PARTNER BRANDS
Unlocking Growth
ANNUAL REPORT AND ACCOUNTS 2024
GOVERNANCE
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Year in review
A year to be proud
New openings and brand diversification
As we entered the final stages of our £300+ million capital expenditure (CAPEX)
programme, we opened several new properties under a variety of brands, driving
our multi-brand development and diversification strategy.
ESG strategic progress
We made advancements on our SBTi
submission by starting the work on our
decarbonisation plan and reduced our
plastic consumption through the
introduction of large amenities dispensers.
We obtained new environmental building
certifications and awards, such as
BREEAM Excellent for art’otel London
Hoxton and the 2024 Green Building and
Sustainable Built Environment Award in
Croatia for art’otel Zagreb.
Post balance sheet events
On 9 January 2025, Ken Bradley was
appointed as Non-Executive Chairman and
Roni Hirsch as Non-Executive Director.
See more on pages 15 and 16
art’otel London Hoxton
(United Kingdom)
April 2024 saw the soft opening of this
iconic new landmark hotel, located
in Hoxton. 2025 will see the launch
of the 5,000m2 office space and
the 25th floor restaurant.
art’otel Rome Piazza Sallustio
(Italy)
On track to open in March 2025,
this completely repositioned
property is set to join Rome’s
buzzing luxury hotel market.
art’otel Zagreb
(Croatia)
In May, we launched the rooftop bar at
the Croatian capital’s most premium
hotel, marking the completion of our
office-to-hotel conversion project.
Radisson RED Belgrade
(Serbia)
Our first Radisson RED branded
property opened in the Serbian
capital in February following an
extensive repositioning programme.
Radisson RED Berlin Kudamm
(Germany)
Our first Radisson RED property
in Germany fully opened
in September following an
extensive repositioning programme.
Financial performance
and growth
Operational
achievements
Total revenue
£442.8m
2023: £414.6m
EBITDA*
£136.5m
2023: £128.2m
Occupancy
74.5%
2023: 72.4%
EPRA earnings*
£53.2m
2023: £50.1m
Adjusted EPRA EPS*
125p
2023: 118p
Average room rate*
£161.5
2023: £166.8
Reported PBT
£30.6m
2023: £28.8m
Reported basic EPS
67p
2023: 53p
RevPAR*
£120.3
2023: £120.7
EPRA NRV per share*
£27.51
2023: £26.72
Dividend1
38p
2023: 36p
Employee
engagement rate
84.5%
2023: 83.0%
1 Includes the interim dividend and the proposed final dividend over the year.
See more on pages 4 and 5
This annual report includes various Alternative Performance Measures (APMs), such
as EPRA performance metrics and hospitality operational performance indicators.
For definitions, further details, and reconciliations to measures defined under
International Financial Reporting Standards (IFRS), please refer to the Appendix:
Alternative Performance Measures on pages 218 and 219 of the report. The metrics
presented remain consistent with those in our previous annual report, with no changes
to the bases of calculation. All APMs have been separately flagged throughout the report
with the use of an asterix*.
PPHE Hotel Group
Annual Report and Accounts 2024
1
Strategic Report
Corporate Governance
Financial Statements
Appendices
Strategic Report
4
About us
6
At a glance
9
Our investment case
10
Attractive brands
14
Chairman’s Statement
18
CEO Review
26
Business model
28
Strategy at a glance
30
Strategy in action
38
Key performance indicators
40
Financial Review
48
Business Review
64
Stakeholder engagement
68
Environmental, Social and Governance
84
TCFD report
90
Risk management
100
Viability statement
Corporate Governance
101
Introduction to governance
104
Board of Directors
106
Executive Leadership Team
108
Corporate governance
119
Nomination Committee report
126
Audit Committee report
133
ESG Committee report
135
Remuneration Committee report
152
Directors’ report
Financial Statements
157
Independent auditors’ report
160
Consolidated statement of financial position
161
Consolidated income statement
162
Consolidated statement of
comprehensive income
163
Consolidated statement of changes in equity
164
Consolidated statement of cash flows
166
Notes to consolidated financial statements
Appendices
210
Subsidiaries included in the Group
214
Jointly controlled entities
214
Current renovation, repositioning and
pipeline projects
215
Glossary
218
Alternative Performance Measures
220
Contacts
Unlocking Growth
art’otel London Hoxton
Radisson RED Belgrade reception
6
At a glance
We are an integrated hospitality real
estate Group, with a £2.2 billion
portfolio of primarily prime freehold
and long-leasehold assets in Europe.
See more on pages 6 to 13
9
Our investment case
Our “Buy, Build, Operate” business model
provides exposure and returns across the
entire hospitality real estate value chain.
