000 average outstanding shares.
Normalised profit before tax increased by 1.1% to GBP32.1 million (2016: GBP31.7 million). Normalised profit is affected by the first year loss of new openings, which do not have mature trading profiles yet. Normalised profit is further negatively affected by the first time consolidation of the first quarter Croatian operations which, due to its seasonality, are negative. Below is a reconciliation table from reported to normalised profit.
Profit before tax
Reported profit before tax decreased by GBP6.5 million to GBP31.7 million (2016: GBP38.2 million), down 17.1%. The profit of 2016 was significantly affected by positive one-off results, which resulted in a decrease in 2017.
Asset base and leverage
The Group realises the majority of its revenue and EBITDA from assets in ownership, primarily those assets located in Central London and Amsterdam. As well as successfully operating the hotels it owns/ co-owns, the Group has over 30 years of experience in developing and managing assets. This unique in-depth knowledge of the real estate market and its proven track record of developing and realising value from property transactions and developments over the last decade, enables the Group to act quickly on opportunities.
This business model requires significant capital investments which the Group leverages by borrowing from well-known financial institutions within a 50-65% loan-to-value ratio. The Group also relies on its extensive experience in property finance, with strong relations with funding institutions and a track record of refinancing its assets, even when met with challenging market conditions.
Over the past two years the Group has taken advantage of the low interest rate environment and has successfully refinanced over 95% of its assets, equating to approximately GBP670 million. Under the Group's debt restructuring, the majority of the facilities' weighted average term was extended and the average cost of borrowing decreased significantly.
Below is a synopsis of the key factors of the Group's financial position:
2017 2016
---------------------------- ---- ----
Interest bearing debt (in
GBPmillion) 705 766
---------------------------- ---- ----
Average cost of debt 3.1% 3.5%
---------------------------- ---- ----
Average maturity (in years) 8.6 7.7
---------------------------- ---- ----
Cash, deposits and liquid
investment (in GBPmillion) 291 170
---------------------------- ---- ----
Over the past few years, both the London and the Amsterdam real estate markets have shown a strong and diversified demand for hotel investments which has led to an increase in real estate prices. As part of the process of securing the new facilities, an independent valuation of the Group's interests in the hotels was obtained. In the consolidated financial statements, the Group measures its assets at cost price less accumulated depreciation. The independent valuations obtained as part of the refinancing over the last two years indicate an addition over presented book values exceeding GBP500 million. The excess value is not shown in the financial statements, where properties are shown at historical cost, less depreciation.
The Group's facilities are all asset backed and have limited or no recourse to the Group. These debts are managed on either a single property or a portfolio basis. These asset backed loans contain certain debt service covenants and, most commonly, a loan to value ratio. The Company is usually permitted to rectify any potential default during the term of the loan, thus removing the threat of needing to refinance at less favourable terms.
Dividend
For the financial year 2017, the Board is proposing a final dividend payment of 13 pence per share (2016: 11 pence per share) which, when combined with the interim ordinary dividend of 11 pence per share (2016: 10 pence per share) paid to shareholders on 13 October 2017, brings the total ordinary dividend for the year ended 31 December 2017 to 24 pence per share (2016: 21 pence), an increase of 14.3%. Subject to shareholder approval at the Annual General Meeting, to be held on 15 May 2018, the dividend will be paid on 18 May 2018 to shareholders on the register at 13 April 2018. The shares will go ex-dividend on 12 April 2018.
Since the Group started paying dividends in 2012, the Group has followed a progressive dividend policy, retaining proper and prudent reserves. The chart below provides an overview of the dividend payment history.
Financial position
Net bank debt as at 31 December 2017 was GBP408.1 million, a reduction of GBP176.8 million (as at December 2016: GBP584.9 million). During the period, the movement in net bank debt included an increased position of cash and liquid investments of GBP116 million primarily due to the sale and leaseback of Park Plaza London Waterloo and a share issuance at Arena Hospitality Group. Net debt decreased due to the repayment of the construction facility in Park Plaza London Waterloo of GBP80 million; the early repayment of a corporate facility of GBP16 million and the payment of regular instalments of GBP17 million. Net debt increased by GBP32 million due to the bank funding of the acquisition of two freehold properties in Germany and increased by GBP9 million due to exchange results.
Earnings and shareholder value
Normalised earnings per share was GBP0.58 (2016: GBP0.68), representing a decrease of 14.4%. Reported basic/diluted earnings per share for the period was GBP0.57, a decrease of 31.0% (2016: GBP0.83).
The majority of the decrease in earnings per share was caused by an increased number of minority shareholders in Arena after the public offering.
The net asset value of the Group attributable to PPHE Hotel Group shareholders amounted to GBP343.3 million which includes a significant excess cash position (more details are provided on page 49 of the Annual Report and Accounts 2017). Net asset value takes into account the assets of the Group at historical cost.
Corporate activity
Investment in Croatia
2017 was an important year in our strategy to grow our operations in Central and Eastern Europe. We undertook significant corporate activity to reshape Arena into a dynamic hospitality company, whilst strengthening and developing its business and market position in the upscale, upper upscale and lifestyle segments of the hospitality market, primarily within Croatia and Germany.
In February 2017, following the completion of the acquisition of 88% of the German and Hungarian operations of PPHE Hotel Group and the grant of territorial rights for the Park Plaza brand in 18 countries, Arena completed the acquisition of the freehold interests in art'otel berlin kudamm and art'otel cologne, which the Group leased and managed, for an amount of EUR54.5 million (GBP47.4 million). Following completion, the previous lease expenses were eliminated.
Furthermore, in June 2017, Arena successfully raised EUR106 million (HRK 788 million) of new capital (before expenses) through a public offering of shares on the Zagreb Stock Exchange to support both organic and inorganic growth. The offering consisted of the issue of 1,854,971 new ordinary shares at a price of HRK 425 per share, which were listed and commenced trading on the Official Market of the Zagreb Stock Exchange on 6 June 2017. The public offering was deemed attractive to both domestic and international investors, with approximately 20% of the new shares subscribed for by investors located outside of Croatia. Following the public offering, the Group maintained its controlling interest in Arena, but its shareholding was diluted to 51.97%.
Following the public offering, Arena exercised the option granted to it by the Group to acquire the remaining 12% interest in the German and Hungarian operations of the Group, comprising eight Park Plaza or art'otel branded hotels, for a consideration of EUR8.3 million.
In December 2017, Arena successfully refinanced all of its loan agreements into one unified facility on more favourable terms, lowering interest expenses by approximately 50%.
Sale and leaseback of Park Plaza London Waterloo
The sale and leaseback of Park Plaza London Waterloo was completed in July 2017. The Group sold the freehold of the property for GBP161.5 million and agreed a 199-year lease at an initial rent of GBP5.6 million per annum, with an annual inflation adjustment subject to a cap and a collar. The independent valuation carried out by the purchaser gave an aggregate value of GBP250 million on a vacent possession basis (approximately GBP500,000 per key). The transaction enabled the Group to release 65% of that value whilst retaining a long-term lease, control of the operations and associated profits of the hotel, thereby keeping the remaining 35% within the Group. As at 31 May 2017, the hotel had a book value of approximately GBP124 million. Following the transaction, the Group realised approximately GBP80 million of available cash which it intends to utilise to further improve and grow the Group's portfolio, amongst other corporate purposes.
Other property transactions
An 11.0% ownership interest in Park Plaza County Hall London was acquired through the purchase of 46 apart-hotel units for an aggregate value of GBP16.7 million. One of the three properties that comprise Park Plaza Vondelpark, Amsterdam was sold for a consideration of GBP7 million. Together, these corporate activities well position the Group for future growth.
Looking ahead
With the significant corporate activities of the Group in 2016 and 2017, the Group is well placed to make further progress to expand its portfolio. In 2018 we will continue our renovation projects, all of which will further strengthen the Group's competitive position.
In the second quarter of 2018, works at Park Plaza Victoria Amsterdam are expected to complete and preliminary works will commence to develop art'otel london hoxton. In addition, Park Plaza London Waterloo and Park Plaza London Park Royal, which both fully opened in 2017, are expected to further mature in 2018, increasing the revenues and improving the profit conversion.
The Group is constantly looking for new acquisition opportunities and has an active pipeline of potential projects. Each project is carefully analysed by the Group's development team and selected projects should provide the Group with good returns on capital and further potential upside on the (re) development.
Return on capital employed
The Group actively pursues a strategy of hotel development and ownership, which is different from many hotel groups where ownership and development of hotel assets is separated from hotel operations.
