Annual Results

RNS Number : 1148D

PPHE Hotel Group Limited

01 March 2022

1 March 2022

PPHE HOTEL GROUP LIMITED
("PPHE Hotel Group", the "Group" or the "Company")

Audited Annual Results for the financial year ended 31 December 2021
Publication of Annual Report & Accounts and Notice of Annual General Meeting

Well positioned for long-term growth, underpinned by attractive pipeline, strong customer demand and operational progress

PPHE Hotel Group, which together with its subsidiaries (the "Group") is an international hospitality real estate group, is pleased to announce its audited annual results for the financial year ended 31 December 2021.

Boris Ivesha, President and Chief Executive Officer PPHE Hotel Group said:

"We are very pleased to have delivered strong progress against our long-term strategy during what has been a year of continued challenging trading conditions. In the year, our financial performance and position have improved, we have expanded into the new markets of Austria and Italy, and have made excellent progress with the projects in our development pipeline.

Restrictions in the majority of our operating markets have now been lifted and, as has previously been the case, the quality and depth of the Group's portfolio have driven market outperformance when restrictions were eased particularly in the UK and in Croatia during the summer season.

Whilst a number of macroeconomic pressures are likely to remain for the near term, our attractive portfolio, strong financial position and excellent team, provide confidence that the strong customer demand for our leading proposition will enable the Group to capitalise on both short-term demand and long-term growth opportunities to deliver for all stakeholders."

Financial summary

•	Total revenue increased by 38.9% to £141.4 million (2020: £101.8 million), representing a recovery to 39.5% of 2019 levels, achieved in spite of multiple periods of restriction across our operating markets. In Croatia, the third quarter revenue was approximately 93% of the revenue generated during the same period in 2019.
•	Recovery across all key operating metrics, with RevPAR up 22.1% year-on-year to £35.9 (2020: £29.4), average room rate up 11.4% to £117.0 (2020: £105.1) to represent 91.1% of 2019 levels. Occupancy improved to 30.7% (2020: 28.0%).
•	Reported EBITDA increased to £25.1 million (2020: loss of £10.1m) of which £39.1 million was generated in H2 2021, including a one-off benefit in the form of government subsidies.
•	Normalised profit before tax improved to £(47.5) million (2020: £(89.8) million).
•	The Group's financial position is strong, with a total consolidated cash balance of £136.8 million at 31 December 2021 (2020: £114.2 million) and access to available facilities of £76.8 million.
•	EPRA NRV per share remained flat at £22.15 (2020: £22.08).
•	Adjusted EPRA earnings per share improved to a loss of (44) pence (2020: (123) pence).
•	The Board is not proposing a dividend in respect of the financial year ended 31 December 2021. However, the Board appreciates the importance of dividends and will continue to review any future dividend payments in line with the recovery trajectory and the business returning to cash flow positive trading.

Operational and corporate highlights

•	The Group's proactive commercial strategy drove revenue generation during periods of low demand, with properties operating as UK government quarantine hotels for part of the year and Park Plaza Westminster Bridge London chosen as the exclusive host hotel for the 2021 Wimbledon Championships.
•	Strategic expansion into the important Austrian and Italian markets through the acquisition of a 144-room hotel in Nassfeld, Austria and a 101-room property in the centre of Rome, Italy.
•	Continued progress against £200m+ repositioning and development pipeline, providing a strong foundation for long-term sustainable growth. Highlights include:
	ͦ	The construction of the new art'otel London Hoxton, expected to complete by 2024 continued to plan with structural works completed up to the 17^th floor (out of 27);
	ͦ	The two-year redevelopment of Grand Hotel Brioni in Pula, Croatia, is in its final stages and expected to relaunch for the 2022 summer season;
	ͦ	Work began on the conversion of the Group's property in the centre of Zagreb, its first in the capital city, to a luxury 115-room art'otel which is expected to open H1 2023;
	ͦ	art'otel London Battersea Power Station, which will be operated by the Group under a management agreement, is set to open in the second half of 2022.
•	Long-term partnership with Clal announced this year, underpinning the Group's NRV, has unlocked £113.7m of equity to give the Group further financial headroom to support recovery and capitalise on growth opportunities.

Post-Period end

•

The beginning of FY22 saw continued restrictions across the Group's operating markets due to the Omicron variant, however, in line with previous trends, the Group saw an immediate increase in new bookings following the lifting of measures, starting with the UK region which is the Group's most important market. This momentum continued throughout February, demonstrating the strong customer demand for the Group's high-quality, prime-located properties and the Group's transient demand is currently at 65% of 2019 levels.

Key financial statistics

	Reported in GBP (£)
	Year ended 31 December 2021	Year ended 31 December 2020
Total revenue	£141.4 million	£101.8 million
EBITDAR	£27.6 million	£ (9.1) million
EBITDA	£25.1 million	£ (10.1) million
EBITDA margin	17.7%	(9.9)%
Reported PBT	£(57.6) million	£(94.7) million
Normalised PBT	£(47.5) million	£(89.8) million
Reported EPS	(123)p	(192)p
Occupancy	30.7%	28.0%
Average room rate	£117.0	£105.1
RevPAR	£35.9	£29.4
Room revenue	£84.4 million	£63.6 million
EPRA NRV per share	22.15	22.08
Adjusted EPRA earnings per share	(44)p	(123)p

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 financial year ended 31 December 2021 (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 17 May 2022 at 12 noon at 1^st Floor, Elizabeth House, Les Ruettes Brayes, St Peter Port, Guernsey GY1 1EW.

Pursuant to UK Listing Rule 9.6.1, 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: https://data.fca.org.uk/#/nsm/nationalstoragemechanism

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 financial year ended 31 December 2021. This material is not a substitute for reading the full Annual Report.

This announcement contains inside information. The person responsible for arranging the release of this announcement on behalf of the Company is Daniel Kos, Chief Financial Officer & Executive Director.

Enquiries:

PPHE Hotel Group Limited
Daniel Kos, Chief Financial Officer & Executive Director
Robert Henke Executive Vice President of Commercial Affairs	Tel: +31 (0)20 717 8600
Hudson Sandler
Lucy Wollam/Charlotte Cobb/Nick Moore	Tel: +44 (0)20 7796 4133 Email: [email protected]

Notes to Editors

PPHE Hotel Group is an international hospitality real estate company, with a £1.8 billion portfolio, valued as at December 2021 by Savills and Zagreb nekretnine Ltd (ZANE), of primarily prime freehold and long leasehold assets in Europe.

Through its subsidiaries, jointly controlled entities and associates it owns, co-owns, develops, leases, operates and franchises hospitality real estate. Its portfolio includes full-service upscale, upper upscale and lifestyle hotels in major gateway cities and regional centres, as well as hotel, resort and campsite properties in select resort destinations. The Group's strategy is to grow its portfolio of core upper upscale city centre hotels, leisure and outdoor hospitality and hospitality management platform.

PPHE Hotel Group benefits from having an exclusive and perpetual licence from the Radisson Hotel Group, one of the world's largest hotel groups, to develop and operate Park Plaza® branded hotels and resorts in Europe, the Middle East and Africa. In addition, PPHE Hotel Group wholly owns, and operates under, the art'otel® brand and its Croatian subsidiary owns, and operates under, the Arena Hotels & Apartments® and Arena Campsites® brands.

PPHE Hotel Group is a Guernsey registered company with shares listed on the London Stock Exchange. PPHE Hotel Group also holds a controlling ownership interest in Arena Hospitality Group, whose shares are listed on the Prime market of the Zagreb Stock Exchange.

Company websites

www.pphe.com
www.arenahospitalitygroup.com

For reservations

www.parkplaza.com

www.artotel.com

www.arenahotels.com

www.arenacampsites.com

CHAIRMAN'S STATEMENT

Adapting to new challenges

Reflecting on 2021, I am very humbled by the adaptability, skill and dedication of our teams across the business. Their hard work during the last two years has aided the Group immensely in navigating through the most difficult trading conditions ever seen in our industry. Despite these unprecedented trading conditions, progress has been made against our strategic priorities.

Many of our teams have had to work hard to rebuild momentum following extended periods of government-financed support, such as furlough, but they have come together stronger than ever, continuing to welcome our guests where we can and with the best safety and customer service possible. Our Executive Leadership in particular voluntarily signed up to a number of salary sacrifice schemes, deferments and waiver of incentives throughout 2020 and 2021. I would like to place on record my gratitude for our teams and leadership's support, commitment and exceptional efforts during these difficult times.

PPHE has continued to make strong progress throughout the year, and we are proud that the value of our property portfolio now stands at £1.8 billion. Our £200+ million pipeline is robust and includes flagship developments such as art'otel London Hoxton and Grand Hotel Brioni Pula, alongside repositioning projects in Croatia and Italy. There will be many great openings to watch out for over the next few years which we are very excited for, and our long-term partnership with Clal Insurance ("Clal"), which unlocked £113.7 million of equity, has enabled us to pursue further strategic growth opportunities and will continue to do so as the pandemic subsides.

Delivering for all stakeholders

We recognise the unique but vital role that each of our stakeholders plays in the Group's success. As such, creating and delivering value for their benefit is the driving force in all that we do. This is visible in: our passion for creating memorable guest experiences; our commitment to maintaining an open and constructive dialogue with investors; our prioritisation of the well-being and development of our team members; and our willingness to serve the communities in which we operate. I was pleased to see the progress made in our stakeholder engagement activities over the course of the year, particularly the active dialogue maintained with representatives of independent shareholders in order to remain guided by their views and allow us to adapt our approach wherever possible in response.

The maintenance of a robust governance framework is key to the delivery of long-term sustainable value and has been crucial to navigating the circumstances of the pandemic as well as the recovery process. 2021 saw us make a number of important strides in corporate governance, including establishing a designated Environmental, Social and Governance (ESG) Committee to add necessary rigour and structure to the manner in which we deliver our governance goals, and delivering our first Task Force on Climate-related Financial Disclosures (TCFD) Report, which we welcomed as an opportunity for meaningful and structured engagement with the risks and opportunities presented by climate change, as well as an advisory vote to shareholders on the Remuneration Report included in the financial statements and the Remuneration Policy applicable as of 2022.

Dividend

Having suspended dividend payments in light of ongoing uncertainty due to COVID-19, we have continued to review our policy in line with business performance and cash flow. Government measures have continued to restrict travel demand and the Group has subsequently received government support during the year across its different operating regions. The Board is therefore of the view that it is neither sustainable nor appropriate to propose a dividend in respect of 2021. The Board appreciates the importance of dividends and will continue to review any future dividend payments in line with the recovery trajectory and the business returning to cash flow positive trading.

Looking ahead

We were heartened to see momentum return to the business from May 2021 onwards, as many of our markets opened up, albeit with a few restrictions, and international travel resumed. During this period, it was clear that demand for our high quality, well-located hotels remained strong. The emergence of the Omicron variant in November resulted in new measures being introduced and demand declining.

We are well aware that there will continue to be industry-wide challenges ahead throughout this road to recovery. While uncertainty will continue as individual markets react to their own evolving situations that cannot be fully predicted, we will continue to deliver on our strategy, opening our doors where we can and delivering the best experience possible for our customers. As vaccination and booster programmes continue to be rolled out in countries all over the world, I expect that our recovery will remain strong, as it was in the UK and Croatia in the second half of this year.

The Board's optimism for the future is founded on our proven ability to recover through challenging times. We are well-placed to continue to outperform the sector whenever and wherever restrictions are eased, as our unique business model, strong financial position, proven management team, superior expertise and exciting development pipeline continue to position us well into 2022 and beyond.

Eli Papouchado
Chairman

PRESIDENT AND CEO'S REVIEW

Regaining momentum

Throughout 2021, we continued to manage effectively the ongoing challenges presented by the pandemic and the subsequent industry-wide uncertainty and disruption this caused. Once again, our dynamic owner/operator business model gave us the ability to adapt to ever-changing market conditions, underpinned by the Group's strong financial position and our well-invested portfolio following our recent £100+ million investment programme. The Group is well-positioned to benefit from market recovery.

2021 in review

Trading in the year was challenging in the first six months as the ongoing pandemic severely reduced activity levels due to government-imposed domestic and international travel restrictions and social-distancing measures. Consequently, most of the Group's properties were temporarily closed or operating at reduced capacity.

During Q2, travel restrictions were progressively eased across the Group's operating markets, to varying degrees and at varying times. From mid-May in the UK and from June in Continental Europe, activity increased gradually, driven primarily by leisure demand from domestic markets with bookings characterised by short lead times. By the end of Q2, the majority of the Group's properties were open.

With vaccination programmes across all our operating markets firmly underway in the second half of the year, international travel restrictions were eased, supported by widespread lateral flow and PCR testing as well as the introduction of vaccination passports across Europe. This led to good trading momentum and revenue generation in the second half of the year, underpinned by a strong performance in the UK and Croatia and our successful room rate-focused strategy.

Additionally, the Group benefited from sports events, such as the 2020 UEFA Championships and the Cricket Hundred Series, going ahead. Corporate travel and meetings and events demand continued to grow, and the booking pace improved until mid-November when demand slowed due to the spreading of the Omicron variant. This new variant resulted in governments temporarily introducing measures. Once these are again eased we expect to regain momentum. Against this backdrop, the revenue performance of several of our properties outperformed the market.

The Group's proactive commercial strategy enabled us to secure contracted group business alongside demand generated by essential stays. Park Plaza Victoria London and Park Plaza London Waterloo operated as UK Government quarantine hotels for part of the year, which supported revenue generation during a period of low demand. Park Plaza Westminster Bridge London was proud to be chosen as the exclusive host hotel for players and support teams of the 2021 Wimbledon Championships.

Throughout this period of uncertainty for the hospitality industry, we took pride in our responsiveness and adaptability to ever-changing market conditions, which include an increasingly pressured labour market. While we are not immune to this well-documented issue, which spans a number of sectors, our continuous focus on being an employer of choice to attract and retain talent has positioned us strongly in the current labour market. Furthermore, our decision pre-pandemic to bring housekeeping services in-house has helped insulate the Group from the disruption to operations caused by these labour shortages. We are delighted that our efforts in this area have been recognised by several industry accolades, and throughout the year, the health and safety of our colleagues, and all stakeholders, have remained our priority.

Full details on the Group's operational performance by region are set out in the Business Review below.

Improved financial performance

The Group's overall financial performance improved year-on-year, reflecting some recovery in activity levels as the year progressed, albeit from a low base. Reported total revenue increased by 38.9% to £141.4 million (2020: £101.8 million) and EBITDA improved to £25.1 million (2020: £(10.1) million), resulting in an EBITDA margin of 17.7% (2020: (9.9)%).

Once again, key operating metrics were impacted by property closures and reduced capacity in the first half of the year, however the Group's rate-focused strategy delivered a year-on-year recovery in average room rate to £117.0 (2020: £105.1), with a more gradual improvement in demand during the year resulting in occupancy of 30.7% (2020: 28.0%). RevPAR increased by 22.1% to £35.9 (2020: £29.4), 34.6% of the level reported in FY2019.

The Group's financial position remains strong, with a total consolidated cash balance of £136.8 million at 31 December 2021 (31 December 2020: £114.2 million).

Our property portfolio was predominantly valued by Savills and Zane at £1.8 billion as at 31 December 2021. EPRA NRV per share increased by 0.3% to £22.15 per share. The adjusted EPRA earnings per share was (44) pence (2020: (123) pence).

Delivering strategic progress

Throughout 2021 we made good progress against the Group's long-term growth strategy while continuing to navigate the ongoing disruption to operations. The flexibility that our owner/operator model provides enables the Board to take a long-term view and gives us control over the scope and phasing of our £200+ million development pipeline and investment projects.