18
CEO Review
We delivered a record performance and
launched exciting properties in Belgrade,
Zagreb, Berlin and London, with Rome
opening in March 2025.
See more on pages 18 to 25
30
Strategy in action
Following a period of investment, we have
unlocked value by launching and now
operating several new properties.
As a result we create asset value
and ensure steady revenue flows.
See more on pages 30 to 37
64
Stakeholder engagement
We fully engaged throughout the year with
all our stakeholder groups, including
guests, team members, investors,
suppliers and affiliates.
See more on pages 64 to 67
68
ESG report
In 2024, we have made important
advancements on our ESG strategy,
improving the sustainability profile of
our properties and their social impact.
See more on pages 68 to 83
Contents
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
2
3
Strategic Report
Corporate Governance
Financial Statements
Appendices
PPHE Hotel Group’s unique and integrated model of owning, developing and operating hospitality properties
has delivered strong shareholder returns since our inception in 1989. Our track record spans from successful
ground-up property developments, to office to hotel conversions and repositioning existing properties into
premium upper upscale assets.
2024 was a spectacular year for us when it came to new developments and future value creation,
with our £300+ million CAPEX investment programme nearing completion.
We opened our first Radisson RED branded properties in Belgrade and Berlin, in February and June respectively.
This was the result of the full repositioning of two existing properties following extensive investments. We believe
the progressive and vibrant Radisson RED brand positioning will drive further value for these assets. Both
hotels have been well received by guests and have started contributing positively to our EBITDA* performance.
The art’otel brand and portfolio have been on an exciting growth journey in recent years, starting with the full
opening of art’otel London Battersea Power Station, in February 2023, followed by the full launch and opening
of art’otel Zagreb, in May 2024. The latter is an office-to-hotel conversion which marked our debut in
the Croatian capital, perfectly complementing our already strong presence on the Adriatic Coast.
In April 2024, we celebrated the soft launch of our much anticipated and brand flagship art’otel London Hoxton.
This ground-up development was the result of detailed planning and investment for over a decade and the result is
spectacular, with many more exciting phases yet to come. Our property repositioning programme to create art’otel
Rome Piazza Sallustio is nearing completion, with its soft opening planned for March 2025. Several other growth and
development opportunities are actively being pursued, to generate further growth for our Group.
See more on page 20
Unlocking
Growth
Radisson RED Berlin Kudamm Bar
art’otel Zagreb Skyline
About us
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
Strategic Report
Corporate Governance
Financial Statements
Appendices
4
5
Su
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Capital
and value
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OPERATE
Operating
platform
exposure
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Hospitality
real estate
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BUILD
Real estate
development
exposure
At a glance
Who we are
What we do
How we do it
We are an international hospitality
group, with a strong prime real estate
portfolio consisting of 51 properties
in operation in eight countries,
that transforms an asset’s potential
into value and profits.
We have a clear strategy to drive
growth and create long‑term value.
We recognise, and progressively
pursue, the opportunities for our
assets to reach their full potential.
We delight our guests every day,
through engaging service and
quality products in inviting places.
By valuing our people, being led by an
entrepreneurial Executive Leadership
Team and through investing in our
portfolio, opportunities with upside
potential and in local communities.
Our vision
To deliver a best-in-class performance through building further scale
and depth in our real estate portfolio and growing the platform with
our integrated ‘Buy, Build, Operate’ model.
We are proud to open our first art’otel in Croatia,
a £19 million investment which fully opened in May 2024.
Rooftop terrace – art’otel Zagreb
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
Strategic Report
Corporate Governance
Financial Statements
Appendices
6
7
21
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Austria
Hungary
Serbia
Italy
Croatia
Netherlands
Germany
United Kingdom
9
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1 1
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£1,328m United Kingdom
£319m The Netherlands
£85m Germany
£351m Croatia
£31m Other
£99m Under development2
Value
split by
geography1
12 United Kingdom
4,206 rooms
6 The Netherlands
1,073 rooms
7 Germany
1,106 rooms
22 Croatia
8 hotels
6 resorts
8 campsites
2,744 rooms
5,749 pitches
4 Austria, Hungary, Italy, Serbia
3 hotels
1 resort
496 rooms
Hotels and
resorts by
geography
45 Freehold hotels, resorts and Long
leasehold (ground rent)
23 Freehold Hotels
7 Freehold Resorts
2 Co-owned Hotels- included in
Freehold in the FS
5 Long leasehold
8 Campsites
6 Managed, leased and franchised
Hotels and
resorts by
ownership type
At a glance – continued
Our investment case
1 The fair values were determined on the basis of independent external valuations prepared in December 2024.
2 Properties under development include: New York, Westminster Bridge Road (London), art’otel Rome Piazza Sallustio.
1.