One of the benefits of our owner/operator model is the removal of the usual conflict between the two different interests in the property. Our strategy has proven to create significant value by enabling the Group to fund its growth in recent years. The Group has the expertise to master the complexities involved in real estate ownership and transactions, including debt/equity structuring, exit strategies, and (re) developing real estate into valuable hotel properties.
Since hotel real estate is an important part of the Group's assets, it is essential to understand this ownership business model in order to be able to accurately value this critical investment. This model is capital intensive and the funding structure of these properties using debt and equity has a significant impact on the equity returns of the Group.
Properties under development and excess cash positions place a burden on the capital of the Group without creating an immediate return. However, once these developments complete, they will add to the profitability of the Group like any other trading asset it owns. Although the Group pursues full property ownership, we understand that the capital intensity required may hinder the Group's growth in other attractive markets. Therefore, the Group has a mixed portfolio approach that provides a spread of risk and reward.
Return on capital employed
The table below provides some selected data for the Group's assets for the year ended 31 December 2017, prepared in Pound Sterling millions. With this table the Group aims to assist investors in making a further analysis of the Group's performance and capital allocation, separating its excess cash position (to fund further growth), the development projects and the assets of Arena Hospitality Group. This data is additional to the segments that are monitored separately by the Board for resource allocations and performance assessment, which are the segments of the Group.
Arena Hospitality
PPHE Hotel Group Group(6) Total
----------------------------------- --------------------- ----------
Trading Excess Non trading Trading Excess PPHE Hotel
properties Cash(4) projects(3) properties Cash(4) Group
GBPm GBPm Reported
GBPm
---------------------------- ----------- -------- ------------ ----------- -------- ----------
Balance Sheet
---------------------------- ----------- -------- ------------ ----------- -------- ----------
Book-value properties
(excluding Income
Units at Park
Plaza
Westminster
Bridge London
sold to third
parties)(1) 806.8 227.9 1,034.7
---------------------------- ----------- -------- ------------ ----------- -------- ----------
Book value intangible
assets 21.6 2.0 23.6
---------------------------- ----------- -------- ------------ ----------- -------- ----------
Book value non-consolidated
investments 15.0 15.0
---------------------------- ----------- -------- ------------ ----------- -------- ----------
Other long-term
assets 17.4 8.2 25.6
---------------------------- ----------- -------- ------------ ----------- -------- ----------
Working Capital (16.8) (12.2) (29.0)
---------------------------- ----------- -------- ------------ ----------- -------- ----------
Cash and Liquid
Investments 66.9 130.0 16.7 77.7 291.3
---------------------------- ----------- -------- ------------ ----------- -------- ----------
Bank/Institutional
loans (short/long
term) (602.7) (99.8) (702.5)
---------------------------- ----------- -------- ------------ ----------- -------- ----------
Finance lease
liability, land
concession and
other provisions (190.4) (17.0) (207.4)
---------------------------- ----------- -------- ------------ ----------- -------- ----------
Deferred profit
Income Units
in Park Plaza
Westminster
Bridge London(5) (10.4) (10.4)
---------------------------- ----------- -------- ------------ ----------- -------- ----------
Total capital
consolidated 92.4 130.0 15.0 125.8 77.7 440.9
---------------------------- ----------- -------- ------------ ----------- -------- ----------
Minority shareholders (60.3) (37.3) (97.6)
---------------------------- ----------- -------- ------------ ----------- -------- ----------
Total capital
employed by
PPHE Hotel Group
shareholders 92.4 130.0 15.0 65.5 40.4 343.3
---------------------------- ----------- -------- ------------ ----------- -------- ----------
Normalised profit
---------------------------- ----------- -------- ------------ ----------- -------- ----------
Revenue 240.9 84.2 325.1 ---------------------------- ----------- -------- ------------ ----------- -------- ---------- EBITDAR 86.6 29.4 116.0 ---------------------------- ----------- -------- ------------ ----------- -------- ---------- Rental expenses (4.3) (4.4) (8.7) ---------------------------- ----------- -------- ------------ ----------- -------- ---------- EBITDA 82.3 25.0 107.3 ---------------------------- ----------- -------- ------------ ----------- -------- ---------- Depreciation (27.6) (6.7) (34.3) ---------------------------- ----------- -------- ------------ ----------- -------- ---------- EBIT 54.7 18.3 73.0 ---------------------------- ----------- -------- ------------ ----------- -------- ---------- Interest expenses: banks and institutions (23.6) 4.0 (27.6) ---------------------------- ----------- -------- ------------ ----------- -------- ---------- Interest on finance leases (3.9) - (3.9) ---------------------------- ----------- -------- ------------ ----------- -------- ---------- Income paid to Income units sold to private investors in Park Plaza Westminster Bridge London (10.3) (10.3) ---------------------------- ----------- -------- ------------ ----------- -------- ---------- Other finance expenses and income 0.8 0.3 0.1 1.2 ---------------------------- ----------- -------- ------------ ----------- -------- ---------- Minority interests ---------------------------- ----------- -------- ------------ ----------- -------- ---------- Result from equity investments (0.2) (0.1) (0.3) ---------------------------- ----------- -------- ------------ ----------- -------- ---------- Normalised profit before tax 31 December 2017(2) 17.7 - 0.1 14.3 - 32.1 ---------------------------- ----------- -------- ------------ ----------- -------- ---------- Reported tax 1.3 (3.0) (1.7) ---------------------------- ----------- -------- ------------ ----------- -------- ---------- Normalised profit after reported tax 19.0 - 0.1 11.3 - 30.4 ---------------------------- ----------- -------- ------------ ----------- -------- ---------- Profit attributable to minority shareholders - - - (5.7) - (5.7) ---------------------------- ----------- -------- ------------ ----------- -------- ---------- Profit after tax attributable to PPHE Hotel Group shareholders 19.0 - 0.1 5.6 - 24.7 ---------------------------- ----------- -------- ------------ ----------- -------- ----------
(1) These are stated at cost price less depreciation. The fair value of these properties is substantially higher
(2) A reconciliation of reported profit to normalised profit is provided on page 45.
(3) This contains properties that are in development.
(4) Excess cash is directly available for further investments and developments.
(5) This is the book-value of units in Park Plaza Westminster Bridge London netted with the advanced proceeds these investors received in 2010.
(6) Arena Hospitality Group is listed on the Zagreb Stock Exchange. The market capitalisation at 31 December 2017 is GBP272 million.
UNITED KINGDOM
Hotel operations
Reported in GBP(GBP) Like-for-like in GBP
(GBP)(1)
----------------------------- -----------------------------
Year ended Year ended Year ended Year ended
31 Dec 2017 31 Dec 2016 31 Dec 2017 31 Dec 2016
-------------- --------------- ------------ ------------ ---------------
Total revenue GBP185.8 GBP148.7 GBP163.8 GBP148.7
million million million million
-------------- --------------- ------------ ------------ ---------------
EBITDAR GBP62.4 million GBP52.5 GBP56.3 GBP52.5 million
million million
-------------- --------------- ------------ ------------ ---------------
EBITDA GBP60.5 million GBP51.1 GBP54.4 GBP51.1 million
million million
-------------- --------------- ------------ ------------ ---------------
Occupancy 83.2% 84.2% 83.4% 84.2%
-------------- --------------- ------------ ------------ ---------------
Average room GBP145.8 GBP143.8 GBP150.3 GBP143.8
rate
-------------- --------------- ------------ ------------ ---------------
RevPAR GBP121.3 GBP121.1 GBP125.4 GBP121.1
-------------- --------------- ------------ ------------ ---------------
Room revenue GBP132.6 GBP102.1 GBP113.9 GBP102.1
million million million million
-------------- --------------- ------------ ------------ ---------------
(1) Like-for-like comparison for 2017 excludes the first 10 months of Park Plaza London Waterloo and the full year of Park Plaza London Park Royal numbers.
Performance
The UK hotel portfolio delivered a strong performance. Reported total revenue grew by 25.0% to GBP185.8 million (2016: GBP148.7 million). This performance reflects strong trading in the first half of the year and the increased new room inventory at Park Plaza London Riverbank, along with the two newly opened London hotels (Park Plaza London Waterloo and Park Plaza London Park Royal).
On a like-for-like basis, revenue increased by 10.2% to GBP163.8 million.
Reported RevPAR was flat at GBP121.3 (2016: GBP121.1), which was the result of 1.4% growth in average room rate to GBP145.8 and a 100 bps decrease in occupancy to 83.2%. However, on a like-for-like basis, RevPAR increased by 3.5%, showing growth in the underlying performance.