This development pipeline underpins long-term sustainable growth. Our long-term partnership with Clal, announced in the year, has unlocked equity to give the Group further financial headroom to capitalise on growth opportunities to the benefit of all stakeholders, as well as support our recovery.

Development pipeline update

In the UK, construction of the new art'otel London Hoxton, our largest development project, continued to plan. The new building which will comprise a premium lifestyle hotel and office space is expected to complete by 2024.

art'otel London Battersea Power Station, which is to be operated by the Group under a long-term management agreement, is expected to open during the second half of 2022.

Two further projects are planned in London: a mixed-use scheme including a 465-room hotel adjacent to Park Plaza London Park Royal; and a mixed-use scheme including a 186-room hotel and office space close to our London South Bank hotels.

In Croatia, the repositioning of Grand Hotel Brioni in Pula is almost complete. This 227-room, full-service hotel is expected to relaunch for the 2022 summer season. In Q4, works started on the conversion of the Group's property in the centre of Zagreb into a luxury hotel.

As previously announced, we took the decision in 2020 to pause and reassess our development project in New York City.

New hotel acquisitions

In Q4, we announced two strategic acquisitions which have strengthened our pipeline, expanded our presence in Europe and marked our entry into two new and exciting markets: Austria and Italy.

We acquired the FRANZ Ferdinand Mountain Resort in Nassfeld, Austria, a strategic fit that complements our summer leisure business in Central and Eastern Europe and the DACH region. This acquisition also builds on the seasonal synergies which can be achieved due to the hotel's proximity to our Croatian operations. In addition, Austria is one of the Group's largest customer markets for our Croatian operations, and this hotel will help us further raise the Group's profile in this important market.

The city of Rome is one of southern Europe's key gateway cities and has been a strategic target for the Group. The acquisition in November of a 4-star, 101-room property adds another key capital city to our portfolio. The site provides the opportunity to reposition the property and further bolster our development pipeline.

Further details about our development pipeline projects and acquisitions are outlined in the Business Review below.

Our partnership with Radisson Hotel Group

For more than two decades, PPHE Hotel Group has had an exclusive perpetual licence from Radisson Hotel Group ("Radisson"), which gives the Group the right to develop and operate Park Plaza-branded hotels and resorts in Europe, the Middle East and Africa. Radisson is part of the world's second largest hotel group by number of rooms. This strategic partnership gives the Group (including its wholly owned art'otel brand) access to Radisson's state-of-the-art central reservation and global distribution systems, its global sales and marketing capabilities, and more than 24 million loyalty programme members.

Employer of choice

Our people and values are at the heart of our business and at the core of everything we do. We harness an open, honest, family values culture across the business, whether managing our hospitality assets or delivering consistent operational excellence across our portfolio. As well as developing this culture, a key focus has been safeguarding the well-being of our team members throughout the pandemic.

We recognise the importance of a strong employer brand, particularly in the current recruitment environment, and we have a strong track record of investing in our team members to attract and retain talent. Ongoing investment in the development of new technologies to facilitate people management, learning and development, communications, and data and analytics, coupled with our values, strong culture and industry-leading people initiatives, further strengthen the Group's position for recruitment.

Industry-wide, recruitment has become increasingly challenging across all our operating markets. We have proactively enhanced our recruitment approach to enable the Group to stand out from the competition. We have bolstered our talent management and recruitment teams to ensure we retain talent and recruit new team members. Our recruitment strategy is centred around talent and brand attraction, promotion of PPHE Hotel Group as an employer of choice, showcasing the Company's culture, and targeting candidates via LinkedIn and other social media and online platforms. We have ensured that our pay rates remain competitive, and we have introduced retention bonuses and have relaunched our 'recommend a friend' incentive scheme, through which more than 125 people have joined the Group in the UK and The Netherlands.

During the year, we recruited more than 1,350 team members across the Group. In London, we have launched our own centralised recruitment service and we have strengthened our partnerships with local job centres. In the CEE region, we have benefited from our ability to share team member resources across our countries of operation.

'Best Employer in Hospitality' and other industry recognition

We are proud that our ongoing investment in our people has been recognised through a number of awards during the year: 'Best Employer in Hospitality' award and 'Top-6 Best Places to Work in Hospitality' by leading UK hospitality trade publication The Caterer; winner of the 'Best Management Preparation Award' at the HR in Hospitality Awards 2021; and our team was voted 'HR team of the Year' at the HR in Hospitality Awards 2021. Additionally, in Croatia, the Group's subsidiary Arena Hospitality Group d.d. ("Arena") was awarded the national 'Safe Stay in Croatia' label.

In addition to recognition of our business, we were delighted that a number of our people were identified for their talent, excellence and contribution. This included Chief Corporate & Legal Officer Inbar Zilberman, who was featured in 'Women to Watch and Role Models for Inclusion in Hospitality'; Daniel Pedreschi, Regional Vice President Operations, the UK, was awarded the coveted Hotelier of the Year at the 2021 Hotel Cateys; and Park Plaza Westminster Bridge London's Executive Chef Oliver Ruiz won the Hotel Chef of the Year (more than 250 covers) Award at the 2021 Hotel Cateys, a huge achievement against strong competition.

Committed to creating a memorable guest experience

We are committed to creating memorable experiences for all our guests, underpinned by our high quality, well-invested portfolio of properties in desirable locations. Our guest safety and well-being programmes were once again accredited by SGS, a leading inspection, verification, testing and certification company.

We have continued to adapt our offer, and the way we engage with our guests has evolved, with an acceleration in digitalisation trends during the pandemic. Digital services and dedicated Apps for Park Plaza and art'otel offer guests reduced person-to-person contact during their stay. These technologies enable guests to check-in online and have a digital room key via their smartphone. Guests also receive a pre-arrival email with ancillary services to personalise their stay, including room upgrades, early check-in and late check-outs, breakfast and dinner options or special amenities. During their stay, real-time messaging options through chat or WhatsApp enable guests to communicate with our team members, and they are able to order room service online. Contactless check-out and various new payment options are available on departure.

Our team members

2021 has been another challenging year for our team members. We have stayed connected with our team members to support their well-being, training and career development. The internal communications initiatives we have put in place during the pandemic, including re-boarding colleagues as hotels reopened and enhanced learning and development programmes, have helped drive engagement and loyalty and have helped us nurture and support our teams.

On behalf of the Board, I would like to thank all our team members for their commitment, professionalism and hard work throughout the year.

Strategy update

During 2021 we refined our strategy, intended to guide us through our next phase of growth by continuing to do what we do well, taking advantage of opportunities and continuing to mitigate risks through further diversification. Our aim is to continue to focus on upper upscale city centre and lifestyle hotels and continue our investment in our leisure and outdoor offering. In addition, we recognise that our award-winning hospitality management platform presents an excellent growth opportunity through managing hospitality assets for our joint venture partners and third-party owners.

Looking ahead

As we have demonstrated throughout the pandemic, as soon as measures are eased we are able to capitalise on travel demand, which at the early stage is predominantly driven by domestic leisure travel. The New Year started with restrictions and lockdown measures in place across all our operating regions. However, with the impact of the Omicron variant on hospitalisation rates less significant than initially feared in late 2021, governments started easing measures in January, which immediately resulted in an increase in new bookings. In the UK, our most important market, new bookings are currently trending at 65% of the levels in 2019. We have also seen an increase in international bookings as travelling between countries has become easier. We expect these trends to continue and are confident that in addition to leisure travel, we will shortly see a return of corporate travel with the 'working-from-home' guidance now removed across most of our operating regions. The number of new meetings and events enquiries has remained solid throughout and we expect a particularly buoyant second half of 2022 in this segment.

Our well-invested portfolio, our proactive leadership team and our dedicated and passionate team members will drive our recovery as we prepare for the next phase of growth with several exciting new openings this year and next.

Boris Ivesha
President & Chief Executive Officer

FINANCIAL REVIEW

Pipeline growth and a solid financial position

Financial Results

Key financial statistics for the financial year ended 31 December 2021.

	Year ended 31 December 2021	Year ended 31 December 2020
Total revenue	£141.4 million	£101.8 million
Room revenue	£84.4 million	£63.6 million
EBITDAR	£27.6 million	£(9.1) million
EBITDA	£25.1 million	£(10.1) million
EBITDA margin	17.7%	(9.9)%
Reported PBT	£(57.6) million	£(94.7) million
Normalised PBT	£(47.5) million	£(89.8) million
Reported EPS	(123)p	(192)p
Occupancy	30.7%	28.0%
Average room rate	£117.0	£105.1
RevPAR	£35.9	£29.4
EPRA NRV per share	£22.15	£22.08
Adjusted EPRA earnings per share	(44)p	(123)p

Overview of 2021

For the second consecutive year the Group's financial performance was severely impacted by the COVID-19 pandemic. The first half of the year was dominated with lockdowns and travel restrictions in all of our operating regions, however trading bounced back quickly in the second half-year due to pent-up leisure demand. A strong leisure season caused our Croatian region to reach 93% of its 2019 revenues in the third quarter of 2021.

Although this was the second time the Group faced severe lockdown and travel restrictions, reopening the hotels after this period has proved more challenging than in 2020. Our significantly reduced workforce at reopening, paired with a challenging labour market, caused staff shortages in all our operating regions. Thanks to the dedication and hard work of our staff we were able to cope with the demand fluctuations throughout the last six months of the year. However as a consequence of these shortages we are faced with increased wage inflation in all our operating regions.

Despite inflationary pressures, the Group continued to take a highly disciplined approach to expenditure with a large focus on further automation and centralisation of back office functions. Furthermore, demand growth throughout the second half of the year drove average room rates, which in some properties exceeded 2019 levels.

During the year the Group entered into a significant joint venture transaction, whereby we divested 49% of two of our London assets to Clal Insurance. With this transaction the Group was able to raise £125.8 million, retaining a long-term management contract and control over the assets. The transaction was largely done at the latest reported NRV of the Group. The proceeds are earmarked to pursue new growth opportunities.

Throughout last year we have been active on growing and progressing our pipeline, with the acquisition of two new hotels in Italy and Austria, the start of the redevelopment of a new hotel in Zagreb, and we are entering the completion stages of a two-year redevelopment of Grand Hotel Brioni in Pula (Croatia).

With current trading impacted again by new government restrictions, at the end of the year the Group's hotels returned to reduced occupancy levels, albeit higher than those experienced in the previous lockdowns of the pandemic.

Operational performance

Revenue

The first six months of the year were dominated by worldwide lockdowns, amid a vaccine roll out programme. The Group's occupancy levels reached a record low in Q1 given these lockdowns and limited essential worker stays. From May onwards, restrictions were progressively eased across our operating markets and demand started to build up during the summer months. The Group was fortunate to secure an exclusive agreement for Park Plaza Westminster Bridge London to act as official player hotel for the 2021 Wimbledon Championships; furthermore the Group secured a contract to operate two hotels exclusively as part of the UK Government's hotel quarantine programme. These three exclusive contracts provided the UK with contracted business coming out of a lockdown period, enabling the Group to build up a revenue base.

Trading in Q3 benefited from pent-up demand after months of travel restrictions, particularly in Croatia, where revenue reached 93% of its 2019 levels in Q3. However, from late autumn demand and consumer sentiment was again affected by increased infection rates and enhanced government measures imposed across Europe to tackle the spread of the virus, followed by further strict government restrictions.

After a period of two years trading in a pandemic, with multiple periods of trading under strict lockdowns or travel restrictions, the Group has significant learnings from booking cycles and trading patterns. Coming out of a period of government-restriction period, we noticed a less severe impact to our occupancy compared to other lockdown periods and a quicker reverse of the downward booking trends seen after these restrictions were made.

Reported total revenue for the financial year increased by 38.9% to £141.4 million (2020: £101.8 million). Revenue recovered to 39.5% of 2019 levels (2019: £357.7 million).

RevPAR was £35.9, up 22.1% (2020: £29.4), and at 34.6% of 2019 levels. Average room rate increased by 11.4% to £117.0 (2020: £105.1) and was at 91.1% of 2019 levels. Occupancy improved to 30.7% (2020: 28.0%), reflecting our focus on room rates. Predominantly the summer season in Croatia and the Q4 in the UK showed a rate profile exceeding 2019 on many occasions.

EBITDA, profit and earnings per share

The Group's Reported EBITDA is £25.1 million (2020: £(10.1) million), of which £(14.0) million relates to the first six months of 2021 and £39.1 million to the last six months of 2021.

Due to the different periods of lockdown, comparing trading periods is increasingly difficult, however the Group believes its third quarter of 2021 was the least distorted trading-wise in terms of government restrictions, with an EBITDA of £33.7 million. This shows a 38.0% decline when compared to the 'COVID-free' 2019 trading period, when the Group delivered a £54.4 million EBITDA in Q3.

The hospitality industry is currently experiencing a challenging labour market as many hospitality workers have left the industry during the second period of lockdowns in early in 2021, causing staff shortages in all our operating regions. Besides this, many European hospitality workers have left the UK during the pandemic, not being able to return due to a change in immigration rules, which adds to the already limited pool of available people. These staff shortages are causing inflationary pressures in payroll cost across all operating regions. The Group is mitigating these inflationary pressures with the implementation of automation, process improvement and centralisation of back office functions.

Similar to 2020, the Group continued to access government support and grants during periods where government restrictions were imposed and materially impacted the Group's normal trading. These support schemes helped to manage the fixed costs within the business during a period of severe revenue decline. In total, the Group received £29.7 million (2020: £34.1 million) of financial support in the year.

Normalised profit before tax improved to £(47.5) million (2020: £(89.8) million). Reported profit before tax improved by £37.1 million to £(57.6) million (2020: £(94.7) million). Below is a reconciliation table from reported to normalised profit.

In £ millions	12 months ended 31 December 2021	12 months ended 31 December 2020
Reported (loss) profit before tax	(57.6)	(94.7)
Net insurance proceeds received in relation to one of the Group's UK hotels	-	(10.0)
Execution of the sale and purchase agreement with the Republic of Croatia related to Guest House Riviera Pula	-	1.5
Loss on buy back of units in Park Plaza Westminster Bridge London from private investors	0.5	-
Fair value adjustment on income swaps with private investors of Income Units in Park Plaza Westminster Bridge London	-	0.3
Settlement of legal claim	3.1	-
Results from marketable securities	-	(0.1)
Revaluation of finance lease	3.6	3.4
Revaluation of Park Plaza County Hall London Income Units	(0.6)	2.4
Preopening expenses	0.3	0.6
Capital (profit) loss on disposal of fixed assets	(1.0)	1.5
Impairment of property, plant and equipment and right-of-use assets	4.4	5.3
Business combination acquisition costs	1.0	-
Loan prepayment break costs	0.5	-
Revaluation of share appreciation rights	(1.7)	-
Normalised (loss) profit before tax	(47.5)	(89.8)

Reported basic/diluted earnings per share for the period were (123) pence (2020: (192) pence).

Depreciation excluding impairment in the year was £38.9 million (2020: £41.3 million). Depreciation is recorded in accordance with IFRS, nevertheless internally we consider our ongoing average capital expenditure (CAPEX) over the lifespan of our hotels as a more relevant measure in determining profit, which in the hospitality industry is calculated as approximately 4% of total revenue. Our EPRA earnings number set out below is calculated using the 4% rate instead of the reported non-cash depreciation charge.

CAPEX, acquisitions and pipeline update

While the pandemic continued to cause operational disruption, we remained focused on implementing our strategy, progressing our development pipeline, and expanding our footprint into new, highly attractive markets.

