PPHE well-positioned for recovery following continued strategic progress and decisive actions

02 March 2021

PPHE Hotel Group, the international hospitality real estate group which develops, owns and operates hotels and resorts, today announces its audited annual results for the financial year ended 31 December 2020.

Boris Ivesha, President & Chief Executive Officer, PPHE Hotel Group said: "Despite the challenges presented over the past 12 months, our well-invested portfolio, agile owner-operator model and strong 30-year track record together provide a solid foundation for success, and we remain excited about the long-term future of the business.

After the UK government's recovery roadmap announcement last week, we have seen an encouraging early uplift in customer demand. We are optimistic that this positive trend will continue, supported by a calendar of cultural and sport events taking place in the UK during the second half of the year.

During the period we were pleased to progress a number of development projects and complete several new acquisitions in line with our long-term growth strategy, in addition to navigating the impact of the pandemic.

I am confident that our high-quality portfolio and strong pipeline, together with our unique owner operator approach and the operational initiatives implemented during 2020 positions the Company very well to benefit from the anticipated uplift in domestic and international demand as the global vaccine rollout continues and restrictions ease."

Operational initiatives and strategic progress
• The Board and Executive Leadership Team reacted quickly to manage the impact of the COVID-19 pandemic, prioritising the safety and wellbeing of colleagues and guests by implementing externally accredited health and safety protocols and harnessing technology to ensure a seamless guest experience when hotels were open

• Decisive actions were taken to protect the Group by preserving cash by reducing costs, temporarily closing properties where appropriate and utilising available government support initiatives, including job retention schemes

• The Group made good strategic progress, well-positioning it for the future and to benefit from the recovery as lockdown restrictions ease. Highlights include:
? Completion of committed property investment projects in Croatia (Arena Grand Kažela Medulin campsite and Arena Verudela Beach Apartments in Pula)
? Continued construction of the 343-key art'otel london hoxton, for which the Group secured a £180 million loan in April 2020
? Acquisition of properties in Pula (Croatia) and Belgrade (Serbia) and a 45-year lease agreement in Zagreb (Croatia), extended the Group's presence in Central and Eastern Europe
? Obtained planning permission for the development of a 465-key hotel in London, on the site adjacent to Park Plaza London Park Royal.

• In line with its commitment to positively impact its communities, the Group was proud to provide accommodation to key workers, offer events spaces to local organisations, and donate much-needed services and items to those in the communities across its countries of locations.

Well-positioned for recovery
• Vaccine rollouts continue across all the Group's countries of operation, laying the foundation for the easing of government-imposed restrictions.

• The Group's properties are excellently positioned to benefit from a phased recovery, with the anticipated return of domestic then international leisure demand during 2021.

• Most of the Group's hotels are located in desirable city hubs, additionally the portfolio has benefited from completion of an extensive £100+ million multi-year investment and repositioning programme in 2019.

• Strong active £200+ million pipeline of attractive projects to enhance long-term growth.

• The Group has development and operational expertise and a 30-year track record of successfully managing through economic cycles, underpinned by a well-invested property portfolio, operational agility and experienced leadership team.

Financial Performance
Key financial statistics for the financial year ended 31 December 2020
The Group's financial performance was severely impacted by the COVID-19 pandemic and the resulting restrictions on both domestic and international travel across its markets.

• Despite restrictions and hotel closures throughout the majority of the period, the Group delivered room revenues of £63.6m. Reported RevPAR was £29.4, with occupancy of 28.0% (2019: 80.6%) and decreased average room rate of £105.1 (2019: £128.5).

• EPRA NRV per share remained resilient at £22.08, reflecting the Group's well-invested, centrally located properties.

• The Group ended the year with a strong cash position, with £197.6m cash available as at 31 December 2020 (30 September 2020: £195.4m). This comprises cash of £114.2m at 31 December 2020 (30 September 2020: £132.4m), and access to undrawn facilities of £83.4m (30 September 2020: £63.0m).