Reported room revenue benefited from the additional room inventory, increasing by 29.9% to GBP132.6 million and on a like-for-like basis by 11.5% to GBP113.9 million.
Reported EBITDAR grew by 18.9% to GBP62.4 million (2016: GBP52.5 million) and EBITDA increased by 18.2% to GBP60.5 million. On a like-for-like basis, EBITDAR increased by 7.2% to GBP56.3 million and EBITDA was up 6.4% to GBP54.4 million. EBITDA was affected by a significant increase in property taxes, primarily in the London market.
The hotels in London maintained their strong competitive positions during the year. Park Plaza Westminster Bridge London delivered yet another strong performance, significantly outperforming its competitive set in occupancy, average room rate and RevPAR. Park Plaza London Waterloo and Park Plaza London Riverbank also outperformed their competitive sets in terms of average room rate. Furthermore, Park Plaza Nottingham outperformed its competitive set in occupancy, average room rate and RevPAR.
Development pipeline and renovation projects
Park Plaza Park London Waterloo and Park Plaza London Park Royal, which were both officially opened and became fully operational during the year, brought 706 additional rooms to our portfolio and have been well-received by guests. Renovation projects continued during the year with a focus on improving the competitive position of our hotels and enhancing our guest experience.
Renovation works at Park Plaza London Riverbank are continuing, with the installation of a spa, swimming pool and gym, which will improve the overall appeal of the hotel, and restructuring works to increase room count.
It is anticipated that these works will be completed in the second half of 2018. Renovation works at Park Plaza Sherlock Holmes London started in 2017 and are expected to continue throughout 2018, including the refurbishment of all guest rooms and the revision of the layout of the hotel entrance and the public areas. At Park Plaza Victoria London, renovation projects are expected in the second half of 2018. These will include the refurbishment of public areas and meeting rooms.
Our hotel pipeline includes the landmark art'otel london battersea power station, for which construction is already underway.
The Group will operate this hotel under a management agreement. In addition, the Group has its own art'otel development project, art'otel london hoxton, for which preliminary works are expected to commence in the second quarter of 2018.
Together these hotels are expected to add approximately 500 rooms to the UK portfolio by the end of 2022.
The United Kingdom hotel market*
In 2017, the overall UK hotel market reported RevPAR growth of 4.1%, driven by a 3.6% increase in average room rate and a 0.5% uplift in occupancy. This performance was largely as a result of a stong first half performance, driven by an influx of overseas visitors due to the devaluation of Pound Sterling, which made the UK market more attractive and affordable.
In the Greater London hotel market, the supply of hotel rooms increased by 3.1%, slightly below the 3.4% increase in demand. RevPAR increased by 4.4% to GBP121.7, driven by a 4.1% growth in average room rate and a 0.3% increase in occupancy to 81.7%.
In Nottingham, the overall market saw RevPAR decline by 1.5% due to a 1.6% decline in average room rate and a 0.1% decline in occupancy. The Leeds hotel market reported a 6.8% decline in RevPAR to GBP60.7, driven by a 5.5% reduction in average room rate and a 1.4% decline in occupancy.
* STR Global, December 2017
THE NETHERLANDS
Hotel operations
Reported in GBP(1) Reported in local
(GBP) currency Euro (EUR)
----------------------------- -----------------------------
Year ended Year ended Year ended Year ended
31 Dec 2017 31 Dec 2016 31 Dec 2017 31 Dec 2016
-------------- --------------- ------------ --------------- ------------
GBP48.3 EUR59.0
Total revenue GBP47.3 million million EUR54.1million million
-------------- --------------- ------------ --------------- ------------
GBP14.8 EUR18.1
EBITDAR GBP13.4 million million EUR15.3 million million
-------------- --------------- ------------ --------------- ------------
GBP14.6 EUR17.9
EBITDA GBP13.3 million million EUR15.2 million million
-------------- --------------- ------------ --------------- ------------
Occupancy 85.6% 83.3% 85.6% 83.3%
-------------- --------------- ------------ --------------- ------------
Average room
rate GBP112.2 GBP104.4 EUR128.2 EUR127.4
-------------- --------------- ------------ --------------- ------------
RevPAR GBP96.0 GBP87.0 EUR109.7 EUR106.1
-------------- --------------- ------------ --------------- ------------
GBP35.6 EUR43.4
Room revenue GBP35.0 million million EUR39.9 million million
-------------- --------------- ------------ --------------- ------------
(1) Average exchange rate from Euro to Pound Sterling for year to December 2017 was 1.14 and for the year to December 2016 was1.22, representing a 6.4% increase.
Performance
The performance of the region was impacted due to the disruption in the period associated with the extensive renovation programme which limited the number of rooms, meeting rooms and food and beverage outlets in operation.
At Park Plaza Victoria Amsterdam, approximately half of the room inventory was temporarily closed and all the public areas, restaurants, bars and meeting rooms were renovated in phases.
At Park Plaza Vondelpark, Amsterdam one of the three buildings which comprised the hotel was sold, which reduced the room count by 36 rooms. Extensive renovation works are expected to commence in the second half of 2018 on the remaining two buildings.
In local currency, total revenue reduced by 8.3% to EUR54.1 million (2016: EUR59.0 million), due to the disruption detailed above. However, RevPAR increased by 3.4%, driven by a 0.6% increase in average room rate and a 230 bps increase in occupancy. Room revenue decreased by 8.0%, reflecting the reduced number of rooms in operation.
In Pound Sterling, reported EBITDAR reduced by 9.4% to GBP13.4 million and EBITDA declined by 9.2% to GBP13.3 million. In Euros, EBITDAR and EBITDA reduced by 15.2% and 15.0% respectively again affected by the disruption due to the renovation works.
In Amsterdam, Park Plaza Amsterdam Airport and Park Plaza Vondelpark, Amsterdam both outperformed their competitive sets in terms of occupancy.
Outside of Amsterdam, Park Plaza Utrecht and Park Plaza Eindhoven both significantly outperformed their competitive sets in respect of average room rate, occupancy and RevPAR.
Portfolio update
The extensive renovation works at Park Plaza Victoria Amsterdam were significantly progressed during the period and a new restaurant concept at the hotel is due to be launched in the first half of 2018. Further renovation works are expected to commence in 2018 at Park Plaza Vondelpark, Amsterdam and Park Plaza Utrecht with room renovations and the redevelopment of public areas.
The Dutch hotel market*
The overall performance of the Dutch hotel market was driven by its key market, Amsterdam.
In Greater Amsterdam, RevPAR grew by 10.4% to EUR117.3, driven by a 6.0% improvement in average room rate to EUR143.9 and a 4.1% uplift in occupancy to 81.5%.
Outside of Amsterdam, hotels in Utrecht reported a 10.1% increase in RevPAR to EUR76.5, as a result of a 4.9% increase in average room rate to EUR103.4 and a 5.0% improvement in occupancy to 74.0%.
In contrast, the Eindhoven hotel market saw RevPAR decline by 4.6% to EUR49.1, reflecting a decline in average room rate and occupancy of 2.0% and 2.6% respectively.