We progressed planned development projects, which include a new build hotel in Shoreditch, London (art'otel London Hoxton), a repositioning of a hotel on the Croatian coast (Grand Hotel Brioni) and an office to the hotel conversion in the city centre of Zagreb.

In the flagship art'otel London Hoxton development, the building's core is now reaching the 17^th floor of the total 27 floors. After expected completion in early 2024, this mixed-use development will have 343 large hotel rooms, 5,900m² of office space, a spa, gym, pool and multiple food and beverage outlets, including a stunning rooftop bar.

The two-year HRK 260 million (£30 million) repositioning of Grand Hotel Brioni Pula in Croatia is nearing its completion and expected to open before the 2022 season. This luxury hotel features 227 rooms and is located at a spectacular location on the Verudela peninsula.

In Zagreb, interior demolition has started and works are underway to convert this former office into a 118-room luxury hotel in the city centre. This hotel will feature a rooftop pool that overlooks the entire city.

Throughout the year the Group also succeeded in acquiring two new hotels. One hotel is located in Nassfeld, Austria. This 4-star mountain resort includes 144 rooms and is located directly next to the ski lifts of the Nassfeld ski area, featuring 110 kilometres of slopes and excellent summer sports facilities. The hotel was acquired for £12.8 million and complements the Group's leisure and outdoor segment. The resort is closely located to the Group's operations in Croatia and its seasonal operations will complement each other.

The Group furthermore acquired a 4-star hotel in Rome. This hotel, acquired for £28.3 million, has 101 rooms and is located in a prime central location in the city. The Group is planning a significant repositioning of the hotel to an upper upscale lifestyle offering, with opening expected in 2023.

Together the above developments total a £200+ million plus active development pipeline of hotels in development or repositioning. Our owner/operator model enables us to have full control over the timing of the completion of this pipeline. Considering the challenging market conditions, the Group took the decision in summer 2020 to pause and reassess its project in New York until further notice.

Real estate performance valuations

As a developer, owner and operator of hotels, resorts and campsites, the Group has a real estate driven business model. Returns are generated by both developing the assets we own and operating our properties to their full potential, thus driving increased value for all stakeholders. Certain EPRA performance measurements are disclosed to aid investors in analysing the Group's performance and understanding the value of its assets and earnings from a property perspective.

Summary of EPRA performance indicators

	Year ended 31 December 2021		Year ended 31 December 2020
	£ million	Per Share	£ million	Per Share
EPRA NRV (Net Reinstatement Value)	951.2	£22.15	960.8	£22.08
EPRA NTA (Net Tangible Assets)	919.7	£21.42	924.4	£21.24
EPRA NDV (Net Disposal Value)	857.5	£19.97	830.5	£19.08
EPRA earnings	(17.5)	(41)p	(40.6)	(96)p
Adjusted EPRA earnings	(18.8)	(44)p	(52.1)	(123)p

In December 2021, the Group's properties (with the exception of operating leases, managed and franchised properties) were independently valued by Savills (in respect of properties in The Netherlands, UK and Germany) and by Zagreb nekretnine Ltd (Zane) (in respect of properties in Croatia). Based on their valuations we have calculated the Group's EPRA NRV, EPRA NTA and EPRA NDV.

The EPRA NRV as at 31 December 2021, set out in the table below, amounts to £951.2 million, which equates to £22.15 per share. The EPRA NRV was negatively impacted by the loss in the year of £52.1 million and positively impacted by a revaluation of £82.0 million. The positive revaluation follows an improved forward looking cash flow profile, with the expectation that the worst period of trading is in the past. In its cash flow forecast, the independent valuer assumes trading will be largely in line with 2019 in the year 2024. Discount and caprates used increased slightly in some instances, reflecting a higher inflationary environment and added risk profile due to the ongoing pandemic.

In the summer of 2021 the Group completed a joint venture transaction with Clal Insurance, divesting a non-controlling 49% stake in two hotels in London. This transaction largely reflects the values that had been included in the Group's EPRA NRV as per 31 December 2020 and reconfirmed the externally valued NRV. The basis for calculating the Company's EPRA NRV for 31 December 2021 is set out in the table below:

	31 December 2021 £ million
	EPRA NRV (Net Reinstatement Value)	EPRA NTA⁴ (Net Tangible Assets)	EPRA NDV (Net Disposal Value)
NAV per the financial statements	278.5	278.5	278.5
Effect of exercise of options	6.2	6.2	6.2
Diluted NAV, after the exercise of options¹	284.7	284.7	284.7
Includes:
Revaluation of owned properties in operation (net of non-controlling interest)²	636.1	636.1	636.1
Revaluation of the JV interest held in two German properties (net of non-controlling interest)	3.4	3.4	3.4
Fair value of fixed interest rate debt	-	-	(53.7)
Deferred tax on revaluation of properties	-	-	(13.0)
Real estate transfer tax³	17.2	-	-
Excludes:
Fair value of financial instruments	(0.4)	(0.4)	-
Deferred tax	(9.4)	(9.4)	-
Intangibles as per the IFRS balance sheet	-	14.3	-
NRV/NTA/NDV	951.2	919.7	857.5
Fully diluted number of shares (in thousands)¹	42,935	42,935	42,935
NRV/NTA/NDV per share (in £)	22.15	21.42	19.97

1 The fully diluted number of shares excludes treasury shares but includes 585,867 outstanding dilutive options (as at 31 December 2020: 1,196,996).

2 The fair values of the properties were determined on the basis of independent external valuations prepared in December 2021. The properties under development are measured at cost.

3 EPRA NTA and EPRA NDV reflect fair value net of transfer costs. Transfer costs are added back when calculating EPRA NRV.

4 NTA is calculated under the assumption that the Group does not intend to sell any of its properties in the long run.

	31 December 2020 £ million
	EPRA NRV (Net Reinstatement Value)	EPRA NTA⁴ (Net Tangible Assets)	EPRA NDV (Net Disposal Value)
NAV per the financial statements	309.6	309.6	309.6
Effect of exercise of options	13.2	13.2	13.2
Diluted NAV, after the exercise of options¹	322.8	322.8	322.8
Includes:
Revaluation of owned properties in operation (net of non-controlling interest)²	602.1	602.1	602.1
Revaluation of the JV interest held in two German properties (net of non-controlling interest)	3.2	3.2	3.2
Fair value of fixed interest rate debt	-	-	(84.5)
Deferred tax on revaluation of properties	-	-	(13.1)
Real estate transfer tax³	18.6	-	-
Excludes:
Fair value of financial instruments	(0.7)	(0.7)	-
Deferred tax	(13.4)	(13.4)	-
Intangibles as per the IFRS balance sheet	-	17.8	-
NRV/NTA/NDV	960.8	924.4	830.5
Fully diluted number of shares (in thousands)¹	43,521	43,521	43,521
NRV/NTA/NDV per share (in £)	22.08	21.24	19.08

1 The fully diluted number of shares excludes treasury shares but includes 1,196,996 outstanding dilutive options (as at 31 December 2019: 412,290).

2 The fair values of the properties were determined on the basis of independent external valuations prepared in December 2020. The properties under development are measured at cost.

3 EPRA NTA and EPRA NDV reflect fair value net of transfer costs. Transfer costs are added back when calculating EPRA NRV.

4 NTA is calculated under the assumption that the Group does not intend to sell any of its properties in the long run.

Below is a summary of the valuation basis of our assets as at 31 December 2021. The property market value, the discount rate and the cap rate have been taken from the independent valuer's report.

Region	Properties	Property market value £million	Discount rate	Cap rate
United Kingdom
London	6	901.9	7.5% - 9.0%	5.0% - 6.5%
Provinces	2	29.9	9.8% - 10.0%	7.3% - 7.5%
The Netherlands
Amsterdam	4	238.5	8.0% - 9.8%	5.5% - 7.3%
Provinces	2	35.9	9.8% - 9.8%	7.3% - 7.3%
Germany	3	87.2	8.5% - 9.3%	6.0% - 6.8%
Croatia
Hotels and apartments	10	139.7	9.0% - 10.0%	7.0% - 8.0%
Campsites	8	113.4	9.0% - 11.0%	7.0% - 9.0%
Others	3	50.4	6.3% - 9.5%	5.0% - 9.0%

Cash flow and EPRA earnings

2021 is the second consecutive year the Group's trading is heavily affected by the pandemic. Although the valuations reflect a forward outlook and expected recovery of the industry, the reported cash flow and earnings look backwards. The Group reported adjusted EPRA earnings of £(18.8) million (2020: £(52.1) million) and adjusted EPRA earnings per share of (44) pence (2020: (123) pence). These negative earnings are in sharp contrast to the Group's 2019 EPRA earnings of 128 pence per share). In their valuations, valuators assess a return to 2019 trading in 2024.

	£ million
Group's quarterly cash flow for 2021	Q1	Q2	Q3	Q4	Total
Operational cash flow (EBITDA and working capital)	(8.2)	3.0	31.7	(0.8)	25.7
Investment in properties and new acquisitions	(10.6)	(17.5)	(16.2)	(57.5)	(101.8)
Debt service³	(9.1)	(11.5)	(11.5)	(18.0)	(50.1)
New facilities and movement in restricted cash	16.4	18.3	8.1	28.1	70.9
Loan repayments	-	(40.4)	-	-	(40.4)
Joint venture transaction²	-	125.8	-	-	125.8
Other exceptional items (including FX)	(2.8)	0.3	(4.5)	(0.5)	(7.5)
Total cash movement	(14.3)	78.0	7.6	(48.7)	22.6

Cash and cash equivalents at beginning of period	114.2	99.9	177.9	185.5	114.2
Cash and cash equivalents at end of period	99.9	177.9	185.5	136.8	136.8

Undrawn facilities at end of period¹	69.0	60.0	77.2	76.8	76.8

1 The amount of undrawn facilities as at 31 December 2021 and 30 September 2021 comprise of the £40 million undrawn amount under the CLBILS facility and the £20 million undrawn amount under the Park Plaza London Waterloo facility and €20 million undrawn amount under the working capital facility entered by Arena on 20 September 2021. The amount of undrawn facilities as at 30 June 2021 comprise of the £40 million undrawn amount under the CLBILS facility and the £20 million undrawn amount under the Park Plaza London Waterloo facility. The amount of undrawn facilities as at 31 March 2021 comprise of £17.0 million undrawn amount under the CLBILS facility, £14.8 million undrawn amount under the Park Plaza London Waterloo facility and access to £37.2 million undrawn amount under the art'otel London Hoxton facility which was cancelled due to the Group entering into a joint venture with Clal.

2 Comprise of the £113.7 million cash received as part of entering into a long-term partnership with Clal, including the further cash injection of £12.1 million to fund the remaining equity commitments of the art'otel London Hoxton development project.

3 Including leases, unit holders in Park Plaza Westminster Bridge London.

The main adjustment to the normalised profit included in the Group's financial statements is adding back the IFRS depreciation charge, which is based on assets at historical cost, and replacing it with a charge calculated at 4% of the Group's total revenues. This represents the Group's expected average cost to maintain the estate in good quality. The basis for calculating the Company's 2021 adjusted EPRA earnings is set out in the table below:

Reconciliation of reported earning to adjusted EPRA earnings	12 months ended 31 December 2021 £ million	12 months ended 31 December 2020 £ million
Earnings attributed to equity holders of the parent company	(52.1)	(81.7)
Depreciation and amortisation expenses	43.3	46.6
Revaluation of Park Plaza County Hall London Income Units	(0.6)	2.4
Changes in fair value of financial instruments	(1.7)	0.2
Non-controlling interests in respect of the above³	(6.4)	(8.1)
EPRA earnings	(17.5)	(40.6)
Weighted average number of shares (LTM)	42,539,340	42,466,006
EPRA earnings per share (in pence)	(41)	(96)
Company-specific adjustments:¹
Capital loss on buy-back of Income Units in Park Plaza Westminster Bridge London	0.5	-
Remeasurement of lease liability⁴	3.6	3.4
Other non-recurring expenses (including preopening expenses)⁹	(0.7)	2.0
Loan early repayment break costs¹³ (see note 15b)	0.5	-
Business combination acquisition costs¹²	1.0	-
Government settlement purchase of Hotel Riviera⁷	-	1.5
Settlement of legal claim⁶	3.1	-
Adjustment of lease payments⁵	(2.3)	(2.6)
Insurance settlement¹⁰	-	(10.0)
One off tax adjustments⁸	(3.6)	(1.8)
Maintenance CAPEX²	(5.7)	(4.0)
Non-controlling interests in respect of the above³	2.3	-
Company adjusted EPRA earnings¹	(18.8)	(52.1)
Company adjusted EPRA earnings per share (in pence)	(44)	(123)
Reconciliation company adjusted EPRA earnings to normalised profit before tax
Company adjusted EPRA earnings	(18.8)	(52.1)
Reported depreciation¹¹	(38.9)	(41.3)
Non-controlling interest in respect of reported depreciation	6.3	8.1
Maintenance CAPEX²	5.7	4.0
Non-controlling interest on maintenance CAPEX and the company-specific adjustments	(2.3)	-
Adjustment of lease payments⁵	2.3	2.6
One off tax adjustments⁸	3.6	1.8
(Loss)/profit attributable to non-controlling interest	(0.4)	(12.2)
Reported tax	(5.0)	(0.7)
Normalised (loss)/profit before tax	(47.5)	(89.8)

1 The 'Company-specific adjustments' represent adjustments of non-recurring or non-trading items.

2 Calculated as 4% of revenues, which represents the expected average maintenance capital expenditure required in the operating properties.

3Non-controlling interests include the non-controlling shareholders in Arena, third-party investors in income units of Park Plaza Westminster Bridge London and the non-controlling shareholders in the parternship with Clal that was entered into in June 2021.

4 Non cash revaluation of finance lease liability relating to minimum future CPI/RPI increases.

5 Lease cash payments which are not recorded as an expense in the Group's income statement due to the implementation of IFRS 16.

6 Relates to a settlement reached in a legal dispute in Croatia (see Note 25a in the annual consolidated financial statements).

7 Execution of the sale and purchase agreement with the Republic of Croatia related to Guest House Riviera Pula (see Note 5d in the annual consolidated financial statements).

8 Mainly relates to deferred tax asset recorded in 2021 and investment tax credit received in Croatia in 2020. (see Note 27f in the annual consolidated financial statements)

9 Mainly relates to profit and loss on disposal of property, plant and equipment

10 Net insurance proceeds received in relation to one of the Group's UK hotels.

11 Reported depreciation excluding impairments.

12 Business combination acquisition costs (see Note 3a and 3b in the annual consolidated financial statements).

13 Loan early repayment break costs (see note 15b in the annual consolidated financial statements).

Other EPRA measurements

Given that the Group's asset portfolio is comprised of hotels, resorts and campsites which are also operated by the Group, a few of EPRA's performance measurements, which are relevant to real estate companies with passive rental income, have not been disclosed as they are either not relevant or non-existent. Those EPRA performance measurements include EPRA Net Initial Yield, EPRA 'Topped-up' NIY, EPRA Vacancy Rate and EPRA Cost Ratios.

Funding

Throughout the pandemic, in the last two years, all of the Group's lenders have again been supportive by providing additional facilities, providing waivers on debt covenant testing and by waiving amortisation obligations. After reviewing forecast scenarios we have liaised again with our lenders and agreed the postponement of financial covenant testing on trading until 2023. The Group is currently in compliance with respect to all its loan-to-value covenants.

The Group increased a £30 million revolving credit facility, backed by the UK Government, to £40 million (fully undrawn at balance sheet date), and entered into a €20 million (£16.8 million) working capital facility in Croatia (fully undrawn at balance sheet date). Post balance sheet it extended a €10 million (£9.1 million) term facility, backed by the Dutch Government, with one year, now maturing in August 2024. All these facilities are secured with the Group's current banking partners.