Business
model
Integrated developer,
owner and operator 2.
Focus on
equity value
Unique approach to
capital structure 3.
Hospitality
management
platform
All disciplines under one roof
• Our “Buy, Build, Operate”
business model provides
exposure and returns across
the entire hospitality real
estate value chain
• Strong preference for assets
with development and/or
repositioning potential
• Diversified real estate
portfolio focused on
pre-eminent European
cities and resort locations
• Driving equity value growth
through development,
property repositioning
and operational excellence
• Value created by capital
recycling through raising
funds (both third party
equity and debt) at asset
level, without diluting PPHE
shareholders
• Multiple sources of capital
providing a hedge against
market fluctuations
• Scalable platform offering
growth through management
of owned and third party
properties
• Unique and recently extended
strategic relationship with
Radisson Hotel Group,
enabling brand diversification
• Long-term management
agreements, providing base
fee income with performance-
based incentive mechanisms
We are an integrated hospitality real estate
group with a £2.2 billion portfolio of primarily prime
freehold and long‑leasehold assets in Europe.
(Excludes managed, operated, leased,
franchised and unconsolidated hotels)
(Includes franchises)
(Includes franchises)
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
Strategic Report
Corporate Governance
Financial Statements
Appendices
8
9
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Attractive brands
As independent property owners, our approach is to select the brand for each of our
properties which we believe will generate most value. We work with a number of distinct
and appealing brands from premium lifestyle to upper upscale and upscale.
An upper upscale, contemporary hotel brand featuring
individually designed hotels in vibrant city centre locations
and select resort destinations. Renowned for creating
memorable moments, Park Plaza caters to both leisure and
business travellers with stylish guest rooms and versatile
meeting facilities which are perfectly complemented by
award-winning restaurants and bars.
Feel the authentic
parkplaza.com
In 2022, we extended our long-standing partnership with
Radisson Hotel Group (‘Radisson’), providing us with access
to all of Radisson’s brands at favourable commercial terms.
This new agreement enabled us to launch the Grand Hotel
Brioni Pula, a Radisson Collection Hotel, in May 2022.
radissonhotels.com
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This award-winning premium boutique hotel is located on iconic
Chiltern Street in London’s West End and is surrounded by
fashion boutiques, cafés and restaurants. The hotel has been
inspired by Baker Street’s most famous resident, Sherlock
Holmes, and is a witty blend of heritage and playfulness, filled
with a stylish mix of antiques, curiosities and artefacts that are
bound to intrigue even the busiest of guests.
For curious minds
holmeshotel.com
Arena Hotels & Apartments is a collection of hotels and self-
catering apartment complexes offering relaxed and comfortable
accommodation within beachfront locations across the historic
settings of Pula and Medulin in Istria, Croatia and at a mountain
resort in Nassfeld, Austria. Arena Hotels & Apartments features
contemporary and warm design/interiors accompanied by welcoming
and friendly service, offering a holiday full of opportunities for
exploration and relaxation complemented by a food and drink
offering with a touch of local flavour.
arenahotels.com
PA R T N E R B R A N D S
A place to dream and be inspired, art’otel is a hotel like no
other. A contemporary collection of upper upscale, lifestyle
hotels, each inspired by a Signature Artist, forming a cultural,
gastronomic and social hub in the most creative areas of the
most interesting cities, attracting international, domestic and
local guests. Each art’otel is an arts and premium lifestyle hotel
devoted to creating and presenting original work.
Be bold. Be creative. Be original.
artotel.com
Arena Campsites and glamping sites are located on exclusive
beachfront sites across the southern coast of Istria, Croatia.
Situated within close proximity to the historic towns of Pula and
Medulin, each campsite provides a distinctive offering and relaxed
environment from which guests can experience Istria’s areas of
natural beauty and enjoy outdoor activities all year round.
arenacampsites.com
arenaglamping.com
Following the launch of the luxury Grand Hotel Brioni Pula, a
Radisson Collection Hotel, in 2022 we have further diversified
our property portfolio and consumer offering with the
introduction of our first two Radisson RED branded hotels.
