PPHE Hotel Group reported a solid first-half performance for 2026, with like-for-like revenue increasing 4.7% year-over-year to £208 million and EBITDA rising 8% to £49 million. The group’s EBITDA margin expanded by 50 basis points to 23.5%, while like-for-like RevPAR grew 3.1% and average room rates rose 3.2%. Occupancy remained flat at 72.5%, according to the earnings call transcript.
The UK market drove growth, with total revenue up 6.8% and RevPAR increasing 5.2%. Q1 revenue climbed 8.8% on strong demand for large-scale meetings and events, while Q2 revenue grew 5%. Germany showed broadly flat like-for-like revenue but posted 2.9% growth in sterling terms. The Netherlands, however, faced headwinds from a government VAT increase on hotel bedrooms from 9% to 21%, which pressured room rates by 3.4% in local currency and reduced total revenue by 5.3% in sterling terms. The VAT change is expected to cut EBITDA by €1.3 million.
PPHE’s financial position reflected strategic moves, including the buyback of the Park Plaza London Waterloo freehold for £147.9 million, funded by a new five-year facility from Bank Hapoalim. The acquisition, which included £8.1 million in purchase expenses, increased net debt to £932 million as of June 30, up from £775 million at year-end 2025. The group’s average loan-to-value ratio rose to 39.5% from 35%, while the average cost of debt was 4.4% with an average maturity of 4.4 years.
Free cash flow for the rolling 12 months totaled £76 million, primarily allocated to a £17 million interim dividend, £26 million in bank loan repayments, and £33 million in ROI capital expenditures, including freehold acquisitions. The proposed interim dividend of 17 pence per share was unchanged from the prior year. The group’s market capitalization stood at $920 million, with a dividend yield of 2.16%.
Shares in PPHE fell 4.39% to $1,568 following the earnings update, despite a 33% return over the past year and nearly 14% year-to-date performance. The stock has traded within a 52-week range of $1,262 to $2,090, currently sitting 24.9% above its low and 24.9% below its high. InvestingPro assigned the group a financial health score of 3.01 out of 5.
Management also noted the disposal of a New York development site for $33.5 million due to regulatory changes, with proceeds directed toward debt repayment and funding in core markets. The group’s UK development pipeline remains paused as management reassesses economic conditions and government support. A new co-working space concept at art’otel London Hoxton is slated to open in mid-November 2026.
A cash offer from Fattal Hotel Group at £22 per share, proposed in May 2026, was rendered non-deliverable after Euro Plaza Holdings withdrew its support in July 2026.