In addition, the Group signed a new €10.5 million (£8.8 million) facility to fund the acquisition in Austria. Post balance it signed a €25 million mortgage facility to fund the acquisition and planned refurbishment of the hotel in Rome.

The Group's total assets (properties at fair value) represent a value after the deduction of lease liabilities and unit holder liabilities. Accordingly, in the total loan-to-value (LTV) analysis of the Group, management considers the value of the freehold and long leasehold assets (net of these liabilities) compared with its bank funding (i.e. excluding the lease and unit holder liabilities), which management believes is the most accurate representation of the Group's total leverage position.

	£ million
Net debt leverage reconciliation	As report in the annual financial statement	EPRA NRV adjustment	EPRA NRV values
Balance sheet
PP&E	1,236.0	597.8	1,833.8
Right-of-use asset	215.9	(215.9)	-
Lease Liabilities	(251.6)	251.6	-
Liability to income units in Westminster Bridge hotel	(124.6)	124.6	-
Net PP&E	1,075.7	758.1	1,833.8

Intangible assets	14.3		14.3
Investments in Joint ventures	4.3	6.5	10.8
Other assets and liabilities, net	(29.1)	11.7	(17.4)
Total assets net of finance leases and excluding cash	1,065.2	776.3	1,841.5

Bank/ institutional loans (short/long term)	768.1		768.1
Cash & cash equivalent and restricted cash	(150.1)		(150.1)
Net bank Debt	618.0		618.0

Total capital	447.2	776.3	1,223.5

Capital and net debt	1,065.2	776.3	1,841.5
Minority shareholders	(168.7)	(109.8)	(278.5)
Total capital employed PPHE shareholders	896.5	666.5	1,563.0

Gearing ratio	58.0%		33.6%

The Group reported a gross bank debt liability of £768.1 million (31 December 2020: £757.4 million) and net bank debt of £618.0 million (31 December 2020: £636.2 million). This reflects a net bank debt leverage of 33.6% (2020: 37.1%).

The table below provides a further breakdown of the Group's bank debt position.

Loan maturity profile at 31 December 2021 (£m)

	Total	1 year	2 years	3 years	4 years	5 years	Thereafter
£m	768.1	38.8	22.1	16.5	57.0	354.5	279.2

Average cost of bank debt 3.1%

Average maturity of bank debt 5.3 years

Key characteristics debt for operating properties

· Limited to no recourse to the Group

· Asset backed

· Borrowing policy 50-65% loan-to-value

· Portfolio and single asset loans

· 24 facilities with 12 different lenders

· Covenants on performance and value (facility level)

Cover ratios

	ICR¹	DSCR²
2021	0.4x	0.2x
2020	(1.2)x	(0.4)x
2019	4.4x	2.7x

1 EBITDA, less unitholder and lease payments, divided by bank interest.

2 EBITDA, less unitholder and lease payments, divided by the sum of bank interest and yearly loan redemption.

Other

Long-term partnership with Clal Insurance (Clal)

In June, the Group entered into a long-term partnership with Clal, a leading insurance and long-term savings company, in respect of Park Plaza London Riverbank and art'otel London Hoxton. As part of the transaction, PPHE received £125.8 million in cash and Clal was granted 5 million share appreciation rights (SAR) to have a value upside if the gap between the Group's latest reported EPRA NRV and its current market price narrows over the maturity period.

The SAR has a seven-year maturity with a strike price of £16 per share and the upside capped at £21 per share. Clal has also committed to a further cash injection of £12.1 million to fund its portion of the remaining equity commitments of the art'otel London Hoxton development project. Clal's investment, taking into account existing bank debt and remaining development costs, is based on a £263 million property valuation for Park Plaza London Riverbank and an all-in development budget cost of £279.3 million for the art'otel London Hoxton project. These valuations are in line with the Groups' reported NRV in December 2020.

The Group remains the majority owner of the hotels by retaining a 51% controlling stake in one joint venture company holding (JVCo), and through its management company has secured a 20-year hotel management agreement in respect of both hotels. Clal became a minority partner and owner of 49% of the shares in JVCo, holding indirectly the real estate and operations of these two properties.

This agreement provided the Group with an opportunity to raise liquidity on the back of its assets and leverage the equity invested in those assets, which is part of its strategy to have innovative ways in raising cash on the back of its balance sheet. Given the gap in the share price and the Group's NRV, management believes this method of raising liquidity is in the best interest of the Group. The additional liquidity will be recycled into the business and used to pursue new growth opportunities and to support the recovery ahead.

Dividend

Given the impact of the government restrictions due to the pandemic and the Group receiving substantial government support during the year across our operating regions, the Board is of the view that it is neither sustainable, nor appropriate to propose a dividend in respect of the year 2021.

The Board appreciates the importance of dividends and will review dividend payments during the next half year reporting period, in line with the recovery trajectory, the receipt of government support and the business returning to cash flow positive trading. Should the analysis on the financial performance allow, the Board intends to reinstate its progressive dividend policy. The recent investments made in progressing and extending our pipeline should aid the Group in achieving a positive cash flow in the near future.

Daniel Kos
Chief Financial Officer & Executive Director

BUSINESS REVIEW

UNITED KINGDOM

Property portfolio

The Group has a well-invested portfolio consisting of approximately 3,200 rooms in operation in the upper upscale segment of the London hotel market, and approximately 1,100 rooms in its London development pipeline. Four of the Group's London hotels are in the popular South Bank area of London, with further properties in the busy Victoria, fashionable Marylebone and well-connected Park Royal areas. There are also three properties in the UK regional cities of Nottingham, Leeds and Cardiff^2.

The Group has an ownership interest in nine properties: Park Plaza Westminster Bridge London, Park Plaza London Riverbank, Park Plaza London Waterloo, Park Plaza County Hall London², Park Plaza Victoria London, Park Plaza London Park Royal, Holmes Hotel London, Park Plaza Leeds and Park Plaza Nottingham. Park Plaza Cardiff² operates under a franchise agreement.

Total value of UK property portfolio¹ £932m (2020: £894m)

Financial performance

	Reported in GBP (£)
UK	Year ended 31 Dec 2021	Year ended 31 Dec 2020	% change
Total revenue	£75.3m	£56.5m	33.1%
EBITDAR	£11.7m	£1.9m	505.5%
EBITDA	£11.2m	£1.5m	665.5%
Occupancy	31.9%	29.0%	290 bps
Average room rate	£136.2	£116.6	16.8%
RevPAR	£43.4	£33.8	28.5%
Room revenue	£49.9m	£39.0m	28.2%
EBITDA %	14.9%	2.6%	1,230 bps

1 Independent valuation by Savills in December 2021 and excluding the London development sites art'otel London Hoxton and Westminster Bridge Road.

2 Revenues derived from these hotels are accounted for in Management and Holdings and their values and results are excluded from the data provided in this section.

Portfolio performance

The quality and location of the Group's portfolio in London positioned it well to benefit from improved activity as restrictions were eased.

Most of the Group's hotels in the UK (the Group's largest market) were closed from 6 January until 17 May 2021, in line with the UK Government's international and domestic travel restrictions due to the pandemic. All restaurants and bars within properties were also closed, significantly impacting the first half performance.

To help mitigate the impact of the property closures, the Group secured a commercial agreement with the Department of Health and Social Care (DHSC) to provide temporary accommodation for individuals arriving from 'red-list' countries. Park Plaza London Waterloo and Park Plaza Victoria London operated solely as quarantine hotels from May and July respectively. The DHSC set the service requirements to be provided by these hotels and was responsible for the provision of medical and security staff. The hotel team members had limited contact with guests during their stay. These agreements ceased in early November and both hotels reopened to the public.

Furthermore, the Group was very proud to be selected as the exclusive Official Player Hotel for the Wimbledon Championships by the All England Lawn Tennis Club (AELTC). Park Plaza Westminster Bridge London accommodated all the players and their support teams. The hotel provided full-service hospitality including testing and recovery centres, gyms, hospitality desks for players and highly tailored nutritional food and beverage offerings.

Together these commercial agreements provided the Group with alternative revenue streams during a period of property closures and low demand for non-essential stays.

On 17 May restrictions were eased which allowed the Group's UK hotels to reopen and welcome back guests for non-essential travel. Thereafter, activity levels and booking pace gradually improved, with demand primarily generated by domestic leisure guests. This trading momentum continued into the second half aided by the return of international travel, which resulted in both strong revenue generation and recovery in average room rates during Q3, in line with the Group's rate-driven strategy.

Corporate travel and meetings and events continued to grow month-by-month in the second half, albeit demand remained behind 2019 levels, and several events, such as awards dinners, took place in Q4. Booking pace slowed down from the second half of November due to the emerging of the Omicron variant.

Total reported revenue was £75.3 million (2020: £56.5 million), 36.3% of 2019 levels. Reported RevPAR was £43.4 (2020: £33.8 million), 32.5% of 2019 levels, driven by a recovery in average room rate to £136.2 (2020: £116.6), and occupancy of 31.9% (2020: 29.0%).

Notwithstanding the actions taken, Reported EBITDAR was £11.7 million (2020: £1.9 million), and EBITDA was £11.2 million (2020: £1.5 million). During the period, the Group benefited from approximately £12.1 million of support in the form of grants and business rates relief.

Asset management projects

The Residence at Holmes Hotel London is a unique self-contained event space, which was completed and launched during 2021. This versatile meeting and events space offers several uniquely designed meeting rooms which can be booked individually or together, including the use of a private pantry and billiards room, to host a fully private function such as team away days and collaborative group sessions.

Development pipeline

The Group's largest pipeline project is the development of art'otel London Hoxton, located in one of London's most exciting neighbourhoods. This £180+ million mixed-use scheme will accommodate a premium lifestyle hotel with 343 rooms and suites, five floors of office space, as well as wellness facilities, a gym and swimming pool, and art gallery space. Construction of the building has progressed to plan, with subterranean works and the core structure complete, and 17 out of 27 floors constructed. The project is expected to complete in early 2024.

Two further mixed-use development projects are planned for London. In west London, detailed plans are being prepared for the Group's site adjacent to Park Plaza London Park Royal. The plans include a 465-room hotel, 6,000m² of light industrial space and 3,000m² of state-of-the-art co-working offices, a gym and swimming pool. The site benefits from its proximity to London Heathrow Airport and Wembley Stadium, and it has easy access to central London via road and rail. Planning permission was successfully obtained in late 2020.

Planning applications for the Group's vacant freehold site on London's South Bank (79-87 Westminster Bridge Road) have been submitted. Subject to obtaining planning, the Group intends to convert the property into a new 186 room hotel and approximately 750m² earmarked for office space and light industrial use.

Furthermore, development of art'otel London Battersea Power Station by the Battersea Power Station Development Company is progressing well and the hotel is expected to open during the second half of 2022. The hotel will be managed by the Group under a long-term contract.

The two high-profile London art'otel projects are part of the Company's strategic plan to operate and develop a collection of premium lifestyle art'otels across existing and new markets including Amsterdam, London, Rome and Zagreb.

The UK hotel market*

Following on from a severely disrupted 2020, COVID-19 continued to negatively affect the hospitality industry in 2021 with many countries extending or reimposing restrictions on domestic and international travel with the rise of the Omicron variant. This led to hotels in our markets either closing completely or having their offerings severely restricted and therefore affecting their attractiveness to the limited demand.

This inconsistency in the market has made performance comparisons, at a hotel competitor set level, very unpredictable and unreliable but at a Country/City market data level, through the STR TRI Report, we can see the year-on-year changes. Below is based on full inventory availability versus 2020.

On a full-year basis, the impact on the UK market was an 80.4% increase in RevPAR to £40.3, which was the result of a 53.1% increase in occupancy to 46.8% and a 17.8% increase in average room rate, to £86.2.

Full-year performance saw London, our main UK market, improving by 59.7% in RevPAR to £45.3. Occupancy increased by 46.8% to 37.4% with an increase in average room rate of 8.8% to £121.0.

* Source: STR European Hotel Review TRI: December 2021.

THE NETHERLANDS

Property portfolio

The Group has an ownership interest in three hotels in the centre of Amsterdam and a fourth property located near Amsterdam Airport Schiphol, and it has two owned hotels in Utrecht and in Eindhoven.

Total value of the Netherlands property portfolio¹ £274m (2020: £280m)

Financial performance

	Reported in Pound Sterling² (£)			Reported in local currency Euro (€)
The Netherlands	Year ended 31 Dec 2021	Year ended 31 Dec 2020	% change	Year ended 31 Dec 2021	Year ended 31 Dec 2020	% change
Total revenue	£10.4m	£14.9m	(30.8)%	€12.1m	€16.8m	(28.2)%
EBITDAR	£1.1m	£0.0m	n/a	€1.3m	€0.0m	n/a
EBITDA	£1.1m	£(0.1)m	n/a	€1.2m	€(0.1)m	n/a
Occupancy	16.3%	25.3%	(910)bps	16.3%	25.3%	(910)bps
Average room rate	£109.9	£98.3	11.7%	€128.1	€110.6	15.8%
RevPAR	£17.9	£24.9	(28.2)%	€20.8	€28.0	(25.6)%
Room revenue	£7.0m	£9.8m	(28.4)%	€8.2m	€11.0m	(25.8)%
EBITDA %	10.4%	(0.4)%	1,070bps	10.4%	(0.4)%	(1,070)bps

1 Independent valuation by Savills in December 2021.

2 Average exchange rate from Euro to Pound Sterling for the year to December 2021 was 1.17 and for the year to December 2020 was 1.12, representing a 3.6% increase.

Portfolio performance

Trading in the year was severely impacted by extremely low demand due to government lockdown measures such as travel restrictions, curfews and the temporary closure of restaurants, cafés and bars. While hotels could remain open throughout, the impact of restrictions on demand resulted in the Group's hotels being either temporarily closed or operating at significantly reduced capacity during the first half. All restaurants and bars within the properties were closed.

Restrictions were eased from June and all properties (apart from one) reopened. Park Plaza Amsterdam Airport remained closed all year. As the second half progressed, restrictions on international travel were eased, particularly from the UK, an important source market, which led to improved booking momentum in the second half. Nonetheless, demand was primarily from domestic guests, with the Group's regional properties experiencing greater demand than city-centre locations.

However, in the autumn virus infection rates began to rise in The Netherlands, resulting in further government restrictions such as coronavirus entry-pass requirements for food and drink venues and events, and a 5pm evening curfew from 28 November. On 18 December a lockdown was introduced, adversely impacting trading.

Consequently, total revenue in Euros was €12.1 million (2020: €16.8 million), 19.6% of 2019 levels. RevPAR decreased to €20.8 (2020: €28.0). Average room rate increased to €128.1 (2020: €110.6). Occupancy reflected extremely low demand at 16.3% (2020: 25.3%).

EBITDA (in Euros) was €1.2 million (2020: €(0.1) million), despite the Group's continued focus on its cost base and usage of the government support schemes available. During the period, the Group benefited from approximately £6.5 million (€7.5 million) of payroll support and fixed costs subsidies.

Asset management projects

The Group's flagship property, art'otel Amsterdam, reopened in June. In November, a brand new restaurant design and concept was launched in partnership with two Michelin starred Portuguese chef Henrique Sá Pessoa. The Group also completed a refurbishment of a new all-day café, Carsten's Café Amsterdam, positioned near the entrance of the hotel.

Due to the measures introduced, both restaurants have been open for a short period of time, but when they were they generated excellent guest reviews and publicity and we expect that when markets reopen both will regain momentum.

