PPHE Hotel Group Ltd. reported solid first-half 2026 results on Thursday, with like-for-like revenue increasing 4.7% to £208 million and like-for-like EBITDA rising 8% to £49 million. The group’s EBITDA margin expanded by 50 basis points to 23.5%, while like-for-like revenue per available room (RevPAR) grew 3.1% and average room rates increased 3.2%. Occupancy remained flat at 72.5% year-over-year.
The London-based hotel operator’s rolling 12-month EPRA earnings stood at £53 million, unchanged from the prior period, with EPRA earnings per share steady at £1.25. Free cash flow for the trailing 12 months totaled £76 million, while the board proposed an unchanged interim dividend of 17 pence per share. Net debt rose to £932 million from £775 million at year-end 2025, lifting the group’s loan-to-value ratio to 39.5% from 35%. Average debt maturity extended to 4.4 years at an average interest rate of 4.4%.
Regional performance varied, with the U.K. segment posting a 6.8% revenue increase and 5.2% RevPAR growth. The Netherlands faced headwinds from a VAT hike on hotel bedrooms, which increased from 9% to 21%, contributing to a 5.3% revenue decline in local currency and a 2.4% drop in sterling terms. Germany reported flat like-for-like revenue but a 2.9% increase in sterling terms.
The group completed the buyback of the freehold of the Park Plaza London Waterloo for £147.9 million, funded by a new five-year facility of £136.5 million from Bank Hapoalim at a 70% loan-to-value ratio, amortizing to 65%. The acquisition, which halted EBITDA erosion, was structured with 90% of debt fixed for two years at an all-in interest rate of 5.9%. PPHE also refinanced the Rome art'otel for €27.6 million on a five-year facility. The New York development site was sold for $33.5 million following regulatory changes that rendered the project unviable.
Shares in PPHE fell 4.39% to $1,568 on Thursday, extending a recent decline from a 52-week high of $2,090. The stock has delivered a 33% return over the past year and a 14% gain year-to-date, trading at a dividend yield of 2.16%. The group’s market capitalization stands at $920 million.
Executives highlighted operational challenges in the U.K. market. Greg Hegarty, co-chief executive, noted the difficulty in delivering future shareholder value in the segment, while Daniel Kos, chief financial officer, emphasized the strategic benefit of the Waterloo buyback in halting EBITDA erosion. Robert Henke, executive vice president of commercial, underscored the group’s flexibility in balancing occupancy and rate adjustments based on market conditions.