* STR Global, December 2017
GERMANY AND HUNGARY
Hotel operations
Reported in GBP(1) Reported in local
(GBP) currency Euro (EUR)
------------------------------- -------------------------------
Year ended Year ended Year ended Year ended
31 Dec 2017 31 Dec 2016 31 Dec 2017 31 Dec 2016
-------------- --------------- -------------- --------------- --------------
GBP25.0 EUR30.5
Total revenue GBP30.7 million million EUR35.1 million million
-------------- --------------- -------------- --------------- --------------
EBITDAR GBP9.0 million GBP7.0 million EUR10.3 million EUR8.6 million
-------------- --------------- -------------- --------------- --------------
EBITDA GBP4.3 million GBP0.9 million EUR5.0 million EUR1.1 million
-------------- --------------- -------------- --------------- --------------
Occupancy 75.4% 70.9% 75.4% 70.9%
-------------- --------------- -------------- --------------- --------------
Average room
rate GBP82.5 GBP69.7 EUR94.2 EUR85.0
-------------- --------------- -------------- --------------- --------------
RevPAR GBP62.2 GBP49.4 EUR71.1 EUR60.3
-------------- --------------- -------------- --------------- --------------
GBP19.1 EUR23.2
Room revenue GBP23.9 million million EUR27.3 million million
-------------- --------------- -------------- --------------- --------------
Like-for-like(2) in Like-for-like(2)
GBP (GBP) in local currency
Euro (EUR)
------------------------------- -------------------------------
Year ended Year ended Year ended Year ended
31 Dec 2017 31 Dec 2016 31 Dec 2017 31 Dec 2016
-------------- --------------- -------------- --------------- --------------
GBP23.9 EUR29.1
Total revenue GBP28.4 million million EUR32.4 million million
-------------- --------------- -------------- --------------- --------------
EBITDAR GBP8.4 million GBP6.8 million EUR9.6 million EUR8.3 million
-------------- --------------- -------------- --------------- --------------
EBITDA GBP4.2 million GBP3.0 million EUR4.8 million EUR3.7 million
-------------- --------------- -------------- --------------- --------------
Occupancy 77.3% 71.0% 77.3% 71.0%
-------------- --------------- -------------- --------------- --------------
Average room
rate GBP79.6 GBP71.6 EUR90.7 EUR87.4
-------------- --------------- -------------- --------------- --------------
RevPAR GBP61.5 GBP50.8 EUR70.1 EUR62.0
-------------- --------------- -------------- --------------- --------------
GBP18.2 EUR22.2
Room revenue GBP22.0 million million EUR25.1 million million
-------------- --------------- -------------- --------------- --------------
(1) Average exchange rate from Euro to Pound Sterling for the year to December 2017 was 1.14 and for the year to December 2016 was 1.22, representing a 6.4% decrease.
(2) The like-for-like figures for the 12 months ended 31 December 2017 exclude Park Plaza Nuremberg for the first five months of 2017. Furthermore, the like-for-like comparison figures for the 12 months ended 31 December 2016 have been adjusted to exclude Park Plaza Prenzlauer Berg Berlin (the lease of which was terminated on 30 June 2016). The like-for-like comparisons for 2017 and 2016 exclude the rent expenses for art'otel berlin kudamm and art'otel cologne (two months of rent expenses in 2017 vs 12 months in 2016).
Performance
The performance of operations in Germany and Hungary improved significantly year-on year. Reported total revenue increased by 23% to GBP30.7 million (2016: GBP25.0 million) and in local currency, total revenue improved by 15.2% to EUR35.1 million.
In local currency, RevPAR increased by 18.0% to EUR71.1, driven by a 10.8% improvement in average room rate and a 460 bps increase in occupancy to 75.4%. The main driver for this growth was the first full year contribution from Park Plaza Nuremberg, which opened in June 2016, and an improvement in the trading environment. Furthermore, in 2016 several hotels were undergoing renovation projects providing a softer year-on-year comparative.
On a like-for-like(2) basis, total revenue increased by 18.9% to GBP28.4 million (2016: GBP23.9 million), benefiting from better trading conditions. In local currency, like-for-like total revenue was up 11.1% to EUR32.4 million (2016: EUR29.1 million).
Reported EBITDAR increased by 27.8% to GBP9.0 million (2016: GBP7.0 million), and by 22.6% on a like-for-like basis to GBP8.4 million (2016: GBP6.8 million).
Reported EBITDA improved by 378.6% to GBP4.3 million (2016: GBP0.9 million), primarily due to the first-time contribution of Park Plaza Nuremberg, the reduction of rental payments associated with the acquisition of two properties formerly under operating leases and improved trading.
In Germany, Park Plaza Nuremberg performed particularly well during its first full year of operation, outperforming its competitive set in terms of occupancy and average room rate. In Hungary, art'otel budapest significantly outperformed its competitive set in occupancy, average room rate and RevPAR key metrics.
Portfolio update
Renovation projects at several hotels have been identified and are under review in order to ensure consistency of hotel quality and guest experience. At art'otel cologne, plans are being finalised for renovation of the restaurant and the bar and lobby area. At art'otel berlin kudamm, the restaurant, bar
and approximately half of the room inventory is expected to be renovated during 2018.
To further enhance guest experience, a complimentary smartphone specifically designed for hotel guests was piloted at all Park Plaza branded properties in Croatia during 2017. Following the successful trial, this service will be rolled out across all German and Hungarian hotels, starting with art'otel berlin mitte and Park Plaza Wallstreet Berlin Mitte.
The German and Hungarian hotel markets*
The hotels in Berlin saw RevPAR increase by 2.0% to EUR73.9, driven by a 2.3% improvement in average room rate. Occupancy declined by 0.3%.
In Cologne, the hotel market reported an improved performance. RevPAR grew by 11.5% to EUR86.7, due to an 8.6% improvement in average room rate to EUR117.6 and a 2.6% improvement in occupancy to 73.2%.
RevPAR in the Dresden hotel market rose by 8.4% to EUR53.1, reflecting a 2.1% improvement in average room rate and a 6.1% uplift in occupancy.
In Hungary, the performance of the Budapest market continued to improve, with RevPAR up 15.5% to EUR65.3. Average room rate increased by 12.1% and occupancy rose by 3.0%
CROATIA
Reported in GBP(1) Reported in local
(GBP) currency HRK
----------------------------- --------------------------
Year ended Year ended Year ended Year ended
31 Dec 2017 31 Dec 2016 31 Dec 2017 31 Dec 2016
-------------- --------------- ------------ ------------ ------------
Total revenue GBP56.3 million GBP46.4 HRK 479.8 HRK 425.7
million million million
-------------- --------------- ------------ ------------ ------------
EBITDAR GBP19.7 million GBP19.8 HRK 168.0 HRK 181.8
million million million
-------------- --------------- ------------ ------------ ------------
EBITDA GBP18.7 million GBP18.9 HRK 159.1 HRK 173.6
million million million
-------------- --------------- ------------ ------------ ------------
Occupancy 61.8% 61.2% 61.8% 61.2%
-------------- --------------- ------------ ------------ ------------
Average room GBP92.2 GBP81.3 HRK 785.6 HRK 746.4
rate
-------------- --------------- ------------ ------------ ------------
RevPAR GBP57.0 GBP49.8 HRK 485.8 HRK 457.0
-------------- --------------- ------------ ------------ ------------
Room revenue GBP32.5 million GBP26.5 HRK 277.0 HRK 243.2
million million million
-------------- --------------- ------------ ------------ ------------
Like-for-like in GBP(1,2) Like-for-like(2) in
(GBP) local currency HRK
----------------------------- --------------------------
Year ended Year ended Year ended Year ended
31 Dec 2017 31 Dec 2016 31 Dec 2017 31 Dec 2016
-------------- --------------- ------------ ------------ ------------
Total revenue GBP56.3 million GBP47.8 HRK 479.8 HRK 438.7
million million million
-------------- --------------- ------------ ------------ ------------
EBITDAR GBP19.7 million GBP16.9 HRK 168.0 HRK 154.8
million million million
-------------- --------------- ------------ ------------ ------------
EBITDA GBP18.7 million GBP15.7 HRK 159.1 HRK 143.9
million million million
-------------- --------------- ------------ ------------ ------------
Occupancy 61.8% 57.5% 61.8% 57.5%
-------------- --------------- ------------ ------------ ------------
Average room GBP92.2 GBP79.1 HRK 785.6 HRK 726.2
rate
-------------- --------------- ------------ ------------ ------------
RevPAR GBP57.0 GBP45.5 HRK 485.8 HRK 417.6
-------------- --------------- ------------ ------------ ------------
Room revenue GBP32.5 million GBP27.3 HRK 277.0 HRK 251.0
million million million
-------------- --------------- ------------ ------------ ------------
(1) Average exchange rate from Croatian Kuna to Pound Sterling for year to December 2017 was 0.12 and for the year to December 2016 was 0.11, representing a 7.0% increase.
(2) The like-for-like comparison figures for 31 December 2016 have been adjusted to include the performance of the Croatian operation in the first quarter of 2016.
Performance
Reported total revenue for the Croatian operations improved by 21.4% to GBP56.3 million (2016: GBP46.4 million).
On a like-for-like basis total revenue increased by 17.8%, reflecting a record trading performance during the peak summer months and the devaluation of Pound Sterling against the Croatian Kuna.
In local currency, the like-for-like total revenue improved by 9.4%. RevPAR increased by 16.4% to HRK 485.8 (2016: HRK 417.6), mainly driven by an 8.2% increase in average room rate along with a 434 bps improvement in occupancy to 61.8%.
In Pound Sterling, like-for-like EBITDA increased by 19.1% to GBP18.7 million, reflecting improved trading across the portfolio and a currency exchange benefit.