The Radisson RED brand is an upscale/upper upscale brand with
a playful twist on the conventional and we are proud to now offer
this in the heart of Belgrade – Radisson RED Belgrade – and
in Berlin – Radisson RED Berlin Kudamm – following their
respective openings in February and June 2024.
radissoncollection.com
radissonred.com
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
10
11
Strategic Report
Corporate Governance
Financial Statements
Appendices
A selection of some of our
restaurant & bar brands
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Attractive brands – continued
Restaurants
& bars
JOIA is a restaurant, bar and rooftop
restaurant created by two Michelin starred
Portuguese chef Henrique Sá Pessoa, located
on the 14th, 15th and 16th floors of art’otel
London Battersea Power Station. JOIA means
‘jewel’ in Portuguese. The menu comprises
Petiscos (small tapas), with large dishes to
share, such as the signature Arroz de Marisco.
joiabattersea.com
YEZI is a brand new concept launched at
the end of 2023. This relaxed fine dining
restaurant and bar experience in the heart of
Zagreb, Croatia is a unique approach to Asian
Cuisine. The second is set to launch this spring
in Rome, located in the art’otel Rome Piazza
Sallustio. Inspired by the traditional Asian
tea-house style of eating, drinking and
socialising, YEZI focuses on the art of dim sum,
mixology, tea and European patisserie.
yezirestaurant.com
The Brush is an all-day grand café, Lounge
and cocktail bar taking inspiration from
some of the best signature dishes and drinks
from Europe. With a large outdoor terrace
and open for breakfast, brunch, lunch and
dinner, this is the perfect spot for any
moment of the day.
thebrushhoxton.co.uk
ARCA celebrates a casual Portuguese
sharing plates experience infused with
modern flavours, Asian inspirations
and impressive cocktails.
arcaamsterdam.com
TOZI is a Venetian-Italian restaurant and
bar concept spanning London Victoria and
Amsterdam. The brand has evolved in
Battersea with a focus on pizza as well as
the signature Cicchetti sharing plates.
Drinks include Italian wines and barrel
aged negronis served via a trolley.
tozirestaurantsandbars.com
PPHE Hotel Group
Annual Report and Accounts 2024
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Strategic Report
Corporate Governance
Financial Statements
Appendices
PPHE Hotel Group
Annual Report and Accounts 2024
12
Chairman’s Statement
Ken Bradley
Chairman
Ken Bradley
Chairman
“These openings are notable in what they signify. Firstly, the
successful evolution of PPHE into a truly pan-European, multi-brand
hospitality real estate group, generating broader customer appeal
and the opportunity for heightened long-term growth.”
Ken Bradley
Chairman
Introduction
I was pleased to be appointed Chairman of
the Board on 9 January 2025, succeeding
Eli Papouchado (‘Papo’) following his decision
to step aside. I am thankful to the Board for
its trust in me and look forward to engaging
with all stakeholder groups.
A year of unlocking longer-term growth
Looking back at 2024, I am pleased to report
on a year of excellent strategic progress
for the Group, marked by a number of key
highlights, including new openings and brand
diversification, as we continue to unlock longer-
term growth. We began the year with strong
momentum and delivered year-on-year
growth. We also entered the final stages of our
£300+ million development, repositioning and
refurbishment pipeline, which has included the
expansion of our upper upscale premium
lifestyle art’otel brand in Zagreb, Croatia, and
Hoxton, London, all of which will contribute to
the Group’s continuing growth.
Alongside this excellent strategic progress,
the Group’s existing portfolio performed
strongly to deliver a solid like-for-like*1
performance, driven by higher occupancy
levels in all our operating markets, achieved
despite a challenging geo-political and
macro-economic environment and strong
prior year comparatives.
Continued focus on Environment,
Social and Governance
We strive to minimise our impact on the
environment in which we operate and to
positively impact all our stakeholders,
including employees, guests, partners and
those in our local communities. To reflect this,
our Environmental, Social and Governance
(ESG) strategy and commitments are divided
between Sustainable Properties, Forward-
looking People, Strong Local Communities
and Resilient Supply Chain, with governance
at its heart.
1 The like-for-like* performance excludes the 2024
results of the newly opened art’otel London Hoxton
and the results of art’otel Zagreb for the first ten
months of 2024.
Annual Report and Accounts 2024
15
Strategic Report
Corporate Governance
Financial Statements
Appendices
PPHE Hotel Group
Annual Report and Accounts 2024
14
PPHE Hotel Group
Chairman’s Statement – continued
We recognise the importance of
engagement with all our stakeholders
to understand their priorities and hear
their feedback. The Board and leadership
team regularly meet with shareholders and
seek to be available on an ongoing basis.
The Group actively engages with our team
members through twice-a-year engagement
surveys and quarterly town hall meetings,
and our guests always have the opportunity
to tell us about their experience staying
with us.
As we start the new financial year, we
remain focused on ESG and good corporate
governance and will continue to develop and
expand our ESG reporting and fundamental
KPIs for the business.
Further details can be found in the CEO Review
on pages 18 to 25.
