PPHE’s FY19 trading update is solid, meaning that management is confident of meeting expectations. FY19 like-for-like (l-f-l) room revenue growth of 6.3% follows 6.7% growth in FY18. At this stage, typically, detailed commentary on the performance at individual country level is limited. Management has indicated that trading is benefiting from the £100m investment programme, and therefore the key drivers of growth in FY19 were London and the Netherlands. FY20 will continue to benefit from the two recently reopened Park Plaza hotels in the Netherlands. Longer-term growth will be driven by the £300m development pipeline, including key projects such as two art’otels in London and one in New York.
PPHE has reported a solid trading update for FY19. The fourth quarter is a seasonally less important quarter than other quarters of the year. Room revenue, which represented c 69% of total group revenue in FY18, grew by 5.9% to £250m in FY19. Therefore, the H219 growth rate for total room revenue of c 5.5% is similar to the 5.8% reported for H119.
With respect to the core KPIs for FY19: l-f-l RevPAR growth of 5.1% to £103.7 compares to 7.5% growth for H119. A lower rate of growth should be expected in H2 given the seasonality of Croatia, where RevPAR is lower than the group average. RevPAR growth comprised l-f-l average room rate growth of 3.4% to £128.5 (4.8% in H119) and l-f-l occupancy growth of 130bp to 80.7% (200bp in H119).
Our forecasts for FY19 and FY20 remain unchanged ahead of the release of the FY19 results on 27 February 2020.