Operations in Croatia are highly seasonal with the majority of guest visits occurring from June to September. Most of the hotels open and commence trading around the Easter period and close by mid-October.
Portfolio update
Ahead of the summer season, the Group invested in a number of renovation projects, including the total refurbishment of the rooms and public areas at Hotel Holiday in Medulin. Following these refurbishments, the hotel reported improved trading in the summer season.
At Park Plaza Belvedere Medulin, which is a sports-orientated hotel with facilities especially tailored to cater for sports teams and professionals, two artificial football pitches were constructed in addition to the four grass pitches already in place.
All these pitches have received FIFA Quality Pro accreditation. A third outdoor swimming pool was also added to the hotel. Due to its excellent geographical location and climate, Croatia is the ideal European destination for sports teams of all ages and levels, and Park Plaza Belvedere Medulin is ideally suited for sporting needs. The hotel is open all year around and is used for sports training outside of the peak period.
Planning and designs for the major renovation of Hotel Brioni, a hotel located within the Punta Verudela area of Pula, are being finalised. This will reposition the property as an upper upscale Park Plaza branded hotel. An update on the commencement of works will be provided in due course.
The Croatian hotel market
Croatia experienced a marked increase in visitors in 2017 compared with 2016 which generated considerable organic growth for our operations in the territory. Year-on-year tourism in Croatia has continued to increase.
This growth has been supported by an increased number of airlines flying into Pula International Airport, with 16 carriers now offering direct flights from airports such as London Heathrow, Milan and Basel, which are key target markets for visitors to Croatia.
In addition, many festivals such as the Pula Film Festival and the International Pula Bridge Festival, together with sporting events such as the Ironman 70.3 competition and the Arena Cup international football tournament, attracted visitors to the region.
MANAGEMENT AND CENTRAL SERVICES
Management and Holding Operations
Reported in GBP (GBP)
------------------------------------
Year ended Year ended
31 Dec 2017 31 Dec 2016(1)
----------------- -----------------
Total revenue before GBP42.4 million GBP29.2 million
elimination
--------------------- ----------------- -----------------
Revenues within the GBP(37.4 million) GBP(24.8) million
consolidated Group
--------------------- ----------------- -----------------
External and reported GBP5.0 million GBP4.4 million
revenue
--------------------- ----------------- -----------------
EBITDA GBP10.5 million GBP8.6 million
--------------------- ----------------- -----------------
(1) These numbers have been amended to reflect a reclassification of the central services presented in the Croatian segment in the period ended 31 December 2016
Our performance
Revenues in this segment are primarily management, sales, marketing and franchise fees and other charges for central services.
These are predominantly charged within the Group and therefore eliminated upon consolidation. The segment shows a positive EBITDA as management fees that are charged, both internal and external, exceed the costs in this segment.
Management, marketing and franchise fees are calculated as a percentage of revenues and profit, therefore these are affected by underlying hotel performance.
Revenues in the year increased primarily as a result of new openings, improved performance of the hotels and centralising services that are recharged.
Boris Ivesha
President & Chief Executive Officer
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December
---------------------------------------------
2017 2016
GBP'000 GBP'000
---------------------------------------------------- ---------------------- ---------------------
Assets
Non-current assets:
Intangible assets 23,570 25,158
Property, plant and equipment 1,158,442 1,069,702
Investment in joint ventures 18,727 18,409
Other non-current assets 18,828 3,090
Restricted deposits and cash 500 5,235
Deferred income tax asset 147 713
---------------------------------------------------- ---------------------- ---------------------
1,220,214 1,122,307
---------------------------------------------------- ---------------------- ---------------------
Current assets:
Restricted deposits and cash 25,561 25,513
Inventories 2,701 2,412
Trade receivables 13,392 12,576
Other receivables and prepayments 12,446 10,370
Other current financial assets 24,711 -
Cash and cash equivalents 241,021 144,732
---------------------------------------------------- ---------------------- ---------------------
319,832 195,603
---------------------------------------------------- ---------------------- ---------------------
Total assets 1,540,046 1,317,910
---------------------------------------------------- ---------------------- ---------------------
Equity and liabilities
Equity:
Issued capital - -
Share premium 129,878 129,527
Treasury shares (3,636) (3,208)
Foreign currency translation reserve 18,816 14,450
Hedging reserve (302) (895)
Accumulated earnings 198,589 159,755
---------------------------------------------------- ---------------------- ---------------------
Attributable to equity holders of the parent 343,345 299,629
Non-controlling interests 97,593 30,573
---------------------------------------------------- ---------------------- ---------------------
Total equity 440,938 330,202
---------------------------------------------------- ---------------------- ---------------------
Non-current liabilities:
Borrowings 666,936 642,120
Provision for litigation 3,659 3,392
Provision for concession fee on land 3,591 2,885
Financial liability in respect of Income Units sold
to private investors 131,632 133,983
Other financial liabilities 192,792 22,979
Deferred income taxes 7,394 9,345
---------------------------------------------------- ---------------------- ---------------------
1,006,004 814,704
---------------------------------------------------- ---------------------- ---------------------
Current liabilities:
Trade payables 12,843 10,754
Other payables and accruals 47,314 43,959
Borrowings 32,947 118,291
---------------------------------------------------- ---------------------- ---------------------
93,104 173,004
---------------------------------------------------- ---------------------- ---------------------
Total liabilities 1,099,108 987,708
---------------------------------------------------- ---------------------- ---------------------
Total equity and liabilities 1,540,046 1,317,910
---------------------------------------------------- ---------------------- ---------------------
Date of approval of the financial statements 27 February 2018. Signed on behalf of the Board by Boris Ivesha and Daniel Kos.
CONSOLIDATED INCOME STATEMENT
Year ended 31 December
2017 2016
GBP'000 GBP'000
------------------------------------------------ -------------- -------------
Revenues 325,118 272,470
Operating expenses (209,092) (169,491)
------------------------------------------------ -------------- -------------
EBITDAR 116,026 102,979
Rental expenses (8,722) (8,844)
------------------------------------------------ -------------- -------------
EBITDA 107,304 94,135
Depreciation and amortisation (34,288) (25,330)
------------------------------------------------ -------------- -------------
EBIT 73,016 68,805
Financial expenses (31,966) (27,220)
Financial income 1,815 2,559
Other expenses (1,503) (27,195)
Other income 1,351 33,700
Net expenses for financial liability in respect
of Income Units sold to private investors (10,666) (10,680)
Share in result of associate and joint ventures (350) (1,750)
------------------------------------------------ -------------- -------------
Profit before tax 31,697 38,219
Income tax expense (1,748) (62)
------------------------------------------------ -------------- -------------
Profit for the year 29,949 38,157
------------------------------------------------ -------------- -------------
Profit attributable to:
Equity holders of the parent 24,271 35,117
Non-controlling interests 5,678 3,040
29,949 38,157
Basic and diluted earnings per share (in Pound
Sterling) 0.57 0.83
------------------------------------------------ -------------- -------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 December
----------------------------------
2017 2016
GBP'000 GBP'000
----------------------------------- ---------------- ----------------
Profit for the year 29,949 38,157
----------------------------------- ---------------- ----------------
Other comprehensive income
(loss) to be recycled through
profit and loss in subsequent
periods(1) :
Profit (loss) from cash flow
hedges 593 (1,537)
Reclassification to the income
statement of cash flow hedge
results upon discontinuation
of hedge accounting - 15,586
Foreign currency translation
adjustments of foreign operations 9,996 35,844
Reclassification to the income
statement of currency translation
adjustments upon the Croatian
acquisition - 250
Foreign currency translation
adjustment of associate and
joint ventures - 15
----------------------------------- ---------------- ----------------
Other comprehensive income 10,589 50,158
----------------------------------- ---------------- ----------------
Total comprehensive income 40,538 88,315
----------------------------------- ---------------- ----------------
Total comprehensive income
attributable to:
Equity holders of the parent 33,175 83,006
Non-controlling interests 7,363 5,309
----------------------------------- ---------------- ----------------
40,538 88,315
----------------------------------- ---------------- ----------------
(1) There is no other comprehensive income that will not be reclassified to the profit and loss in subsequent periods.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Foreign Attributable
currency to equity
Issued Share Other Treasury translation Hedging Accumulated holders of Non-controlling Total
In GBP'000 capital(1) premium reserves shares reserve reserve earnings the parent interests equity
-------------------------- ---------- ------- -------- -------- ----------- -------- ----------- ------------ --------------- --------
Balance as
at
1 January
2016 - 129,140 - (3,208) (19,449) (14,944) 176,365 267,904 - 267,904
-------------------------- ---------- ------- -------- -------- ----------- -------- ----------- ------------ --------------- --------
Profit for
the year - - - - - - 35,117 35,117 3,040 38,157
Other comprehensive
loss for
the year - - - - 33,840 14,049 - 47,889 2,269 50,158
-------------------------- ---------- ------- -------- -------- ----------- -------- ----------- ------------ --------------- --------
Total comprehensive
income - - - - 33,840 14,049 35,117 83,006 5,309 88,315
Issue of
shares - 387 - - - - - 387 - 387
Dividend
distribution - - - - - (50,637) (50,637) - (50,637)
Acquisition
of a subsidiary - - - - - - - - 19,054 19,054
Transactions
with
non-controllinginterests - - - - - - (1,031) (1,031) 6,210 5,179
Balance as
at 31 December
2016 - 129,527 - (3,208) 14,391 (895) 159,814 299,629 30,573 330,202
-------------------------- ---------- ------- -------- -------- ----------- -------- ----------- ------------ --------------- --------
Profit for
the year - - - - - - 24,271 24,271 5,678 29,949
Other comprehensive
income loss
for the year - - - - 8,311 593 - 8,904 1,685 10,589
-------------------------- ---------- ------- -------- -------- ----------- -------- ----------- ------------ --------------- --------
Total comprehensive
income - - - - 8,311 593 24,271 33,175 7,363 40,538
Issue of
shares - 242 - - - - - 242 - 242
Share-based
payments - 109 - - - - - 109 - 109
Purchase
of own shares - - - (428) - - - (428) - (428)
Dividend
Distribution(2) - - - - - - (9,290) (9,290) - (9,290)
Acquisition
of a subsidiary - - - - - - - - - -
Transactions
with non-controlling
interests - - - - (3,886) - 23,794 19,908 59,657 79,565
Balance as
at
31 December
2017 - 129,878 - (3,636) 18,816 (302) 198,589 343,345 97,593 440,938
-------------------------- ---------- ------- -------- -------- ----------- -------- ----------- ------------ --------------- --------
(1) No par value.