The Board
We welcomed Greg Hegarty to the role
of Co-Chief Executive Officer in February
2024, alongside the Company’s long-serving
President and Chief Executive Officer, Boris
Ivesha. This appointment, which followed
Greg’s appointment to the Board in May
2023, further strengthens the Group’s
strong leadership team and is in keeping
with the PPHE’s long-standing emphasis on
promoting internal talent and intra-Group
mobility. Greg manages the day-to-day
running of the business and has a key role
in defining and implementing the Group’s
long-term strategy. Greg also remains
responsible for the Group’s ongoing
proactive engagement with shareholders.
Meanwhile, Boris Ivesha is focused on
pursuing growth and development
opportunities for the Group, including
concept creation.
In the first quarter, Marcia Bakker
assumed the role of Chair of the Group’s
ESG Committee. Marcia assumed this
responsibility from me, but I still remain a
member of the Committee. Nigel Keen also
joined the Committee, which reflects our
commitment to this important area of
our business.
As mentioned above, I succeeded Papo as
Non-Executive Chairman in January from
my prior role of Non-Executive Deputy
Chairman, having joined the Group as a Non-
Executive Director in 2019. Papo, a founder
of the Group, has held the role of Chairman
since its formation in 1989. Over this period,
he has played an instrumental role in both
the Group’s growth and development, and
the expansion of the Park Plaza and art’otel
brands across Europe.
We have a strong, multi-disciplined Board
and highly skilled leadership team with an
entrepreneurial mindset. Together, we look
forward to continuing to drive forward our
growth strategy and the longer-term
development of the Group.
Dividends
The Board has a progressive dividend policy
and remains committed to delivering value
to its shareholders.
In light of this, we have declared a proposed
final dividend of 21 pence per share, an
increase of 5.0%, which, combined with the
interim dividend, brings the total dividend
for the 2024 financial year to 38 pence per
share, an increase of 5.6% compared
with 2023.
In addition, we were pleased to complete two
Share Buy-Back Programmes, amounting
to a total of £7.9 million, which the Board
considered the best means to return a
portion of capital to shareholders. We will
continue to engage with shareholders
regarding how we can best deliver
enhanced value.
Further details about dividend and the
Share Buy-Back Programmes are set out
in the Financial Review on pages 40 to 48.
A platform for future growth
The excellent performance achieved by
the Group during 2024 provides a strong
platform for long-term growth. Our portfolio
spans 51 properties in operation across
eight key countries in Europe, and we are
proud to deliver memorable experiences for
our guests through our seven brands every
day. This is made possible by our unique
business model, our relentless focus on
quality and our team’s expertise.
As we near the completion of our £300+
million development pipeline, we are working
on longer-term development opportunities
to support our future growth.
We look forward to building on our
successful and proven strategy in 2025
and beyond, and updating our stakeholders
on further progress.
Ken Bradley
Chairman
Roni Hirsch was appointed as Non-Executive
Director on 9 January 2025. Roni is the CEO
of the Red Sea Group, a role he has held
since 1993. The Red Sea Group is controlled
by Papo, who, together with his family
trusts, owns 32.93% of the voting rights in
PPHE Hotel Group.
We have a strong, multi-disciplined Board and highly
skilled leadership team with an entrepreneurial mindset.
Ken Bradley
Chairman
51
properties in operation across
eight key countries in Europe
PPHE Hotel Group
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CEO Review
Boris Ivesha & Greg Hegarty
“The progress with our £300+ million development pipeline
continues at pace, and the soft opening of our new art’otel London
Hoxton was a momentous occasion for the Group. Our accretive
pipeline nearing completion affords us confidence as we move
through the year and into the busy summer season.”
Boris Ivesha
President & Chief Executive Officer
2024 in review
2024 was an exciting and busy year for the
Group as we neared completion of our £300+
million development pipeline. This included
opening four new hotels across four
countries in the year, one of which was our
flagship art’otel London Hoxton, as well as
preparing for the forthcoming opening of our
new art’otel Rome Piazza Sallustio in Italy.
The Group’s operational and financial
performance was characterised by our
focus on driving EBITDA* and EBITDA margin*
growth through a combination of occupancy
growth and a strong internal focus on
efficiencies and enhancements.
We saw increased occupancy across our
property portfolio, including newly opened
hotels, and the stabilisation of room rates
alongside a normalisation of the business
mix throughout the year. While leisure travel
remained the most dominant segment,
bookings stabilised, meetings and events
bookings recovered, and business travel
and in-person engagements increased,
which supported the continued recovery
of corporate travel albeit at a slightly slower
pace than anticipated. As predicted, this led
to a moderation of average room rate*.
This was particularly true in the Group’s two
largest markets, the UK and the Netherlands.
In Croatia, our portfolio of eight hotels, six
resorts and eight campsites performed well,
particularly during the peak summer months
of July and August.
