I have written previously on PPHE so apologies if some of what is here has appeared before.
The first thing to realise with PPHE is that it is almost 2 companies. A hotel/resort company that like all hotel/resorts rents rooms and facilities, provides food etc, and a property company that buys, builds and refurbishes hotels.
As such there is a regular trading business (room and related), often referred to as an OpCo (Operating Company) and a much lumpier Property Development Business, PropCo (Property Company). This OpCo/Propco model is reasonably common worldwide and in many cases exists in related but separately listed forms. Rumours of a possible split and dual listing have been around since before I bought into PPHE.
I am not in it for the split as management to my mind run both businesses well and over time, (reasonably given the lumpy nature of the PropCo) have shared the rewards of success.
Current OpCo revenue is 23% ahead of last year. Whilst a significant element (admitted but not quantified) of this is fx related it still suggests a good performance. LvL revenue is up 13% so an amount of the growth is from new developments. It should be noted that the trading update is for revenue only. PPHE has previously noted difficulties in recruiting staff, I believe in London alone they are short 100 chambermaids. This must over time cause costs to rise.
With regard to the PropCo part of the deal (and I freely admit that this is my split, not probably as management see it), there are 3 renovations underway, 2 about to commence and plans to add 2 new hotels with an additional 500 rooms by 2019. (The company currently has 9000 rooms). Historically the renovations and new developments have been significantly value enhancing.
The only downside in the RNS was, as previously noted, the CFO Chen Moravasky is standing down to persue other opportunities. He is staying on as a NED. I will be looking to see what he is going to do and would be particularly pleased if in fact he is only moving within roles in the Red Sea Group who effectively control PPHE.
PPHE remains one of my largest holdings and has over time paid out significant dividends. I see no reason to adjust my holding down and may increase it marginally (It was at my purchase value limit but this has now been raised).