(2) The dividend distribution compromises a final dividend for the year ended 31 December 2016 (31 December 2015: 10.0 pence per share) and an interim dividend of 11.0 pence per share paid in 2017 (2016: 10.0 pence per share, additionally a special dividend of 100.0 pence per share was paid during 2016).
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31
December
--------------------
2017 2016
GBP'000 GBP'000
--------------------------------------------- --------- ---------
Cash flows from operating activities:
Profit for the year 29,949 38,157
Adjustment to reconcile profit to
cash provided by operating activities:
Financial expenses and expenses for
financial liability in respect of
Income Units sold to private investors 42,644 37,900
Financial income (1,579) (2,404)
Income tax charge 1,748 62
Loss on buy back of Income Units sold
to private investors 721 372
Gain on Croatian acquisition - (26,195)
Refinance expenses - 23,397
Income from forfeited deposits - (6,543)
Capital gain (1,351) -
Gain from marketable securities (124) -
Share in results of joint ventures 350 279
Share in loss of associates - 1,471
Fair value adjustment of derivatives (112) (155)
Depreciation and amortisation 34,288 25,330
Share-based payments 109 -
--------------------------------------------- --------- ---------
76,694 53,514
--------------------------------------------- --------- ---------
Changes in operating assets and liabilities:
Decrease (increase) in inventories (216) 88
(Increase) in trade and other receivables (1,801) (6,757)
(Decrease) increase in trade and other
payables 9,019 (6,146)
--------------------------------------------- --------- ---------
7,002 (12,815)
--------------------------------------------- --------- ---------
Cash paid and received during the
period for:
Interest paid (43,323) (38,642)
Interest received 203 1,338
Taxes (paid) received (676) 33
--------------------------------------------- --------- ---------
(43,796) (37,271)
--------------------------------------------- --------- ---------
Net cash provided by operating activities 69,849 41,585
--------------------------------------------- --------- ---------
Cash flows from investing activities:
Investments in property, plant and
equipment (107,044) (87,298)
Investments in jointly controlled
entities and loans to partners in
jointly controlled entities - (426)
Proceeds from sale of property 7,146 -
Purchase of Park Plaza County Hall
London units (16,283) -
Decrease (Increase) in restricted
cash 5,375 (4,786)
Increase in marketable securities,
net (24,586) -
Collection of loans to related parties - 13,197
Cash outflows for the Croatian acquisition - (22,030)
--------------------------------------------- --------- ---------
Net cash used in investing activities (135,392) (101,343)
--------------------------------------------- --------- ---------
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
Year ended 31
December
--------------------
2017 2016
GBP'000 GBP'000
------------------------------------------ --------- ---------
Cash flows from financing activities:
Issuance of shares upon exercise of
options 242 387
Purchase of treasury shares (428) -
Proceeds from long-term loans 42,926 614,102
Buy back of Income Units previously
sold to private investors (1,900) (1,366)
Repayment of long-term bank loans
and other long term liabilities (133,108) (419,044)
Net proceeds from transactions with
non-controlling interest 79,565 5,179
Proceeds from sale and leaseback of
Park Plaza London Waterloo 161,596 -
Dividend payment (9,290) (50,630)
Net cash provided by financing activities 159,603 148,628
------------------------------------------ --------- ---------
Increase in cash and cash equivalents 94,060 88,870
Net foreign exchange differences 2,229 5,246
Cash and cash equivalents at beginning
of year 144,732 50,623
------------------------------------------ --------- ---------
Cash and cash equivalents at end of
year 241,021 144,732
------------------------------------------ --------- ---------
Non-cash items:
------------------------------------------ --------- ---------
Outstanding payable on investments
in property, plant and equipment 958 5,155
------------------------------------------ --------- ---------
APPIX
Selected notes to consolidated financial statements
Note 1:
a. The consolidated financial statements of PPHE Hotel Group Limited (the 'Company') and its subsidiaries (together the 'Group') for the year ended 31 December 2017 were authorised for issuance in accordance with a resolution of the Directors on 27 February 2017.
b. Description of business and formation of the Company:
The Company was incorporated and registered in Guernsey on 14 June 2007. The shares of the Company are publicly traded.
The Company's primary activity is owning, co-owning, leasing, developing, operating and franchising full-service upscale, upper upscale and lifestyle hotels in major gateway cities, regional centres and select resort destinations, predominantly in Europe.
The Group has interests in hotels in the United Kingdom, the Netherlands, Germany, Hungary and hotels, self-catering apartment complexes and campsites in Croatia.
c. Assessment of going concern:
As part of their ongoing responsibilities, the Directors have recently undertaken a thorough review of the Group's cash flow forecast and potential liquidity risks. Detailed budgets and cash flow projections have been prepared for 2018 and 2019 which show that the Group's hotel operations will be cash generative during the period. The Directors have determined that the Company is likely to continue in business for least 12 months from the date of the consolidated financial statements.
The Group has entered into a number of loan facilities, the details of which are set out in Note 15 of the Annual Report and Accounts 2017. The Board believes that the Group currently has adequate resources and in the future will generate sufficient funds to honour its financial obligations and continue its operations as a going concern for the foreseeable future. The Group analyses its ability to comply with debt covenants in the near future.
Note 2: Earnings per share
The following reflects the income and share data used in the basic earnings per share computations:
Year ended 31
December
--------------------
2017 2016
GBP'000 GBP'000
------------------------------ --------- ---------
Profit of equity holders of
the parent 24,271 35,117
------------------------------ --------- ---------
Weighted average number of
Ordinary shares outstanding 42,249 42,173
------------------------------ --------- ---------
Potentially dilutive instruments 127,312 in 2017 (2016: 227,000) had an immaterial effect on the basic earnings per share.
Note 3 Segments
For management purposes, the Group's activities are divided into Owned Hotel Operations and Management Activities. Owned Hotel Operations are further divided into four reportable segments: the Netherlands, Germany and Hungary, Croatia and the United Kingdom. The operating results of each of the aforementioned segments are monitored separately for the purpose of resource allocations and performance assessment. Segment performance is evaluated based on EBITDA, which is measured on the same basis as for financial reporting purposes in the consolidated income statement.