Boris Ivesha
President & Chief Executive Officer
Greg Hegarty
Co-Chief Executive Officer
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PPHE Hotel Group
CEO Review – continued
We were pleased to achieve a strong
underlying performance for the year, against
strong comparables and despite the ongoing
challenging macro-economic and geo-political
backdrop. This was underpinned by the
strength of our unique Buy, Build, Operate
business model, the broadening appeal of
our high quality multi-brand portfolio and
the hard work and dedication of our teams.
Delivery of £300+ million
development pipeline
After years of planning, investment and
construction, the delivery of our £300+
million repositioning and refurbishment
pipeline is now nearly complete, with several
high profile hotels opening in the year, and
the efforts of our team are now reflected
in the fantastic reviews of our guests.
Most notably, we opened our second art’otel
in London. The development cost for art’otel
London Hoxton (including the land), was
approximately £300 million delivered through
our partnership with Clal Insurance. In 2025,
we expect to launch the extensive office
space available at this property, as well as
the restaurant and bar on the 25th floor.
We have a long-term hotel management
agreement for this 357 room property, and
upon stabilisation, we expect it to contribute
£20+ million of additional EBTIDA*.
We opened our first two Radisson RED
branded hotels following our recently
extended strategic partnership with
Radisson Hotel Group, facilitating our
focus on brand diversification. These were
Radisson RED Belgrade in February 2024
and Radisson RED Berlin Kudamm with a
soft opening in June and full opening
in September 2024.
These new openings followed a £19 million
investment at art’otel Zagreb – the Group’s
first art’otel in Croatia – which fully opened
in May 2024, building on the hotel’s soft
opening in October 2023.
Whilst in some instances the full openings
of these hotels were slightly later than
initially anticipated, we are delighted with
the excellent guest feedback and reviews
received so far as well as the performance
to date.
Finally, the repositioning of art’otel Rome
Piazza Sallustio in Italy is now in its final
stages and we look forward to welcoming
guests from March 2025.
The strategic progress delivered during the
year yet again demonstrates the value of our
unique ‘Buy, Build, Operate’ business model,
which sees the Group maximise value by
acquiring and (re)developing assets to reach
their full potential, operating them to deliver
high quality hospitality experiences, and
unlocking investment for future opportunities
through non-dilutive capital recycling.
These openings are notable in what they
signify. Firstly, the successful evolution
of PPHE into a truly pan-European, multi-
brand hospitality real estate group,
generating broader customer appeal and
the opportunity for heightened long-term
growth. Secondly, the successful execution
of our expanded strategic partnership with
Radisson Hotel Group, namely the leveraging
and development of cross-business brands
to accelerate our expansion in key gateway
cities and to drive brand awareness across
multiple customer segments.
“Our margin improvement in the year was the result
of our focus on cost management, centralisation
and technological initiatives.”
Greg Hegarty
Co-Chief Executive Officer
“We are pleased to have secured several exciting longer-term
development opportunities as we look to expand our portfolio in
London and beyond and deliver value for our stakeholders.”
Boris Ivesha
President & Chief Executive Officer
A solid like-for-like* performance
We saw solid underlying trading
momentum throughout the year, with
like-for-like* revenue, which excludes
the newly opened art’otel Zagreb and
art’otel London Hoxton, 3.3% higher at
£428.3 million (2023: £414.6 million).
Like-for-like* EBITDA* increased by 8.7%
to £139.3 million (2023: £128.2 million),
delivering an enhanced like-for-like*
EBITDA margin* of 32.5% (2023: 30.9%).
This margin performance was aligned
with our commitment to enhance margins
through our focus on cost management,
centralisation and technological initiatives.
We were particularly pleased to achieve
this against a more measured travel
market backdrop and macro-economic
environment, and a strong comparable
performance achieved in 2023.
Reported revenue, which included the
impact of the phased openings of new hotels,
increased by 6.8% to £442.8 million. Reported
EBITDA* was up 6.5%, at £136.5 million and the
EBITDA margin* was 30.8%.
Our Business Review on pages 49 to 63 sets
out the full-year performance of our assets
across all our international markets.
Longer-term development opportunities
As we complete the final phase of our
£300+ million development pipeline, we are
pleased to have secured several exciting
longer-term development opportunities
as we look to expand our London portfolio
and deliver value for our stakeholders.
We have secured planning approval for a
186-room mixed-use hotel led development
at London Westminster Bridge Road, in
the vibrant South Bank area. The site was
purchased for £12.5 million in 2019 and will
increase the Group’s presence in the capital
to 3,900 rooms, cementing our very strong
presence in this part of London.
Other longer-term development opportunities
include a 465-room mixed-use hotel adjacent
to Park Plaza London Park Royal in West
London and consent to convert 6,500m2 of
subterranean space at Park Plaza Victoria
London to a 179-room subterranean hotel.
