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PPHE unearths further hidden value in property portfolio
Gain to date: 3.4%
Original entry point:
Buy at £14.10, 28 June 2018
Investors may still be undervaluing hotel developer PPHE Hotel (PPH) after Savills reported a £639m increase in the group’s property value compared to book value.
PPHE operates the Park Plaza hotel chain in Europe via an exclusive licence from hotel group Radisson. It also owns the art’otel brand and has a 52% stake in Croatia-based Arena Hospitality.
The company has set its sights on a premium listing on the London Stock Exchange which should see it qualify for the FTSE 250 index in the near future, thus forcing tracker funds to buy the stock. The listing transfer should happen on 30 July.
FinnCap analyst Guy Hewett has lifted his target price by 6.5% to £20.63, arguing the biggest hikes in the latest valuation appraisal emerged from PPHE’s Hoxton development, which was previously included at cost, and properties in Amsterdam. Currently its most valuable European hotel is the Park Plaza Victoria Amsterdam at €167m.
The analyst is confident about PPHE’s future as it has £240m in unrestricted cash, offering significant firepower to finance growth.