Year ended 31 December 2017
--------------------------------------------------------------------------
Holding
companies
Germany United and
The Netherlands and Hungary Kingdom Croatia Management Adjustments(*) Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- --------------- ------------ -------- -------- ---------- -------------- ------------
Revenue
Third party 47,323 30, 720 185,780 56,303 4,992 - 325,118
Inter-segment - - - - 37, 387 (37,387)
--------------- --------------- ------------ -------- -------- ---------- -------------- ------------
Total revenue 47,323 30,720 185,780 56,303 42,379 (37,387) 325,118
--------------- --------------- ------------ -------- -------- ---------- -------------- ------------
Segment EBITDA 13,285 4,345 60,464 18,670 10,540 - 107,304
--------------- --------------- ------------ -------- -------- ---------- -------------- ------------
Depreciation,
amortisation
and impairment - - - - - - (34,288)
Financial
expenses - - - - - - (31,966)
Financial
income - - - - - - 1,815
Net expenses
for liability
in respect
of Income
Units
sold to
private
investors - - - - - - (10,666)
Other income,
net - - - - - - (152)
Share in loss
of associate
and joint
ventures - - - - - - (350)
--------------- --------------- ------------ -------- -------- ---------- -------------- ------------
Profit before
tax - - - - - - 31,697
--------------- --------------- ------------ -------- -------- ---------- -------------- ------------
Holding
Germany companies
and United and
The Netherlands Hungary Kingdom Croatia Adjustments(*) Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- --------------- ---------------------- -------- ---------- -------------- ------------
Geographical information Non-Current assets(*) 194,749 77,589 730,026 152,817 26,831 1,182,012 --------------- --------------- ---------------------- -------- ---------- -------------- ------------
* Non-current assets for this purpose consists of property, plant and equipment and intangible assets.
Year ended 31 December 2016
---------------------------------------------------------------------------
Holding
companies
Germany United and
The Netherlands and Hungary Kingdom Croatia Management Adjustments(*) Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- --------------- ------------ -------- -------- ---------- --------------- ------------
Revenue
Third party 48,342 24,978 148,692 46,089 4,369 - 272,470
Inter-segment - - - - 24,838 (24,838) -
-------------------- --------------- ------------ -------- -------- ---------- --------------- ------------
Total revenue 48,342 24,978 148,692 46,089 29,207 (24,838) 272,470
-------------------- --------------- ------------ -------- -------- ---------- --------------- ------------
Segment EBITDA 14,637 908 51,147 16,764 10,679 - 94,135
-------------------- --------------- ------------ -------- -------- ---------- --------------- ------------
Depreciation,
amortisation
and impairment - - - - - - (25,330)
Financial expenses - - - - - - (27,220)
Financial income - - - - - - 2,559
Net expenses
for liability
in respect
of Income Units
sold to private
investors - - - - - - (10,680)
Other income,
net - - - - - - 6,505
Share in loss
of associate
and joint ventures - - - - - - (1,750)
-------------------- --------------- ------------ -------- -------- ---------- --------------- ------------
Profit before
tax - - - - - - 38,219
-------------------- --------------- ------------ -------- -------- ---------- --------------- ------------
(*) Consist of inter-company eliminations.
Germany Holding companies
and United and
The Netherlands Hungary Kingdom Croatia Adjustments(*) Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------------- -------- -------- -------- ----------------- ------------
Geographical information
Non-Current assets(*) 183,784 25,508 712,338 145,732 27,498 1,094,860
------------------------- --------------- -------- -------- -------- ----------------- ------------
* Non-current assets for this purpose consists of property, plant and equipment and intangible assets.
Note 4: Related parties
Significant other transactions with related parties
a. Balances with related parties
Year ended 31
December
--------------------
2017 2016
GBP'000 GBP'000
---------------------------- --------- ---------
Loans to joint ventures 17,582 17,045
Short-term receivables 669 178
Construction liability WW
Gear Construction Limited 958 5,155
---------------------------- --------- ---------
b. Transactions with related parties
Year ended 31
December
--------------------
2017 2016
GBP'000 GBP'000
------------------------------- --------- ---------
Construction charges - WW
Gear Construction Limited
(see (i) below) 15,908 51,099
GC Project Management Limited 3,700 -
Interest from associate -
WH/DMREF Bora B.V. - 651
Interest from Red Sea Hotels
Limited(1) - 1,128
Interest income from jointly
controlled entities 407 415
------------------------------- --------- ---------
(1) This relates to a receivable with a nominal value of Thai Baht 600 million relating to the disposal of the site in Pattaya, Thailand. The loan was paid during 2016.
c. Significant other transactions with related parties
(i) On 18 June 2014, Waterloo Hotel Holding B.V. entered into a building contract with WW Gear Construction Limited ('Gear'), a related party, for the design and construction of Park Plaza London Waterloo on a 'turn-key' basis. The basic contract price payable to Gear was approximately GBP70.5 million for 494 rooms.
On 1 August 2014, Riverbank Hotel Holding B.V. entered into a building contract with Gear for a six-storey extension to Park Plaza London Riverbank. The basic contract price payable to Gear was approximately GBP24.7 million for the 148-room extension.
On 23 December 2014, Park Royal entered into a building contract with Gear for the construction of the 166-room Park Plaza London Park Royal. The basic contract price payable to Gear was approximately GBP16.5 million. On 4 February 2016, the parties agreed to vary the agreement to incorporate additional works, extend the completion date and increase the contract sum. The additional works included an extra 44 rooms, a new access road and reinstatement of a higher specification, amongst others. In addition, the basic contract price was increased to approximately GBP24.4 million.
In June 2016, Riverbank Hotel Holding B.V. entered into a building contract with Gear for refurbishment works to the existing public areas at Park Plaza London Riverbank. The basic contract price under the building contract was approximately GBP6.7 million.
The Directors of the Company are of the opinion that the aforementioned building contracts were entered into on arm's length terms and are in the interests of the Group. Gear is a company in whose shares the Chairman of the Company and certain members of his family are interested. Under the relationship agreement entered into between Euro Plaza Holdings B.V. ('Euro Plaza'), the principal shareholder of the Company (in whose shares the Chairman and certain members of his family are interested) and the Company, transactions between the Company and Euro Plaza (and its associates, which include Gear) are required to be on arm's length terms.
(ii) In September 2016, the Company received the amounts outstanding in a loan to Red Sea Hotels Limited, due from the disposal of the project in Pattaya, in the amount of Thai Baht 600 million.
(iii) The Group had engaged Gear to provide certin pre-construction and project management services in connection with the ongoing refurbishments and major renovations across the Group's hotels in the UK and the Netherlands. The total fees paid in 2017 was GBP3.7 milllion.
(iv) Transactions in the ordinary course of business, in connection with the use of hotel facilities (such as overnight room stays and food and beverages) are being charged at market prices. These transactions occur occasionally.
(v) Compensation to key management personnel (Executive and Non-Executive Directors) for the year ended 31 December 2017:
Base
salary Pension Other
and fees contributions benefits Total
GBP'000 Bonus GBP'000 GBP'000 GBP'000
------------------------ --------- ----- -------------- --------- --------
Chairman and Executive
Directors 773 150 170 289 1,382
------------------------ --------- ----- -------------- --------- --------
Non-Executive Directors 144 - - 144
------------------------ --------- ----- -------------- --------- --------
917 150 170 289 1,526
------------------------ --------- ----- -------------- --------- --------
Directors' interests in employee share incentive plan
As at 31 December 2017, the Executive Directors held no share options to purchase ordinary shares.
As at 31 December 2016, the Executive Directors held share options to purchase 70,000 ordinary shares. All options were fully exercisable with an exercise price of GBP2.33. No share options were granted to Non-Executive members of the Board.
Directors' responsibility statement
The Board confirms to the best of its knowledge that the Consolidated financial statements, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company and the undertakings included in the consolidation taken as a whole.
The Strategic Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face, and provides information necessary for shareholders to assess the Company's performance, business model and strategies.
Principal risks and uncertainties
Risk and impact Mitigation Grading Year-on-year
------------------------------------- ---------------------------- --------- -------------
Market disruptors
The travel industry The Group invests Medium Unchanged
has changed considerably in areas such as during
in recent years as connectivity to the
a result of changes third parties, year
in travel patterns, distribution and
the emergence of low-cost marketing of its
airlines and online products, e-commerce
travel agents, new and technology.
technologies, and changes The Group further
in customer booking mitigates this
behaviour and travel risk by working
expectations. This closely with Carlson
trend is anticipated Hotels, ensuring
to persist and the that global trends
travel industry is are identified
expected to continue and acted upon
to be impacted by the in a concerted
rise of online travel manner, whilst
agents and other dominant benefiting from
forces such as search the scale, negotiating
engines and social power, knowledge
media networks. The and skills that
Group is exposed to our global partnership
risks such as the dominance brings. Executives
of one such third party and managers regularly
over another, the loss attend seminars,
of control over its workshops and training
inventory and/or pricing to ensure that
and challenges to keep their knowledge
up with developments is kept up to date.
in the market
------------------------------------- ---------------------------- --------- -------------
Information technology
and systems The Group invests High Unchanged
The Group is reliant in appropriate during
on certain technologies IT systems to build the
and systems for the as much operational year
operation of its business. resilience as possible.