On our development site near Hudson Yards
in New York we completed the demolition of
the existing structures and we are reviewing
development opportunities for this site.
We also continue to explore investment and
development opportunities in existing and
target markets, including Croatia, where
we see a clear opportunity to drive returns
across the entire hospitality real estate value
chain through our unique business model.
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CEO Review – continued
Our sustainability commitment
Throughout the year, our teams made
good progress against our sustainability
commitments, as described in the ESG
section of this report. We were particularly
pleased to have implemented a number of
initiatives across our hotels to minimise
environmental impact, including the
introduction of large amenities’ dispensers,
which have replaced small, single-use
plastic bottles, the offer of wooden cards
(instead of plastic) in some of our hotels,
supported by a focus on our digital
check-in to reduce card use altogether.
Having submitted our commitment letter
to the Science Based Targets initiative (SBTi)
in 2023, in 2024 we have engaged external
specialists to support us in assembling
our decarbonisation plan and refining our
emission reduction targets. The project is
expected to be completed in 2025, with the final
output being a comprehensive list of actions
to reduce the carbon emissions across
the whole business and our targets being
submitted to SBTi. This will address emissions
throughout all our business activities, ranging
from implementing energy efficiency initiatives
to working with our suppliers to improve the
environmental performance of the products
and services we purchase.
This year, we have also worked with our
listed subsidiary Arena Hospitality Group
D.D. to ensure preparedness for the IFRS S1
and S2 and CSRD reporting frameworks.
With this in mind, Arena Hospitality Group
D.D. has conducted its double materiality
assessment in 2024, covering the Croatian,
German and CEE regions, while the
consolidated Group will conduct it in the first
half of 2025, informing our ESG reporting
requirements for the coming years.
Further details on our strategy, targets and KPIs
are set out at pages 28 to 39.
“The Board remains highly
focused on enhancing value
for shareholders, which
is reflected in the Group’s
progressive dividend policy.”
Increased shareholder returns
The Board remains highly focused on
enhancing value for shareholders, which
is reflected in the Group’s progressive
dividend policy. This will see £15.9 million
returned to shareholders in respect
of 2024 through a 5.6% increase in total
ordinary dividend to 38 pence per share,
and the completion of two Share Buy-Back
Programmes in the year.
Further details about dividend and the Share
Buy-Back Programme are set out in the Financial
Review on pages 40 to 48.
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PPHE Hotel Group
CEO Review – continued
Our expert teams
Our teams are at the heart of our business
and at the forefront of creating memorable
experiences for our guests. We place great
importance on ensuring that we provide
rewarding long-term careers for all our
employees at every level, so they feel valued
at every stage of their career, positioning
the Group as a market leading employer
of choice.
During the year, we hired many employees,
which included more than 250 newly
created jobs at art’otel London Hoxton.
>250
newly created jobs at
art’otel London Hoxton
We invested in a Head of Employee Experience
role in our head office team to futureproof all
parts of our employee life cycle and implement
leadership training and development
initiatives to support a sustainable talent
pipeline over the coming years. We also have
programmes to encourage talent to a career
in hospitality, including a degree
apprenticeship programme.
We are seeing the positive output
from our focus on engagement, retention
and development. The integration of our
London in-house housekeeping colleagues
into hotel operations has delivered a
significant improvement in engagement
and productivity levels and has reduced
staff turnover.
I am pleased to report that our continued
efforts in this area are resonating well
with our colleagues, with our twice-annual
employee engagement surveys returning an
increase in the Group’s engagement scores
from 83.0% to 84.5%, notably exceeding the
sector average of 82%.
We also continued to deploy technology to
support our teams, optimise the service
offered to our guests in the UK and the
Netherlands, and to enhance back-office
efficiencies. We introduced a digital concierge
platform for guests at our lifestyle properties.
We expanded our in-house data and
technology team to build and manage data
cloud platforms, customer data platforms
and robotics and Artificial Intelligence (AI)
programmes and processes, including
piloting AI for our customer service centre.
In Croatia, to address an increasingly
competitive labour market for skilled
hospitality workers, the HR team has
been focused on diversifying the sources
of labour with overseas recruitment
on a permanent and seasonal basis.
To accommodate this approach, there
is greater provision for employee
accommodation and transport between
Company sites. In Germany, we opened the
first Radisson RED in Berlin and recruited
and onboarded a new team aligned to new
brand standards. There has also been the
expansion of an employee communications
app among the properties of our Croatian
subsidiary, with this app now also providing
some learning content and a survey tool.
Looking ahead
Notwithstanding wider macro-economic and
geo-political uncertainties, the Board expects
to build on the record performance achieved
during 2024, and to further grow revenue
and EBITDA* in 2025, driven by a growing
contribution from its newly opened and
repositioned hotels. Forward booking
momentum across all regions for Q2 and
the remainder of the year is encouraging
following a quieter Q1, the Group’s slowest
quarter in the financial year.