Asset management projects under consideration for 2022 include the redevelopment and launch of the gym, wellness and swimming pool areas of Park Plaza Victoria Amsterdam and art'otel Amsterdam.

The Netherlands hotel market*

On a full-year basis, the impact on the Dutch market was a 11.8% increase in RevPAR to €29.3, which was the result of a 10.9% increase in occupancy to 31.1% and a 0.8% increase in average room rate, to €94.1.

Full-year performance saw Amsterdam, our main market in The Netherlands, improving 5.3% in RevPAR to €26.4. Occupancy increased by 7.7% to 25.7% with a reduction in average room rate of 2.3% to €102.7.

* Source: STR European Hotel Review TRI: December 2021.

CROATIA

Property portfolio

The Group's subsidiary, Arena Hospitality Group d.d. (Arena), owns and operates a Croatian portfolio of seven hotels, four resorts and eight campsites, all of which are in Istria, Croatia's most prominent tourist region. Four of Arena's properties in Croatia are Park Plaza branded whereas the remainder of their portfolio operates independently or as part of the Arena Hotels & Apartments and Arena Campsites brands. Hotel Brioni was closed during the season with our repositioning programme nearing completion and Hotel Riviera was closed while we are finalising our redevelopment plans.

Total value of Croatian property portfolio¹ £253m (2020: £243m)

Financial performance

	Reported in Pound Sterling² (£)			Reported in local currency HRK
Croatia	Year ended 31 Dec 2021	Year ended 31 Dec 2020	% change	Year ended 31 Dec 2021	Year ended 31 Dec 2020	% change
Total revenue	£44.6m	£18.7m	138.6%	HRK 392.2m	HRK 158.7m	147.2%
EBITDAR	£16.4m	£1.1m	1,381.1%	HRK 143.4m	HRK 9.4m	1,432.8%
EBITDA	£14.6m	£0.4m	3,923.6%	HRK 127.6m	HRK 3.1m	4,064.1%
Occupancy³	46.6%	30.4%	1,620bps	46.6%	30.4%	1,620bps
Average room rate³	£101.0	£89.8	12.5%	HRK 885.8	HRK 761.1	16.4%
RevPAR³	£47.1	£27.3	72.5%	HRK 412.6	HRK 231.1	78.5%
Room revenue³	£21.6m	£8.1m	167.7%	HRK 189.6m	HRK 68.4m	177.0%
EBITDA %	32.6%	1.9%	3,070bps	32.6%	1.9%	3,070bps

1 Independent valuation by Zagreb nekretnine Ltd in December 2021 and excluding Hotel Brioni (Pula) and Zagreb which are under development.

2 Average exchange rate from Croatian Kuna to Pound Sterling for the year to December 2021 was 8.77 and for the year to December 2020 was 8.47, representing a 3.5% change.

3 The room revenue, average room rate, occupancy and RevPAR statistics include all accommodation units at hotels and self-catering apartment complexes and excludes campsite and mobile homes.

Portfolio performance

Operations in Croatia are highly seasonal, with guest visits mainly occurring from June to September. Most of the Group's properties typically open and commence trading around the Easter period and close by late September to mid-October.

In 2021, the opening of the majority of the Group's hotels and apartment complexes was delayed until June due to government restrictions.

By the end of June, all properties had reopened and were operating at full capacity. As travel restrictions were eased booking activity began to increase, driven by strong demand from Germany, Austria and other Central Eastern European countries. As a service to guests, Arena provided PCR test locations at several of its properties.

As a result of the above, revenue in the third quarter (peak season) recovered strongly, to approximately 93% of revenue in the same period in 2019. This was achieved despite continued travel restrictions from the UK (an important source market), and a reduced number of flights to and from Pula airport. Notably the financial contribution from the Group's campsites, which are high margin, was greater than in previous years due to their accessibility by car from surrounding countries and the customer perceptions of their safety.

In 2021, total revenue (in Croatian Kuna) was HRK 392.2 million (2020: HRK 158.7 million). RevPAR increased to HRK 412.6, reflecting an improvement in occupancy to 46.6% (2020: 30.4%) and a 16.4% improvement in average room rate to HRK 885.8 (2020: HRK 761.1).

The region reported an EBITDA of HRK 127.6 million, up 4,064.1% year-on-year (2020: HRK 3.1 million). This included the utilisation of government grants to support payroll costs and fixed costs subsidies until July 2021, which amounted to approximately HRK 23.6 million (£2.7 million).

The Group employs local seasonal workers and workers from abroad, mainly neighbouring countries, during the peak trading period. However, the European labour market pressures experienced by all hotel companies made recruit particularly challenging in the year. To mitigate this, operations in Croatia were supported by German and Hungarian team members, and colleagues took on versatile roles in the hotels with office staff supporting hotel operations, such as housekeeping and food and beverage, during the peak season.

Looking ahead to 2022, the Group has agreed a partnership with TUI to market the Arena Hotel Medulin, located on the Istrian Peninsula, on an exclusive basis under its TUI Blue Hotel brand. The partnership signals confidence both in the Group's proposition and wider market recovery.

Development projects

The Group's most significant investment project in Croatia is the extensive repositioning of Grand Hotel Brioni in Pula to an upper upscale 227-room full-service hotel, at an investment of HRK 260 million (£30 million). The property, which is located 50 metres from, and with stunning views over, the Adriatic Sea, will be relaunched for the 2022 summer season as Grand Hotel Brioni Pula.

In September, the Group commenced conversion of its iconic property (under a 45-year lease agreement) in Zagreb city centre from office space to a premium lifestyle art'otel. The project is estimated to cost HRK 135 million (£15 million), and the hotel is expected to be relaunched in Q4 2022.

The Group is also investing HRK 38 million (£4 million) in the Arena Stoja Campsite. The project will be split into two phases. Phase one, which is expected to complete in Q2 2022, will see an investment in 75 new mobile homes, a new campsite entrance and Reception, and a new Illy Café.

These investment projects will further strengthen the Group's presence in these attractive locations.

GERMANY

Property portfolio

The Group's portfolio in the region includes four properties in Berlin and one hotel each in Cologne, Nuremberg and Trier. Hotels with an ownership interest include: Park Plaza Berlin Kudamm,³ Park Plaza Nuremberg, art'otel berlin mitte³, art'otel berlin kudamm and art'otel cologne. Park Plaza Wallstreet Berlin Mitte operates under an operating lease and Park Plaza Trier³ operates under a franchise agreement.

Total value of German property portfolio¹ £87m (2020: £87m)

Financial performance

	Reported in GBP² (£)			Reported in local currency Euro (€)
Germany	Year ended 31 Dec 2021	Year ended 31 Dec 2020	% change	Year ended 31 Dec 2021	Year ended 31 Dec 2020	% change
Total revenue	£6.6m	£7.8m	(14.6)%	€7.7m	€8.7m	(11.5)%
EBITDAR	£6.7m	£(0.3)m	n/a	€7.8m	€(0.3)m	n/a
EBITDA	£6.7m	£(0.3)m	n/a	€7.8m	€(0.3)m	n/a
Occupancy	26.5%	27.1%	(60)bps	26.5%	27.1%	(60)bps
Average room rate	£77.1	£85.3	(9.6)%	€89.8	€95.9	(6.3)%
RevPAR	£20.4	£23.1	(11.5)%	€23.8	€26.0	(8.3)%
Room revenue	£5.3m	£6.0m	(11.7)%	€6.2m	€6.8m	(8.5)%
EBITDA %	100.8%	(3.3)%	10,410bps	100.8%	(3.3)%	10,410bps

1 Independent valuation by Savills in December 2021 with the exception of Park Plaza Wallstreet Berlin Mitte which is measured at book value.

2 Average exchange rate from Euro to Pound Sterling for the year to December 2021 was 1.17 and for the year to December 2020 was 1.12, representing a 3.6% increase.

3 Revenues derived from these hotels are accounted for in Management and Holdings and their values and results are excluded from the data provided in this section.

Portfolio performance

The region showed varying signs of recovery as the year progressed, supported by the markets reopening and the continuation of vaccination programmes. As restrictions were eased in the third quarter, the Group saw good demand for weekend leisure business. Park Plaza Nuremberg and art'otel Cologne performed better than the Group's Berlin hotels due to a strong domestic leisure demand for these destinations. Business travel remained subdued. Rising infection rates in Germany resulted in the increasing of restrictions in the autumn and the cancellation of Christmas markets and fairs which typically support demand for guest stays.

As demand improved, measures were taken to mitigate labour constraints, including an increased focus on recruitment from international markets, increased recruitment activity through digital platforms, sharing resources with Croatia and Hungary and more housekeeping services were brought in-house to reduce exposure to third-party agencies.

Total revenue was €7.7 million (2020: €8.7 million). RevPAR was €23.8 (2020: €26.0), due to a sharp fall in occupancy to 26.5% (2020: 27.1%). Average room rate reduced by 6.3% to €89.8 (2020: €95.9).

EBITDA was positively impacted as the Group continued to utilise government grants to support payroll expenses ('Kurzarbeit' German state scheme) and received fixed costs subsidies until August 2021, which amounted to €9.8 million (£8.4 million).

German hotel market*

The hospitality industry continued to be negatively affected by the pandemic in 2021, with hotels in our markets closing completely or having their offerings severely restricted. These inconsistencies in the market have made performance comparisons, at a hotel competitor set level, unpredictable and unreliable. However, at a Country/City market data level, we can see the year-on-year changes. Below is based on full inventory availability versus 2020. The impact on the German market was a 7.0% increase in RevPAR to €27.6; a result of an 8.1% increase in occupancy to 30.8% and a 1.0% reduction in average room rate, to €89.5. Berlin, our main market in Germany, improved 19.5% in RevPAR to €28.8. Occupancy increased by 21.2% to 34.6% with a reduction in average room rate of 1.4% to €83.2.

* Source: STR European Hotel Review TRI: December 2021.

OTHER MARKETS - ITALY, HUNGARY, SERBIA AND AUSTRIA

Due to the Group's recent acquisitions, the German portfolio will now be reported on a standalone basis, with the performance of the Group's properties in Austria, Hungary, Italy and Serbia reported separately.

In line with the Group's strategy to expand its presence across Central, Eastern and Southern Europe, the Group has had an exciting 24 months, with new acquisitions in Belgrade (Serbia), Nassfeld (Austria) and Rome (Italy).

Rome, Italy

In November 2021 the Group entered the Italian hotel market with the €33.1 million (£28.3 million) acquisition of the Londra & Cargill Hotel, a 4-star property in a prime central location in the city of Rome. Rome is one of southern Europe's key gateway capital cities which offers robust fundamentals for hotel investment over the medium to long term. The Group has continued to operate the hotel, which currently offers 101 rooms and suites, a restaurant, bar, meeting facilities and private parking. Plans are being finalised to reposition the property to an upper upscale lifestyle art'otel and increase the number of rooms from 101 to 110. The Group expects to relaunch the hotel in early 2023.

Nassfeld, Austria

In December 2021, the FRANZ Ferdinand Mountain Resort Nassfeld in Austria was acquired for approximately £12.8 million. The property is superbly located next to the valley station of the Nassfeld Ski Resort in Carinthia, providing access to 100 kilometres of ski slopes. This 4-star hotel offers 144 family rooms, a restaurant, bar, conference rooms, private car park, wellness and sauna and children's facilities. The acquisition also included a detached property consisting of 21 rooms currently used as employee accommodation, and a site adjacent to the hotel, currently in use as a terrace, which is earmarked for future development of a swimming pool. The transaction was completed prior to the start of winter season 2021/2022.

Belgrade, Serbia

In December 2020, we completed the acquisition of 88 Rooms Hotel near the old town of Belgrade in Serbia. We subsequently reopened the hotel in May 2021 when the markets started reopening. During the period the Group received approximately £4,300 (DNR 587,105) in payroll grants. We are currently developing plans to refurbish and relaunch this hotel in due course.

Budapest, Hungary

art'otel Budapest in Hungary was closed throughout the year (and remains closed) due to low levels of demand resulting from government lockdown measures. The Group utilised a government scheme which provided 50% payroll support during the first five months of the year at a value of approximately £39,000 (HUF 16.2 million). The Group has started to prepare refurbishment plans for this property in 2021.

MANAGEMENT AND CENTRAL SERVICES

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. For the year ended 31 December 2021, the segment showed a negative EBITDA as both internally and externally charged management fees did not exceed the costs in this segment.

Management, Group Central Services and licence, sales and marketing fees are calculated as a percentage of revenues and profit, and therefore these are affected by underlying hotel performance.

	Reported in GBP (£)
	Year ended 31 Dec 2021	Year ended 31 Dec 2020
Total revenue before elimination	£18.0m	£14.4m
Revenues within the consolidated Group	£(14.3)m	£(11.6)m
External and reported revenue	£3.7m	£2.8m
EBITDA	£(7.6)m	£(11.3)m

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

	As at 31 December
	2021 £'000	2020 £'000
Assets
Non-current assets:
Intangible assets	14,290	17,754
Property, plant and equipment	1,236,000	1,201,358
Right-of-use assets	215,921	223,793
Investment in joint ventures	4,315	4,741
Other non-current assets	16,386	15,958
Restricted deposits and cash	8,121	2,261
Deferred income tax asset	10,221	6,724
	1,505,254	1,472,589
Current assets:
Restricted deposits and cash	5,204	4,777
Inventories	1,840	2,260
Trade receivables	6,811	3,473
Other receivables and prepayments	19,435	8,044
Other current financial assets	22	27
Cash and cash equivalents	136,802	114,171
	170,114	132,752
Total assets	1,675,368	1,605,341
Equity and liabilities
Equity:
Issued capital	-	-
Share premium	131,229	131,389
Treasury shares	(3,482)	(3,482)
Foreign currency translation reserve	3,806	20,804
Hedging reserve	(434)	(703)
Accumulated earnings	147,350	161,587
Attributable to equity holders of the parent	278,469	309,595
Non-controlling interests	168,742	95,358
Total equity	447,211	404,953
Non-current liabilities:
Borrowings	729,284	721,006
Provision for concession fee on land	5,057	5,399
Financial liability in respect of Income Units sold to private investors	124,551	126,155
Other financial liabilities	253,362	244,818
Deferred income taxes	7,236	8,472
	1,119,490	1,105,850
Current liabilities:
Trade payables	16,650	6,502
Other payables and accruals	53,177	51,667
Borrowings	38,840	36,369
	108,667	94,538
Total liabilities	1,228,157	1,200,388
Total equity and liabilities	1,675,368	1,605,341

The accompanying notes are an integral part of the consolidated financial statements. Date of approval of the financial statements 28 February 2022. Signed on behalf of the Board by Boris Ivesha and Daniel Kos.

