PPHE Hotel Group Reports Resilient H1 2025 Performance with Revenue Growth and Strategic Acquisitions

Dividend and asset backing: signals of resilience

The interim dividend is maintained at 17p per share, payable on 17 October 2025 to shareholders on the register at 19 September 2025. That returns £7.1 million to investors and underlines confidence in cash generation, even as margins tighten.

For asset-focused investors, EPRA NRV (Net Reinstatement Value) per share rose 2.0% to £28.07, helped by FX movements and AHG transactions. Annual external valuations are due again in December 2025.

Leverage remains reasonable for a property-heavy model. Combined EPRA LTV was 34.5% at 30 June 2025 (33.5% at 31 December 2024). The group has £244 million of loans maturing within 12 months; discussions with lenders have begun and management views refinancing risk as remote. A £100 million interest rate swap executed in 2022 helps mitigate rate volatility.

Outlook and guidance: flat EBITDA year, long-term upside intact

Trading through the summer has been consistent with H1 and modestly improving into H2. The Board expects FY25 EBITDA to be at a similar level to FY24, reflecting current rate dynamics and the slower initial contribution from art’otel London Hoxton. The commitment stands that recently opened projects should add at least £25 million of incremental EBITDA when fully stabilised.

There are industry-level clouds to watch. The Netherlands may shift hotel VAT from 9% to 21% from January 2026, and UK business rates remain a swing factor. Neither is within PPHE’s control, but both could nibble at margins from FY26 onwards.

For context, company-compiled analyst consensus as at 27 August 2025 shows FY25 revenue of £462.9 million to £476.5 million and EBITDA of £147.6 million to £154.0 million.

My take: steady hands, asset-led story, but near-term margin grind

On balance, this is a resilient print. Top-line growth and rising occupancy are encouraging, and the dividend being held at 17p backs up the cash story. The margin compression is the rub: lower average room rates, plus higher wage and social security costs, pushed EBITDA down despite efficiency wins. That is showing up in normalised PBT too, which swung to a £3.7 million loss.

Strategically, the moves make sense. Upgrading Park Royal to freehold at a compelling yield, adding a well-located City of London scheme with high single-digit target returns, and increasing the stake in Arena at about a 10% EBITDA yield all fit the “real estate first” playbook. If PPHE lands the promised £25 million incremental EBITDA from recent openings, that creates meaningful operating leverage into FY26-27.

Positives I’m taking away

• Revenue up 4.7% with RevPAR growth and rising occupancy.
• Dividend maintained at 17p; EPRA NRV per share up to £28.07.
• Attractive capital allocation: Park Royal freehold at a 4.8% unlevered yield and City site targeting high single-digit yields.
• Reasonable leverage with Combined EPRA LTV at 34.5% and refinancing work underway.

Watch-outs to keep on the radar

• EBITDA down 5.7% and margin down 250 bps as rates normalise and costs rise.
• FY25 guidance effectively flat versus FY24; Hoxton phasing delays profit contribution.
• Macro tax/regulatory risks: potential Dutch VAT rise to 21% from 2026 and UK business rates.
• Germany lapping strong events calendar; recovery needs a healthier rate backdrop.

Bottom line

PPHE’s H1 shows a business trading steadily but paying the price for softer room rates and higher labour-related costs. The asset base is strengthening, the dividend is intact, and the pipeline is building in London and across Europe. If management delivers the £25 million stabilised EBITDA from the recent openings and secures refinancing on the terms they expect, the medium-term equity story – asset-backed growth with improving cash yields – remains very much in play.