The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
19 March 2020
PPHE HOTEL GROUP LIMITED
("PPHE" or "the Group")
Covid-19 Update
PPHE Hotel Group, the international hospitality real estate group which develops, owns and operates hotels and resorts, today announces exceptional measures to mitigate the effect on its business of the Covid-19 pandemic.
Since the Group's business update on 11 March 2020, in which it reported reduced demand for international travel resulting in an increase in cancellations and a slowdown in bookings, governments in several countries have announced further extraordinary measures to slow the spread of the virus. These include the adoption of social distancing policies, bans on large gatherings and events, the closure of restaurants and bars and lockdowns. These measures have led to an immediate and significant deterioration in the hospitality market, with a high number of cancellations and no shows and very few new bookings.
The Group's financial and liquidity position is robust. As at 17 March 2020, the Group maintained excess cash and unutilised credit facilities substantially in line with the amounts previously disclosed in its 2019 financial statements. The financial covenants in the Group's bank facilities are principally based on loan to value and debt service coverage ratios with cure periods applicable for each facility. We have a long-standing and supportive group of banks with whom we are working very closely to ensure that we are able to take all the necessary actions that are in the best interests of the Group in the current environment. The Group therefore believes, based on the measures detailed below, that it is well-positioned to withstand a significant decrease in business activity in its markets during 2020.
The Group is in the process of adopting a set of exceptional operational measures in order to significantly reduce its costs and help it navigate through these challenging and unprecedented times. These measures include reduced capacity of hotels in Germany and Hungary; the temporary closure of two hotels in Amsterdam and reduced capacity in the rest of the region; the potential temporary closure of approximately 2,000 rooms in London; steps to reduce payroll including reduced hours, potential reductions in FTEs and the deferral of all 2019 staff incentive payments; and a review into the timing and phasing of the Group's investment programme until markets improve.
We are pleased with the financial commitments we have seen so far from governments in the regions in which we operate which are expected to subsidise a significant portion of our costs during this period, and their vocal support for protecting the hospitality industry during this period.
Furthermore, the Company's Board of Directors have today decided to withdraw its proposal for a final dividend of 20 pence per share in respect of 2019 at the Company's forthcoming AGM, in order to further enhance the Company's financial flexibility.
At this stage, given the level of continued uncertainty around business activity and how government response may evolve, it is not possible to provide financial guidance for the FY20 financial year.
Boris Ivesha, President & Chief Executive Officer, PPHE said:
"These are unprecedented and highly uncertain times for all and the safety of our guests and team members is our number one priority. As we navigate through these challenging times, we are working closely with all stakeholders, from governments to local communities, from partners and suppliers to team members and our investor base. Our Group has a strong track record spanning 30 years and our well-maintained property portfolio includes iconic flagship hotels in resilient cities such as Amsterdam and London. Our future pipeline is strong and supported by a strong balance sheet, and we remain confident about the long term appeal and value of the hospitality and travel sector. Our leadership team has managed through several economic cycles and we remain confident that the range of operational and financial measures announced today will help the Company weather a significant period of dislocation."
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 |
|
Wendy Baker / Lucy Wollam |
Tel: +44 (0)20 7796 4133 Email: [email protected] |
Notes to Editors
PPHE Hotel Group is an international hospitality real estate company, with a £1.7 billion portfolio, valued as at summer of 2019 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 primary focus is 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.
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 and a constituent of the FTSE 250. 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.artotels.com
www.arenahotels.com
www.arenacampsites.com