Boris Ivesha

President & Chief Executive Officer

Daniel Kos

Chief Financial Officer & Executive Director

CONSOLIDATED INCOME STATEMENT

	Year ended 31 December
	2021 £'000	2020 £'000
Revenues	141,377	101,787
Operating expenses	(113,808)	(110,870)
EBITDAR	27,569	(9,083)
Rental expenses	(2,504)	(1,004)
EBITDA	25,065	(10,087)
Depreciation and amortisation	(43,283)	(46,624)
EBIT	(18,218)	(56,711)
Financial expenses	(31,369)	(35,526)
Financial income	333	391
Other expenses	(9,418)	(9,736)
Other income	3,784	10,299
Net expenses for financial liability in respect of Income Units sold to private investors	(1,949)	(2,579)
Share in results of joint ventures	(718)	(826)
Loss before tax	(57,555)	(94,688)
Income tax benefit	5,051	724
Loss for the year	(52,504)	(93,964)

Loss attributable to:
Equity holders of the parent	(52,129)	(81,731)
Non-controlling interests	(375)	(12,233)
	(52,504)	(93,964)

Basic and diluted loss per share (in Pound Sterling)	(1.23)	(1.92)

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	Year ended 31 December
	2021 £'000	2020 £'000
Loss for the year	(52,504)	(93,964)
Other comprehensive income (loss) to be recycled through profit and loss in subsequent periods:*
Loss from cash flow hedges	507	(90)
Foreign currency translation adjustments of foreign operations	(23,083)	16,867
Other comprehensive income (loss)	(22,576)	16,777
Total comprehensive loss	(75,080)	(77,187)

Total comprehensive loss attributable to:
Equity holders of the parent	(68,858)	(69,069)
Non-controlling interests	(6,222)	(8,118)
	(75,080)	(77,187)

* There is no other comprehensive income that will not be reclassified to the profit and loss in subsequent periods.

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

In £'000	Issued capital¹	Share premium	Treasury shares	Foreign currency translation reserve	Hedging reserve	Accumulated earnings	Attributable to equity holders of the parent	Non-controlling interests	Total equity
Balance as at 1 January 2021	-	131,389	(3,482)	20,804	(703)	161,587	309,595	95,358	404,953
Loss for the year						(52,129)	(52,129)	(375)	(52,504)
Other comprehensive income (loss) for the year				(16,998)	269		(16,729)	(5,847)	(22,576)
Total comprehensive income (loss)				(16,998)	269	(52,129)	(68,858)	(6,222)	(75,080)
Share-based payments		1,182					1,182	86	1,268
Exercise of options settled in cash		(1,342)					(1,342)		(1,342)
Transactions with non-controlling interests						37,892	37,892	79,520	117,412
Balance as at 31 December 2021		131,229	(3,482)	3,806	(434)	147,350	278,469	168,742	447,211
Balance as at 1 January 2020	-	130,260	(3,636)	8,094	(655)	243,233	377,296	103,465	480,761
Loss for the year	-	-	-	-	-	(81,731)	(81,731)	(12,233)	(93,964)
Other comprehensive income (loss) for the year	-	-	-	12,710	(48)	-	12,662	4,115	16,777
Total comprehensive income (loss)	-	-	-	12,710	(48)	(81,731)	(69,069)	(8,118)	(77,187)
Issue of shares	-	870	154	-	-	-	1,024	-	1,024
Share-based payments	-	259	-	-	-	85	344	75	419
Transactions with non-controlling interests	-	-	-	-	-	-	-	(64)	(64)
Balance as at 31 December 2020	-	131,389	(3,482)	20,804	(703)	161,587	309,595	95,358	404,953

¹ No par value.

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

	Year ended 31 December
	2021 £'000	2020 £'000
Cash flows from operating activities:
Loss for the year	(52,504)	(93,964)
Adjustment to reconcile loss to cash provided by operating activities:
Financial expenses and expenses for financial liability in respect of Income Units sold to private investors	33,318	38,105
Financial income	(333)	(268)
Income tax benefit	(5,051)	(724)
Loss on buy-back of Income Units sold to private investors	543	-
Remeasurement of lease liability	3,565	3,369
Revaluation of Park Plaza County Hall London Units	(602)	2,402
Capital loss (gain) on sale of fixed assets, net	(996)	1,457
Gain from marketable securities	-	(123)
Impairment of property, plant and equipment	4,424	2,500
Impairment of Right-of-use assets	-	2,781
Share in results of Joint Ventures	718	826
Share appreciation rights revaluation	(1,750)	-
Depreciation and amortisation	38,859	41,343
Share-based payments	1,268	419
	73,963	92,087
Changes in operating assets and liabilities:
Decrease in inventories	337	143
(Increase) decrease in trade and other receivables	(19,167)	13,505
Increase (decrease) in trade and other payables	21,679	(8,529)
	2,849	5,119
Cash paid and received during the period for:
Interest paid	(33,729)	(31,412)
Interest received	316	173
Taxes paid	(469)	(1,076)
Taxes received	-	365
	(33,882)	(31,950)
Net cash used in operating activities	(9,574)	(28,708)

Cash flows from investing activities:
Investments in property, plant and equipment	(58,582)	(57,388)
Disposal of property, plant and equipment	1,406	317
Investments in Intangible assets	(176)	(305)
Acquisition of Londra & Cargill in Rome, Italy	(28,298)	-
Acquisition of Arena Franz Ferdinand, Austria	(12,783)	-
Acquisition of Hotel 88 Rooms in Belgrade, Serbia	-	(5,350)
Loan to Joint Venture	(400)	(583)
Investment in Joint Venture	-	(2,207)
Increase in restricted cash	(6,332)	(1,613)
Decrease in marketable securities, net	-	5,318
Net cash used in investing activities	(105,165)	(61,811)
Cash flows from financing activities:
Proceeds from loans and borrowings	53,666	56,948
Buy-back of Income Units previously sold to private investors	(1,934)	-
Repayment of loans and borrowings	(26,653)	(7,530)
Repayment of leases	(6,825)	(1,567)
Net proceeds from transactions with non-controlling interest	124,562	(64)
Exercise of options settled in cash	(1,342)	-
Net cash provided by financing activities	141,474	47,787

Increase (decrease) in cash and cash equivalents	26,735	(42,732)
Net foreign exchange differences	(4,104)	3,874
Cash and cash equivalents at beginning of year	114,171	153,029
Cash and cash equivalents at end of year	136,802	114,171

Non-cash items:
Lease additions and lease remeasurement	4,226	15,143
Outstanding payable on investments in property, plant and equipment	3,469	3,918
Issuance of shares for acquisition of art'otel rights	-	1,024

The accompanying notes are an integral part of the consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1: General

a. The consolidated financial statements of PPHE Hotel Group Limited (the 'Company') and its subsidiaries (together the 'Group') for the year ended 31 December 2021 were authorised for issuance in accordance with a resolution of the Directors on 28 February 2022.

The Company was incorporated in Guernsey on 14 June 2007 and is listed on the Premium Listing segment of the Official List of the UK Listing Authority (the UKLA) and the shares are traded on the Main Market for listed securities of the London Stock Exchange.

b. Description of the Group business:

The Group is an international hospitality real estate group, which owns, co-owns and develops hotels, resorts and campsites, operates the Park Plaza^® brand in EMEA and owns and operates the art'otel^® brand.

The Group has interests in hotels in the United Kingdom, The Netherlands, Germany, Hungary, Serbia, Italy and Austria and hotels, self-catering apartment complexes and campsites in Croatia.

c. Assessment of going concern and liquidity:

In 2021, the ongoing challenges presented by the pandemic continued to cause severe disruption to the global hospitality sector, with government imposed domestic and international travel restrictions and social distancing measures in place for much of the year. The Group continued to take proactive measures to conserve cash in 2021. Actions mainly included utilisation of government support schemes available to the business across its market, such as government job support schemes (amounting to £12.1 million), reimbursement of fixed costs grants (amounting to £9.6 million) and the business rates holiday in the UK (amounting to saving of approximately £8 million). Furthermore, capital expenditure requirements for the Group's development pipeline have been prioritised, and discretionary spend has been reduced to business-critical investments only. The Board has not recommended a dividend payment to shareholders and future payments will be aligned to the recovery trajectory and performance of the business.

In 2021, the Group further strengthened its liquidity through raising £125.8 million in cash as part of its joint venture transaction with Clal (see note 6c(i)) and as at 31 December 2021 the Group continues to hold a strong liquidity position with an overall consolidated cash balance of £136.8 million. Furthermore, the Group fully repaid the drawn balance under the CLBILS facility and the Waterloo facility and currently has access to £76.8 million of undrawn facilities. Financial covenant testing of existing facilities have been postponed, where appropriate, to 2023.

Since the start of the COVID-19 pandemic multiple cash flow forecasts showing various scenarios have been modelled and reviewed by the Board to provide the basis for strategic actions taken across the business. The Directors have considered detailed cash flow projections for the next three-year period to 31 December 2024 which are constructed on a base case and a downside case basis. Having reviewed those scenarios together with the Group's strong cash position and the covenant waivers received, the Directors have a reasonable expectation that the Company is likely to continue in business for at least 12 months from the date of approval of the consolidated financial statements without implementing any further protective measures to the operational structure. Accordingly, the Directors continue to adopt the going concern basis in preparing the Financial Statements.

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
	2021 £'000	2020 £'000
Loss attributable to equity holders of the parent	(52,129)	(81,731)
Weighted average number of ordinary shares outstanding	42,539	42,466

Potentially dilutive instruments 177,027 in 2021 are not considered, since their effect is antidilutive (increase of loss per share) (2020: 140,140 were not considered, since their effect is antidilutive).

Note 3: Segments

For management purposes, the Group's activities are divided into Owned Hotel Operations and Management Activities (for further details see Note 14(c)(i)). Owned Hotel Operations are further divided into four reportable segments: The Netherlands, Germany, Croatia and the United Kingdom. Other includes individual hotels in Hungary, Serbia, Italy and Austria. 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 2021
	The Netherlands £'000	Germany £'000	United Kingdom £'000	Croatia £'000	Other¹ £'000	Management and Central Services £'000	Adjustments² £'000	Consolidated £'000
Revenue
Third party	10,352	6,618	75,277	44,618	853	3,659		141,377
Inter-segment						14,308	(14,308)
Total revenue	10,352	6,618	75,277	44,618	853	17,967	(14,308)	141,377
Segment EBITDA	1,071	6,671	11,221	14,556	(853)	(7,601)		25,065
Depreciation, amortisation and impairment								(43,283)
Financial expenses								(31,369)
Financial income								333
Net expenses for liability in respect of Income Units sold to private investors								(1,949)
Other income (expenses), net								(5,634)
Share in result of joint ventures								(718)
Profit before tax								(57,555)

¹Includes art'otel Budapest in Budapest, Hungary, 88 Rooms Hotel in Belgrade, Serbia, Londra & Cargill Hotel in Rome, Italy, FRANZ Ferdinand Mountain Resort in Nassfeld, Austria.

²Consist of inter-company eliminations.

The Netherlands £'000

Germany £'000

United Kingdom

£'000

Croatia

£'000

Other

£'000

Adjustments²

£'000

Consolidated £'000

Geographical information

Non-current assets¹

188,701

71,402

869,324

217,779

64,442

53,878

1,465,526

¹ Non-current assets for this purpose consists of property, plant and equipment, right-to-use assets and intangible assets.

² This includes the Non-current assets of Management and Central Services.

			Year ended 31 December 2020
	The Netherlands £'000	Germany £'000		United Kingdom £'000	Croatia £'000	Other¹ £'000	Management and Central Services £'000	Adjustments² £'000	Consolidated £'000
Revenue
Third party	14,948	7,750		56,544	18,729	1,056	2,760		101,787
Inter-segment							11,633	(11,633)	-
Total revenue	14,948	7,750		56,544	18,729	1,056	14,393	(11,633)	101,787
Segment EBITDA	(54)	(255)		1,466	362	(295)	(11,312)	-	(10,087)
Depreciation, amortisation
and impairment									(46,624)
Financial expenses									(35,526)
Financial income									391
Net expenses for liability in respect of Income Units sold to private investors									(2,579)
Other expenses, net									563
Share in result of joint ventures									(826)
Profit before tax									(94,688)

¹Includes art'otel Budapest in Budapest Hungary and 88 Rooms Hotel in Belgrade, Serbia.

²Consist of inter-company eliminations.

The Netherlands £'000

Germany

and Hungary £'000

United Kingdom

£'000

Croatia

£'000

Other

£'000

Adjustments²

£'000

Consolidated £'000

Geographical information

Non-current assets¹

207,844

79,053

854,517

216,532

19,937

65,022

1,442,905

¹Non-current assets for this purpose consists of property, plant and equipment, right-to-use assets and intangible assets.

²This includes the Non-current assets of Management and Central Services.

Note 4: Related parties

a. Balances with related parties

	As at 31 December
	2021 £'000	2020 £'000
Loans to joint ventures (see Note 6a)	5,222	5,066
Short-term receivables	56	-
Short-term payable	-	(88)
Payable to GC Project Management Limited	(50)	(903)
Payable to Gear Construction UK Limited	(1,082)	(1,862)

b. Transactions with related parties

	Year ended 31 December
	2021 £'000	2020 £'000
Cost of transactions with GC Project Management Limited	(60)	(2,784)
Cost of transactions with Gear Construction UK Limited	(27,735)	(13,527)
Rent income from sub-lease of office space	173	-
Interest income from jointly controlled entities (see note 6a)	101	95

c. Significant other transactions with related parties

(i) Construction of the art'otel London Hoxton - Following the approval by the independent shareholders, on 7 April 2020 the Group entered into a building contract with Gear Construction UK Limited ('Gear') for the design and construction of the art'otel London Hoxton hotel on a 'turn-key' basis (the 'building contract'). Under the building contract Gear assumes the responsibility for the design and construction of the main works for the design and build of art'otel London Hoxton for a lump sum of £160 million (exclusive of VAT) (the 'contract sum').

On top of the contract sum, the Group is entitled to novate certain existing contracts relating to the project to Gear at cost subject to a cap of £5.1 million (exclusive of VAT). Gear is required to complete the works to be executed under the building contract by 2024.

Gear's obligations and liabilities under the building contract are supported by a corporate guarantee from Red Sea Hotels Limited, an associate of Euro Plaza Holdings B.V. and therefore a related party of the Company, in the amount of 10% of the contract sum (the 'corporate guarantee'). The corporate guarantee expires on the later of: (i) the expiry of the two-year defects rectification period which follows practical completion of the works; and (ii) the issue of the latent defect insurer's approval or final technical audit report.

As part of entering into the building contract, the Hoxton Project Management Agreement dated 21 June 2018 was terminated.

(ii) Sub-lease of office space - A member of the Group has agreed to sub-lease a small area of office space to members or affiliates of the Red Sea Group at its County Hall corporate office in London. The rent payable by the Red Sea Group to PPHE Hotel Group is based on the cost at which the landlord is leasing such space to PPHE Hotel Group.

(iii) Pre-Construction and Maintenance Contract - The Group frequently uses GC Project Management Limited (GC) to undertake preliminary assessment services, including appraisal work, and provide initial estimates of the construction costs. Further, GC provides ad-hoc maintenance work when required to the Group's various sites. Accordingly, the Group has entered into an agreement with GC for the provision of pre-construction and maintenance services by GC to the Group for a fixed annual retainer of £60,000.

(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.

Summary of the remuneration for Executive and Non-Executive Directors for the year ended 31 December 2021:

	Base salary and fees £'000	Salary sacrifice options £'000	Bonus £'000	Pension contributions £'000	Other benefits £'000	Total £'000
Chairman and Executive Directors	953	47	-	115	16	1,131
Non-Executive Directors	269	-	-	-	-	269
	1,222	47	-	115	16	1,400

Summary of the remuneration for Executive and Non-Executive Directors for the year ended 31 December 2020:

	Base salary and fees £'000	Salary sacrifice options £'000	Bonus £'000	Pension contributions £'000	Other benefits £'000	Total £'000
Chairman and Executive Directors	730	9	75¹	114	16	944
Non-Executive Directors	232	-	-	-	-	232
	962	9	75	114	16	1,176

¹ An Executive Director is entitled to a bonus of £75,000 in respect of 2019 financial year which is subject to leaver provisions. This bonus was not paid in 2020.