Any material disruption Further, a variety
or slowdown in the of security measures
Group's information are implemented
systems, especially in order to maintain
any failures relating the safety of personal
to its reservation customer information.
system, could cause
valuable information
to be lost or operations
to be delayed.
In addition, the Group
and its hotels maintain
personal customer data,
which is shared with
and retained by the
Group's partners. Such
information may be
misused by employees
of the Group or its
partners or other outsiders
if there is inappropriate
or unauthorised access
to the relevant information
systems.
------------------------------------- ---------------------------- --------- -------------
Hotel industry risks
The Group's operations Although management High Unchanged
and their results are continually seeks during
subject to a number to identify risks the
of factors that could at the earliest year
adversely affect the opportunity, many
Group's business, many of these risks
of which are common are beyond the
to the hotel industry control of the
and beyond the Group's Group. The Group
control, such as global has in place contingency
economic uncertainties, and recovery plans
political instabilities, to enable it to
(and due to the significant respond to major
presence of the Group incidents or crises
in the United Kingdom) and takes steps
uncertainty pertaining to minimise these
to Brexit and an increase exposures to the
in acts of terrorism. greatest extent
The impact of any of possible.
these factors (or a
combination of them)
may adversely affect
sustained levels of
occupancy, room rates
and/or hotel values.
------------------------------------- ---------------------------- --------- -------------
Fixed operating expenses
The Group's operating The Group has appropriate High Increased
expenses, such as personnel management systems during
costs, the impact of in place (such the
the Living Wage in as staff outsourcing) year
the United Kingdom, which are designed
property taxes, operating to create flexibility
leases, information in the operating
technology and telecommunications, cost base so as
are to a large extent to optimise operating
fixed. As such, the profits in volatile
Group's operating results trading conditions.
may be vulnerable to
short-term changes
in its revenues.
------------------------------------- ---------------------------- --------- -------------
The Group's borrowings
The vast majority of The Board monitors Low Decreased
the Group's bank borrowings funding needs regularly. during
are with two banks Financial covenant the
and these financing ratios are monitored year
arrangements contain and sensitised
either cross-collateralisation as part of normal
or cross-default provisions. financial planning
Therefore, there is procedures.
a risk that more than
one property may be
affected by a default
under these financing
arrangements. The Group
is exposed to a variety
of risks associated
with the Group's existing
bank borrowings and
its ability to satisfy
debt covenants. Failure
to satisfy obligations
under any current or
future financing arrangements
could give rise to
default risk and require
the Group to refinance
its borrowings.
The Group uses debt
to partly finance its
property investment.
By doing so, the Group
leverages its investment
and is able to acquire
properties without
raising equity. Leverage
magnifies both gains
and losses, and therefore
the risk of using leverage
is that the loss is
much greater than it
would have been if
the investment had
not been leveraged.
The risk exists that
interest expenses and
default on debt covenants
negatively impact shareholder
value and return.
------------------------------------- ---------------------------- --------- -------------
Risk and impact Mitigation Grading Year
on Year
---------------------------------- ---------------------------- --------- ------------
The exchange rates The Group eliminates
between the functional currency transaction Medium Unchanged
currency of the Group's risk by matching during
subsidiaries operating commitments, cash the
inside the Eurozone, flows and debt year
and the Croatian Kuna in the same currency.
and Pound Sterling After due and careful
(the reporting currency consideration,
for the purposes of the Group decided
the consolidated financial not to hedge this
statements) may fluctuate currency risk.
significantly, affecting
the Group's financial
results. In addition,
the Group may incur
a currency transaction
risk in the event that
one of the Group companies
enters into a transaction
using a currency different
from its functional
currency.
---------------------------------- ---------------------------- --------- ------------
The Park Plaza(R) Hotels
& Resorts brand and
reservation system The Group's rights Unchanged
The Group's rights to use the Park Medium during
to the Park Plaza Hotels Plaza Hotels & the
& Resorts brand stem Resorts brand and year
from a territorial Carlson Hotels'
licence agreement with central reservation
Carlson Hotels, pursuant system are in perpetuity.
to which the Group This unique and
has the exclusive right exclusive partnership
to use (and to sub-license is reinforced by
others to use) the the Group's continued
Park Plaza Hotels & focus on operational
Resorts trademark in efficiency
56 countries within and portfolio growth
the EMEA region. This through its intensified
agreement also allows cooperation with
the Group to use Carlson Carlson Hotels.
Hotels' global central To ensure that
reservation system, the Group's interests
participate in its are represented,
various loyalty schemes several of its
and have access to executives and
global distribution managers participate
channels connected in collaborative
to its central reservation groups initiated
system. Failure to by Carlson Hotels
maintain these rights to discuss, review
could adversely affect and optimise the
the Group's brand recognition collective performance
and its profitability. in areas such as
The Group is also dependent sales, loyalty
on Carlson Hotels to marketing, partnerships,
invest in the further e-commerce and
development of its distribution.
global reservation
system and associated
technologies and infrastructure.
The Park Plaza Hotels
& Resorts outside of
the EMEA region are
managed or franchised
by Carlson Hotels directly,
and failure at its
end to control and
maintain a similar
quality level of hotels
may have a detrimental
effect on the reputation
of the Park Plaza brand
and the hotels operating
under the brand name.
---------------------------------- ---------------------------- --------- --------------
Development projects
The Group has various
ongoing development The Group retains Low Decreased
projects which are an ownership interest during
capital intensive. in the development the
These development projects sites and therefore year
may increase the Group's it is well placed
expenses and reduce to capitalise on
the Group's cash flows any future rises
and revenues. If capital in property prices.
expenditures ('capex') The Group tends
exceed the Group's to enter into fixed
expectations, this price turn-key
excess would have an contracts in respect
adverse effect on the of its developments
Group's available cash. in order
There is a risk that to minimise the
such developments may risk of cost overrun.
not be available on The Group draws
favourable terms, on its previous
that construction may experience in running
not be completed on and managing developments
schedule or within to manage potential
budget, and that the development risks.
property market conditions
are subject to changes
in environmental law
and regulations, zoning
laws, and other governmental
rules and fiscal policies.
---------------------------------- ---------------------------- --------- --------------
Capital required to The Group focuses
maintain product standards heavily on preventative Medium Unchanged
The Group owns and maintenance across during
co-owns many of its its portfolio and the
hotels. As is common employs engineers year
in owning hotels, this and technicians
business model requires to ensure that
capital to maintain its hotels are
the high quality level maintained to a
of the products and high standard.In
facilities offered. addition, as part
In addition to maintenance of its operating
costs and capex, the agreements, the
Group may be exposed Group has capex
to disruptions in revenue reserves for each
if hotels are to be hotel to invest
(part) closed for product in medium to large
improvements. renovations and
replacements of
technical installations.
To minimise short-term
revenue displacements
due to renovations,
the Group develops
- prior to undertaking
such renovations
- detailed renovation
planning programmes
which take into
account factors
such as hotel closures,
phased approaches,
seasonality and
demand patterns.
---------------------------------- ---------------------------- --------- --------------
Employee turnover
The success of the The Group has appropriate Medium Increased
Group's business is systems in place during
partially attributable for recruitment, the
to the efforts and reward and compensation year
abilities of its (senior) and performance
managers and key executives. management. Development
Failure to retain its and maintenance
executive management of a Group culture
team or other key personnel and comprehensive
may threaten the success training programmes
of the Group's operations. and feedback systems
The consistent delivery also play a leading
of high quality service role in minimising
levels depends on the this risk. The
skills and knowledge increased risk
of our teams. A high is due to recruitment
turnover rate may threaten challenges in 2018
the consistent delivery caused by currency
of this service level. exchange rates
(Euro v Pound Sterling)
and Brexit negotiations.
---------------------------------- ---------------------------- --------- --------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR TRMMTMBATTRP
(END) Dow Jones Newswires
February 28, 2018 02:01 ET (07:01 GMT)
1 Year Pphe Hotel Chart |
1 Month Pphe Hotel Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