Directors' interests in employee share incentive plan

As at 31 December 2021, the Executive Directors held share options to purchase 29,308 ordinary shares (2020: 179,308). 25,000 options were fully exercisable with an exercise price of £14.30 (2020: 16,667) and 4,308 options were fully exercisable with a £nil exercise price (2020: 718). No share options were granted to Non-Executive Directors of the Board.

PRINCIPAL RISKS AND UNCERTAINTIES

Our residual risk level is decided through an assessment of the likelihood of the risk and its impact should it materialise. Our assessments are weighted towards impact to encourage prioritisation of high impact risks. This risk map shows our assessment of each area of principal risk before and after risk mitigation.

The tables below detail our principal risks and uncertainties for the year ahead. These are considered to be the most significant threats to the achievement of our objectives but are not an exhaustive list of all risks identified and monitored through our risk management process, which includes the consolidation of underlying functional and subsidiary risk registers into a single view of risk reported to the Board.

Strategic blocks		Strategic pillars and enablers
1	Core, upper upscale City-Centre Hotels - growth plan and opportunity pipeline	4	Diversification of property portfolio	7	Guest satisfaction - memorable and superior guest experiences
2	Leisure and outdoor hospitality - further expand our offering	5	Flexible and dual leverage focus - flexibility in how we acquire, purchase or develop assets	8	ESG - meaningful ESG impact for the benefit of all stakeholders
3	Hospitality management platform - diversify revenue generation through further opening our expert platform to third parties	6	People and culture - entrepreneurial, people-oriented and creator culture to underpin growth agenda	9	Restaurants and bars - destination-led restaurant and bar experience with ambitious growth plans

Market and MACRO-ECONOMIC environment
Principal risk description	Risk response and actions for 2022	Residual risk
Market dynamics - significant and prolonged decline in global travel and market demand Further waves of COVID-19 with new variants could continue to impact the hospitality sector and hinder our recovery to pre-pandemic levels of revenue and profitability. There is likely to be continued uncertainty in demand with continued trends of late bookings and late cancellations, increasing the challenge to forecast accurately and manage costs effectively. Related strategic blocks, pillars and enablers: 1 2 3 4 9	We have demonstrated our ability to adapt quickly to changing market conditions throughout the COVID-19 pandemic by identifying new opportunities for revenue generation and focusing on delivering the highest standards to our guests. In the year ahead we will continue to monitor closely and anticipate changes in market dynamics to ensure we remain prepared and respond quickly. We will do the following: · Maintain an agile approach to revenue management and marketing tactics, adapting quickly to changes in the market. · Introduce new leisure and domestic focused promotional initiatives and leverage our partnerships for distribution and marketing. · Price test in line with demand and the wider markets. · Continue our close collaboration with Radisson Hotel Group and leverage their reach for promotional campaigns. · Seek opportunities to add new contracted business and consider potential bespoke agreements during times of operational restrictions, e.g. government support, quarantine hotels, NHS contracts, 'bubble' hotels for major events. · Drive consistent brand standards across all of our properties. · Monitor and analyse customer feedback to identify issues quickly and improve operations. · Drive use of our digital and contactless services such as online check-in/check-out, digital key, online food ordering and real-time messaging. · Maintain team member levels to the appropriate scale for the trading environment and flex our costs based on business levels. · Continue to secure SGS accreditation for cleanliness and disinfection, supported with our own programme of brand audits across all hotels.	Very high
Economic climate - adverse macro-economic conditions The macro-economic environment is expected to remain volatile in 2022, with slowing growth, global supply chain issues, labour shortages, energy price increases, other inflationary pressures and potential interest rate rises. A prolonged period of stress for the global economy could contribute to reduced demand and increased costs, impacting our ability to protect our revenue and profitability. Related strategic blocks, pillars and enablers: 3 5 6	Although this external threat remains significant, we have reduced the overall assessment of the risk compared to last year due to several factors including our financial stability and strong cash position, our leaner operating model and our properties holding their value. We have built our resilience to both economic and market forces through the following: · Cash preservation and scenario stress testing. · Profit protection plans (with operational impact assessed). · Budgetary control and frequent forecasting across all regions and property types. · Regular open/closed scenario analysis to support informed decisions during the COVID-19 pandemic. · An adapted business model with more centralised processes to reduce fixed costs where possible. · Benchmarking and verification of market pricing in respect of our supply chain and a policy of sourcing locally where possible. · Process automation and investment in IT to gain efficiencies.	High

FUNDING AND INVESTMENT
Principal risk description	Risk response and actions for 2022	Residual risk
Funding and liquidity - risk of breaching debt covenants, an inability to service existing debt and cash restrictions The ongoing disruption caused by COVID-19 means that funding and liquidity risk will remain a significant risk in the year ahead. The impact of failing to manage this threat proactively would be severe, including an increased risk of cash traps being applied to hotel-specific loans. The cost of debt is likely to be under increasing pressure in the year ahead with economic conditions potentially leading to interest rate rises. Related strategic blocks, pillars and enablers: 5	The risk of breaching debt covenants remains very high due to suppressed revenues caused by the ongoing disruption of COVID-19. By maintaining strong relations with our lenders we have continued to mitigate the threat through securing extended debt covenant waivers. We also strengthened our cash position during the year when we entered into a long-term partnership with Clal Insurance in respect of Park Plaza London Riverbank and art'otel London Hoxton. Our key mitigating actions and controls include the following: · Monthly forward covenant testing with sensitivity and stress modelling. · Agreed debt covenant waiver extensions with lenders to 2023. · Robust treasury monitoring and reporting to the Board. · Proactive and regular liaison with our lenders. · Fixed interest rates for the majority of our loans. Our actions and the controls we implement have contained the funding and liquidity risk, but it will remain a priority while the COVID-19 pandemic continues to impact our performance. The speed at which the hospitality sector can return to more normal trading conditions will determine the longevity of this threat to our business.	Very high
Development project delivery - disruption to projects causing delays or unforeseen cost increases Global supply chain concerns and a challenging labour market driven by both Brexit and the COVID-19 pandemic could result in potential increases in our development project costs or impact the timeline for project delivery. Related strategic blocks, pillars and enablers: 1 2 9	Although this remains an area of risk requiring close attention we have reduced the overall assessment to 'Medium' with good progress made in 2021 and pricing largely fixed for key projects. Our senior leadership team oversees the progress of all key development projects, supported by our in-house Technical Services team, by closely monitoring project timelines and costs, holding regular meetings with our key contractors to identify and tackle any approaching issues which could impact the overall cost, targeted delivery schedule or the expected quality standards.	Medium
TECHNOLOGY AND INFORMATION SECURITY
Principal risk description	Risk response and actions for 2022	Residual risk
Cyber threat - undetected / unrestricted cyber security incidents The Group could be subject to a serious cyber attack resulting in significant disruption to operations and financial loss from falling revenues, cost of recovery and significant fines in the event of a related data breach. Related strategic blocks, pillars and enablers: 3 7	As cyber security incidents such as ransomware attacks continue to be a significant threat, we are focused on strengthening our defences and response mechanisms to provide us with suitable levels of protection. During the year we introduced enhanced security controls, new threat management tools and improved disaster recovery procedures which led to a slight reduction in our overall assessment of this risk. Our mitigating actions include the following: · Implementation of a new threat management solution. · Team member awareness training. · Email protection and end-point protection and detection controls. · Network security systems. · Network Access Control solution. · Virtual Private Network (VPN) connections for securing remote connections to the corporate network. · IT security policies. · Incident response plans. · Third party expert penetration testing. · Phishing security tests. · Identity Access Management tool. · Development of Disaster Recovery procedures and Business Continuity Plans for key applications.	High
Data privacy - risk of data breach The Group could experience a serious data privacy breach which could result in investigation, significant fines in accordance with the GDPR and subsequent reputational damage. Related strategic blocks, pillars and enablers: 3 7	Our mitigating controls reduce the likelihood of a large-scale data privacy breach, and our processes ensure any incidents are dealt with in compliance with the GDPR. Our controls include the following: · Information Security and Data Privacy policies. · Internal awareness communications and training. · Breach protocols, reporting hotlines for team members and incident response plans. · Use of third-party experts for technical support when necessary. · Credit card tokenisation through our payment systems. · Enhanced technology controls - see Cyber threat risk. Process improvements to reduce the threat of data fraud.	High
Technology disruption A prolonged failure in our core technology infrastructure could present a significant threat to the continuation of our business operations, particularly where failures impact hotel management and reservation systems. Related strategic blocks, pillars and enablers: 3 7	The fast-changing digital landscape and rapid roll out of new technologies within our business during 2021 mean that the risk of disruption from technology failures remains an area of focus. Our controls and actions to reduce our risk exposure and build resilience include the following: · Core technology infrastructure hosted by third party secure data centre. · Set-up of back-up and disaster recovery site for core infrastructure. · Disaster Recovery and Business Continuity Plans for key business applications. · Roll out of converged networks across our hotels.	Medium

SAFETY & CONTINUITY
Principal risk description	Risk response and actions for 2022	Residual risk
Operational disruption We have experienced significant operational disruption during the COVID-19 pandemic. Other global events such as conflict or environmental disasters could also cause significant disruption. We could also experience more localised disruption to our operations from incidents at our hotels or in the immediate vicinity, for example floods, extreme weather, social unrest, conflict, terrorism. Related strategic blocks, pillars and enablers: 3 7 9	The volatile nature of the COVID-19 pandemic continues to disrupt operations with increased team member absence, supply chain pressures and government restrictions changing frequently across our regions. Our overall assessment of the risk sees a slight reduction from our most severe categorisation as we have demonstrated an ability to adapt our business operations in response to new challenges, and our properties have continued to operate effectively through the more recent waves of the pandemic. We continue to manage this threat with the following measures: · Hotel crisis plans and crisis communications. · Hotel lockdown procedures. · Business Continuity Plans. · Cost control measures to reduce impact of closures and reduced capacity. · Adapted services to continue operations where possible. · Remote working capabilities for corporate and regional teams, including Central Reservations and Customer Support. · Close monitoring of key supplier stability and regular communications regarding anticipated demand levels. · Contingency in place for critical supplies.	High
Serious health, safety and security incidents The Group could experience significant health and safety, food safety or physical security incidents. A failure to take reasonable steps to prevent such incidents, or a failure to respond appropriately, could impact our reputation, disrupt our operations and result in significant loss of guest, team member and stakeholder confidence. Related strategic blocks, pillars and enablers: 3 6 7 9	How we mitigate and respond to this risk We do not accept any actions which would increase our risk profile in respect of health, safety and security. With the COVID-19 pandemic ongoing we continue to focus on delivering our enhanced health and safety programmes to provide a safe stay for our guests and a safe working environment for our team members. We actively mitigate and respond to this area of risk through the following: · Regular risk assessments. · Security and fire safety procedures. · Health and safety audit programmes including regular COVID-19 related audits and SGS accreditation for cleanliness and disinfection. · In-house and supplier food safety audit programme. · Team member training programmes. · Incident reporting. · Hotel crisis plans. · 'Reassuring Moments' and 'be bold, be creative, be safe' programmes. · COVID-19 incident protocol and centralised tracking of identified cases. · Mental health and well-being training. · Centralised system for incident reporting. Proactive gathering of intelligence and advice on potential security risks through regular liaison with local police and security services.	Medium

PEOPLE

Principal risk description

Risk response and actions for 2022

Residual risk

Talent attraction, engagement and retention - challenge of maintaining an engaged and suitably skilled workforce

Difficulty in attracting, engaging and retaining team members is a significant matter within the hospitality sector, driven by the impact of both COVID-19 and the reduced availability of labour brought about by Brexit.

Tough labour market conditions could drive up costs and potentially disrupt our operational effectiveness.

Related strategic blocks, pillars and enablers:

3 6 7 9

A challenging labour market is expected to persist in 2022 and will remain an important area of focus. Our proactive approach to mitigate this area of risk includes the following:

· Boosting our in-house recruitment team.

· Set-up of a new dedicated Hospitality Career Centre (recruitment office) in London.

· Employer brand and talent attraction strategy.

· Optimising and simplifying the candidate experience.

· Social media strategy to increase presence and labour market penetration.

· Exploring opportunities to attract skilled workers from international labour markets.

· Multi-skilling existing team members to improve the flexibility of our workforce.

· Building a central bank of casual workers available to work across London and Amsterdam properties.

· Provision of guaranteed hours for certain roles.

· Employee engagement initiatives and retention strategy.

· Pulse employee surveys to measure engagement and identify and address any areas of concern.

· Increased recognition activity.

· Talent reviews.

· Learning and development strategy with enhanced online learning content.

· Mental health and emotional well-being initiatives.

· New onboarding experience.

High

ENVIRONMENTAL, SOCIAL AND GOVERNANCE

Principal risk description

Risk response and actions for 2022

Residual risk

ESG stakeholder perception - negative perception of the Group with regard to ESG matters

Corporate governance and matters of environmental and social responsibility are of significant importance to our stakeholders. Investors and customers prepare detailed information requests on ESG activities, metrics, targets and performance. We are expected to have detailed knowledge of the ESG performance of our supply chain. Customers and employees cite ESG reputation as a driver of behaviour.

A perception that the Group does not apply best practice corporate governance principles, does not suitably mitigate both the physical and transitional risks of climate change, or does not act responsibly to protect the environment and the communities we operate in, could impact our performance by damaging our appeal to customers, investors and other business partners. It could also affect our ability to retain and attract talent.

Related strategic blocks, pillars and enablers:

3 6 7 9

To strengthen our approach to ESG matters and respond to increasing investor focus we have established an ESG Committee to develop, monitor and re-evaluate policies on ESG matters.

Our ongoing mitigating activity include the following:

· Responsible Business Programme (aligned to Radisson Hotel Group).

· Participation in the Radisson Responsible Business Survey.

· Externally certified performance against recognised standards, e.g. Green Key.

· Climate related risk scenario analysis and reporting (TCFD).

· Initiatives to reduce energy consumption in our properties.

· Active engagement with investors by CEO, Chair and Senior Independent Director.

· Documentation of Governance practices and procedures to ensure compliance with Corporate Governance Code (2018) requirements, or satisfactory explanation thereof.

· Deputy Chairman acting as a dedicated workforce representative.

· Active monitoring of gender pay gap.

Medium

DIRECTORS' RESPONSIBILITY STATEMENT

Each of the directors named on pages 94 and 95 of the Annual Report & Accounts 2021 as of the time of the publication, confirms to the best of his or her knowledge that:

(i) 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;

(ii) 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.

(iii) The Directors consider that the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

Signed on behalf of the Board by

Boris Ivesha

President & Chief Executive Officer

Daniel Kos

Chief Financial Officer & Executive Director

28 February 2022

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RNS Number : 1148D

PPHE Hotel Group Limited

01 March 2022

1 March 2022

PPHE HOTEL GROUP LIMITED
("PPHE Hotel Group", the "Group" or the "Company")

Audited Annual Results for the financial year ended 31 December 2021
Publication of Annual Report & Accounts and Notice of Annual General Meeting

Well positioned for long-term growth, underpinned by attractive pipeline, strong customer demand and operational progress

Boris Ivesha, President and Chief Executive Officer PPHE Hotel Group said:

Financial summary

•	Total revenue increased by 38.9% to £141.4 million (2020: £101.8 million), representing a recovery to 39.5% of 2019 levels, achieved in spite of multiple periods of restriction across our operating markets. In Croatia, the third quarter revenue was approximately 93% of the revenue generated during the same period in 2019.
•	Recovery across all key operating metrics, with RevPAR up 22.1% year-on-year to £35.9 (2020: £29.4), average room rate up 11.4% to £117.0 (2020: £105.1) to represent 91.1% of 2019 levels. Occupancy improved to 30.7% (2020: 28.0%).
•	Reported EBITDA increased to £25.1 million (2020: loss of £10.1m) of which £39.1 million was generated in H2 2021, including a one-off benefit in the form of government subsidies.
•	Normalised profit before tax improved to £(47.5) million (2020: £(89.8) million).
•	The Group's financial position is strong, with a total consolidated cash balance of £136.8 million at 31 December 2021 (2020: £114.2 million) and access to available facilities of £76.8 million.
•	EPRA NRV per share remained flat at £22.15 (2020: £22.08).
•	Adjusted EPRA earnings per share improved to a loss of (44) pence (2020: (123) pence).
•	The Board is not proposing a dividend in respect of the financial year ended 31 December 2021. However, the Board appreciates the importance of dividends and will continue to review any future dividend payments in line with the recovery trajectory and the business returning to cash flow positive trading.

Operational and corporate highlights

•	The Group's proactive commercial strategy drove revenue generation during periods of low demand, with properties operating as UK government quarantine hotels for part of the year and Park Plaza Westminster Bridge London chosen as the exclusive host hotel for the 2021 Wimbledon Championships.
•	Strategic expansion into the important Austrian and Italian markets through the acquisition of a 144-room hotel in Nassfeld, Austria and a 101-room property in the centre of Rome, Italy.
•	Continued progress against £200m+ repositioning and development pipeline, providing a strong foundation for long-term sustainable growth. Highlights include:
	ͦ	The construction of the new art'otel London Hoxton, expected to complete by 2024 continued to plan with structural works completed up to the 17^th floor (out of 27);
	ͦ	The two-year redevelopment of Grand Hotel Brioni in Pula, Croatia, is in its final stages and expected to relaunch for the 2022 summer season;
	ͦ	Work began on the conversion of the Group's property in the centre of Zagreb, its first in the capital city, to a luxury 115-room art'otel which is expected to open H1 2023;
	ͦ	art'otel London Battersea Power Station, which will be operated by the Group under a management agreement, is set to open in the second half of 2022.
•	Long-term partnership with Clal announced this year, underpinning the Group's NRV, has unlocked £113.7m of equity to give the Group further financial headroom to support recovery and capitalise on growth opportunities.

Post-Period end

•

Key financial statistics

	Reported in GBP (£)
	Year ended 31 December 2021	Year ended 31 December 2020
Total revenue	£141.4 million	£101.8 million
EBITDAR	£27.6 million	£ (9.1) million
EBITDA	£25.1 million	£ (10.1) million
EBITDA margin	17.7%	(9.9)%
Reported PBT	£(57.6) million	£(94.7) million
Normalised PBT	£(47.5) million	£(89.8) million
Reported EPS	(123)p	(192)p
Occupancy	30.7%	28.0%
Average room rate	£117.0	£105.1
RevPAR	£35.9	£29.4
Room revenue	£84.4 million	£63.6 million
EPRA NRV per share	22.15	22.08
Adjusted EPRA earnings per share	(44)p	(123)p

Publication of Annual Report & Accounts and Notice of Annual General Meeting

The Company's Annual General Meeting will be held on 17 May 2022 at 12 noon at 1^st Floor, Elizabeth House, Les Ruettes Brayes, St Peter Port, Guernsey GY1 1EW.

Enquiries:

PPHE Hotel Group Limited
Daniel Kos, Chief Financial Officer & Executive Director
Robert Henke Executive Vice President of Commercial Affairs	Tel: +31 (0)20 717 8600
Hudson Sandler
Lucy Wollam/Charlotte Cobb/Nick Moore	Tel: +44 (0)20 7796 4133 Email: [email protected]

Notes to Editors

Company websites

www.pphe.com
www.arenahospitalitygroup.com

For reservations

www.parkplaza.com

www.artotel.com

www.arenahotels.com

www.arenacampsites.com

CHAIRMAN'S STATEMENT

Adapting to new challenges

Delivering for all stakeholders

Dividend

Looking ahead

Eli Papouchado
Chairman

PRESIDENT AND CEO'S REVIEW

Regaining momentum

2021 in review

Full details on the Group's operational performance by region are set out in the Business Review below.

Improved financial performance

The Group's financial position remains strong, with a total consolidated cash balance of £136.8 million at 31 December 2021 (31 December 2020: £114.2 million).

Delivering strategic progress

Development pipeline update

art'otel London Battersea Power Station, which is to be operated by the Group under a long-term management agreement, is expected to open during the second half of 2022.

As previously announced, we took the decision in 2020 to pause and reassess our development project in New York City.

New hotel acquisitions

In Q4, we announced two strategic acquisitions which have strengthened our pipeline, expanded our presence in Europe and marked our entry into two new and exciting markets: Austria and Italy.

Further details about our development pipeline projects and acquisitions are outlined in the Business Review below.

Our partnership with Radisson Hotel Group

Employer of choice

'Best Employer in Hospitality' and other industry recognition

Committed to creating a memorable guest experience

Our team members

On behalf of the Board, I would like to thank all our team members for their commitment, professionalism and hard work throughout the year.

Strategy update

Looking ahead

Boris Ivesha
President & Chief Executive Officer

FINANCIAL REVIEW

Pipeline growth and a solid financial position

Financial Results

Key financial statistics for the financial year ended 31 December 2021.

	Year ended 31 December 2021	Year ended 31 December 2020
Total revenue	£141.4 million	£101.8 million
Room revenue	£84.4 million	£63.6 million
EBITDAR	£27.6 million	£(9.1) million
EBITDA	£25.1 million	£(10.1) million
EBITDA margin	17.7%	(9.9)%
Reported PBT	£(57.6) million	£(94.7) million
Normalised PBT	£(47.5) million	£(89.8) million
Reported EPS	(123)p	(192)p
Occupancy	30.7%	28.0%
Average room rate	£117.0	£105.1
RevPAR	£35.9	£29.4
EPRA NRV per share	£22.15	£22.08
Adjusted EPRA earnings per share	(44)p	(123)p

Overview of 2021

Operational performance

Revenue

Reported total revenue for the financial year increased by 38.9% to £141.4 million (2020: £101.8 million). Revenue recovered to 39.5% of 2019 levels (2019: £357.7 million).

EBITDA, profit and earnings per share

The Group's Reported EBITDA is £25.1 million (2020: £(10.1) million), of which £(14.0) million relates to the first six months of 2021 and £39.1 million to the last six months of 2021.

In £ millions	12 months ended 31 December 2021	12 months ended 31 December 2020
Reported (loss) profit before tax	(57.6)	(94.7)
Net insurance proceeds received in relation to one of the Group's UK hotels	-	(10.0)
Execution of the sale and purchase agreement with the Republic of Croatia related to Guest House Riviera Pula	-	1.5
Loss on buy back of units in Park Plaza Westminster Bridge London from private investors	0.5	-
Fair value adjustment on income swaps with private investors of Income Units in Park Plaza Westminster Bridge London	-	0.3
Settlement of legal claim	3.1	-
Results from marketable securities	-	(0.1)
Revaluation of finance lease	3.6	3.4
Revaluation of Park Plaza County Hall London Income Units	(0.6)	2.4
Preopening expenses	0.3	0.6
Capital (profit) loss on disposal of fixed assets	(1.0)	1.5
Impairment of property, plant and equipment and right-of-use assets	4.4	5.3
Business combination acquisition costs	1.0	-
Loan prepayment break costs	0.5	-
Revaluation of share appreciation rights	(1.7)	-
Normalised (loss) profit before tax	(47.5)	(89.8)

Reported basic/diluted earnings per share for the period were (123) pence (2020: (192) pence).

CAPEX, acquisitions and pipeline update

Real estate performance valuations

Summary of EPRA performance indicators

	Year ended 31 December 2021		Year ended 31 December 2020
	£ million	Per Share	£ million	Per Share
EPRA NRV (Net Reinstatement Value)	951.2	£22.15	960.8	£22.08
EPRA NTA (Net Tangible Assets)	919.7	£21.42	924.4	£21.24
EPRA NDV (Net Disposal Value)	857.5	£19.97	830.5	£19.08
EPRA earnings	(17.5)	(41)p	(40.6)	(96)p
Adjusted EPRA earnings	(18.8)	(44)p	(52.1)	(123)p

	31 December 2021 £ million
	EPRA NRV (Net Reinstatement Value)	EPRA NTA⁴ (Net Tangible Assets)	EPRA NDV (Net Disposal Value)
NAV per the financial statements	278.5	278.5	278.5
Effect of exercise of options	6.2	6.2	6.2
Diluted NAV, after the exercise of options¹	284.7	284.7	284.7
Includes:
Revaluation of owned properties in operation (net of non-controlling interest)²	636.1	636.1	636.1
Revaluation of the JV interest held in two German properties (net of non-controlling interest)	3.4	3.4	3.4
Fair value of fixed interest rate debt	-	-	(53.7)
Deferred tax on revaluation of properties	-	-	(13.0)
Real estate transfer tax³	17.2	-	-
Excludes:
Fair value of financial instruments	(0.4)	(0.4)	-
Deferred tax	(9.4)	(9.4)	-
Intangibles as per the IFRS balance sheet	-	14.3	-
NRV/NTA/NDV	951.2	919.7	857.5
Fully diluted number of shares (in thousands)¹	42,935	42,935	42,935
NRV/NTA/NDV per share (in £)	22.15	21.42	19.97

1 The fully diluted number of shares excludes treasury shares but includes 585,867 outstanding dilutive options (as at 31 December 2020: 1,196,996).

2 The fair values of the properties were determined on the basis of independent external valuations prepared in December 2021. The properties under development are measured at cost.

3 EPRA NTA and EPRA NDV reflect fair value net of transfer costs. Transfer costs are added back when calculating EPRA NRV.

4 NTA is calculated under the assumption that the Group does not intend to sell any of its properties in the long run.

	31 December 2020 £ million
	EPRA NRV (Net Reinstatement Value)	EPRA NTA⁴ (Net Tangible Assets)	EPRA NDV (Net Disposal Value)
NAV per the financial statements	309.6	309.6	309.6
Effect of exercise of options	13.2	13.2	13.2
Diluted NAV, after the exercise of options¹	322.8	322.8	322.8
Includes:
Revaluation of owned properties in operation (net of non-controlling interest)²	602.1	602.1	602.1
Revaluation of the JV interest held in two German properties (net of non-controlling interest)	3.2	3.2	3.2
Fair value of fixed interest rate debt	-	-	(84.5)
Deferred tax on revaluation of properties	-	-	(13.1)
Real estate transfer tax³	18.6	-	-
Excludes:
Fair value of financial instruments	(0.7)	(0.7)	-
Deferred tax	(13.4)	(13.4)	-
Intangibles as per the IFRS balance sheet	-	17.8	-
NRV/NTA/NDV	960.8	924.4	830.5
Fully diluted number of shares (in thousands)¹	43,521	43,521	43,521
NRV/NTA/NDV per share (in £)	22.08	21.24	19.08

1 The fully diluted number of shares excludes treasury shares but includes 1,196,996 outstanding dilutive options (as at 31 December 2019: 412,290).

2 The fair values of the properties were determined on the basis of independent external valuations prepared in December 2020. The properties under development are measured at cost.

3 EPRA NTA and EPRA NDV reflect fair value net of transfer costs. Transfer costs are added back when calculating EPRA NRV.

4 NTA is calculated under the assumption that the Group does not intend to sell any of its properties in the long run.

Below is a summary of the valuation basis of our assets as at 31 December 2021. The property market value, the discount rate and the cap rate have been taken from the independent valuer's report.

Region	Properties	Property market value £million	Discount rate	Cap rate
United Kingdom
London	6	901.9	7.5% - 9.0%	5.0% - 6.5%
Provinces	2	29.9	9.8% - 10.0%	7.3% - 7.5%
The Netherlands
Amsterdam	4	238.5	8.0% - 9.8%	5.5% - 7.3%
Provinces	2	35.9	9.8% - 9.8%	7.3% - 7.3%
Germany	3	87.2	8.5% - 9.3%	6.0% - 6.8%
Croatia
Hotels and apartments	10	139.7	9.0% - 10.0%	7.0% - 8.0%
Campsites	8	113.4	9.0% - 11.0%	7.0% - 9.0%
Others	3	50.4	6.3% - 9.5%	5.0% - 9.0%

Cash flow and EPRA earnings

	£ million
Group's quarterly cash flow for 2021	Q1	Q2	Q3	Q4	Total
Operational cash flow (EBITDA and working capital)	(8.2)	3.0	31.7	(0.8)	25.7
Investment in properties and new acquisitions	(10.6)	(17.5)	(16.2)	(57.5)	(101.8)
Debt service³	(9.1)	(11.5)	(11.5)	(18.0)	(50.1)
New facilities and movement in restricted cash	16.4	18.3	8.1	28.1	70.9
Loan repayments	-	(40.4)	-	-	(40.4)
Joint venture transaction²	-	125.8	-	-	125.8
Other exceptional items (including FX)	(2.8)	0.3	(4.5)	(0.5)	(7.5)
Total cash movement	(14.3)	78.0	7.6	(48.7)	22.6

Cash and cash equivalents at beginning of period	114.2	99.9	177.9	185.5	114.2
Cash and cash equivalents at end of period	99.9	177.9	185.5	136.8	136.8

Undrawn facilities at end of period¹	69.0	60.0	77.2	76.8	76.8

3 Including leases, unit holders in Park Plaza Westminster Bridge London.

Reconciliation of reported earning to adjusted EPRA earnings	12 months ended 31 December 2021 £ million	12 months ended 31 December 2020 £ million
Earnings attributed to equity holders of the parent company	(52.1)	(81.7)
Depreciation and amortisation expenses	43.3	46.6
Revaluation of Park Plaza County Hall London Income Units	(0.6)	2.4
Changes in fair value of financial instruments	(1.7)	0.2
Non-controlling interests in respect of the above³	(6.4)	(8.1)
EPRA earnings	(17.5)	(40.6)
Weighted average number of shares (LTM)	42,539,340	42,466,006
EPRA earnings per share (in pence)	(41)	(96)
Company-specific adjustments:¹
Capital loss on buy-back of Income Units in Park Plaza Westminster Bridge London	0.5	-
Remeasurement of lease liability⁴	3.6	3.4
Other non-recurring expenses (including preopening expenses)⁹	(0.7)	2.0
Loan early repayment break costs¹³ (see note 15b)	0.5	-
Business combination acquisition costs¹²	1.0	-
Government settlement purchase of Hotel Riviera⁷	-	1.5
Settlement of legal claim⁶	3.1	-
Adjustment of lease payments⁵	(2.3)	(2.6)
Insurance settlement¹⁰	-	(10.0)
One off tax adjustments⁸	(3.6)	(1.8)
Maintenance CAPEX²	(5.7)	(4.0)
Non-controlling interests in respect of the above³	2.3	-
Company adjusted EPRA earnings¹	(18.8)	(52.1)
Company adjusted EPRA earnings per share (in pence)	(44)	(123)
Reconciliation company adjusted EPRA earnings to normalised profit before tax
Company adjusted EPRA earnings	(18.8)	(52.1)
Reported depreciation¹¹	(38.9)	(41.3)
Non-controlling interest in respect of reported depreciation	6.3	8.1
Maintenance CAPEX²	5.7	4.0
Non-controlling interest on maintenance CAPEX and the company-specific adjustments	(2.3)	-
Adjustment of lease payments⁵	2.3	2.6
One off tax adjustments⁸	3.6	1.8
(Loss)/profit attributable to non-controlling interest	(0.4)	(12.2)
Reported tax	(5.0)	(0.7)
Normalised (loss)/profit before tax	(47.5)	(89.8)