The Board remains confident in delivering
results in line with market expectations for
2025 and the longer-term opportunities
ahead. The Board maintains its expectation
that its newly-opened hotels (including
art’otel Rome Piazza Sallustio once open) will
generate at least £25 million of incremental
EBITDA* upon stabilisation of trading.
On 6th March 2025, we will welcome the first
guests to our first property in Italy – art’otel
Rome Piazza Sallustio – following a major
repositioning programme. As ever, we would
like to thank all our team members for their
hard work and excellent service delivery
during 2024, and our shareholders for their
continued support.
Boris Ivesha
President & Chief Executive Officer
Greg Hegarty
Co-Chief Executive Officer
“We are seeing the positive
output from our focus on
engagement, retention
and development.”
Entrepreneurial
Our team members share our
purpose of creating valuable
memories for our guests and
value for our assets. Our purpose
and values underpin our overall
Company blueprint: to place the
guest experience at the heart of
everything we do.
People-oriented
We’re firm believers that inspiring
our team members is the key to
inspiring our guests. This is why
we focus on making PPHE a fun
and inclusive working
environment, which is supported
by great leadership.
Creators
We refer to our team members as
Creators. By valuing our Creators,
and by continuously investing in
opportunities and our portfolio,
we create valuable memories for
our guests and value for our
assets, people and communities.
Our culture
Park Plaza London Westminster Bridge – Welcoming guests
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PPHE Hotel Group
Annual Report and Accounts 2024
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PPHE Hotel Group
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OPERATE
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Hospitality
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BUILD
Real estate
development
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Business model
How we create value
Engagement with our stakeholders
The value we create
Engagement with our stakeholders has enabled us to
better understand what is considered material to them
and better position our business model and strategy.
Read more about our materiality assessment in the ESG report on pages 68 to 83.
Creating valuable memories for our guests and
value for our assets, people and local communities.
Our purpose
Key sources of value
Diverse prime property portfolio
Our real estate portfolio consists of properties
in the heart of strategic gateway cities and
resort destinations.
In-house hospitality management platform
Our expert team of hospitality specialists
manage our own properties as well as those
of third parties.
Our people and culture
Our strong track record of creating memorable
guest experiences is consistently delivered by
our team members.
Multi-brand approach
We select the right brand for each property,
using our own as well as those from
the Radisson Hotel Group.
International network
Our strong international network cultivated in
the past 30+ years includes banks, contractors,
suppliers and strategic partners.
Financial strength and non-dilutive capital approach
Our portfolio has grown from a single property into
a £2.2 billion portfolio without diluting shareholders
since IPO, and we enjoy a strong cash position.
Team members
We offer rewarding international
employment opportunities for our
team members, with continuous
investment in training programmes.
84.5%
Employee engagement score
measured through surveys
Guests
We provide high quality, memorable
hospitality experiences in dynamic and
vibrant destinations, combining exceptional
service, premium products and thoughtfully
designed experiences. Our commitment
to excellence ensures that every guest
enjoys unforgettable moments, tailored
to their needs and expectations, creating
lasting impressions and inspiring loyalty.
87.8%
Guest satisfaction
rating score
Investors
Our shareholders benefit from
the attractive industry dynamics
of the markets in which we operate
as well as our flexible business model,
developments and operations.
This drives both capital appreciation
and income from dividend.
38p
Total ordinary dividend
for the year, per share
Affiliates
Our partnership with Radisson Hotel
Group gives us access to global distribution
systems, powerful online and mobile
platforms, and global sales, marketing
and buying power. As part of the Radisson
Rewards™ programme, members account
for a significant part of the annual occupancy
of our Radisson affiliated properties.
20m
Radisson Rewards™
global loyalty programme
has over 20 million
members worldwide
Local communities
We care about our neighbourhoods and make positive contributions to
our local communities and the people who work and/or live there through
fundraising activities, employment opportunities, volunteering, and local
resourcing partnerships and charities.
Suppliers
As an owner/operator, long-term sustainability and ethical operations
are high on our agenda, including supply chain management and the
development of long-term relationships with strategic partners,
many of whom are local.
Our values
Trust
Respect
Teamwork
Enthusiasm
Commitment
Care
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Appendices
C
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R E A L E S T A T E
Strategy at a glance
Strategic blocks
2024 performance
2025 priorities
Related risks and opportunities
KPIs
Property:
• Full launch of art’otel Zagreb (office to hotel conversion),
following completion of rooftop bar
• Soft opening of art’otel London Hoxton, with nearly all
rooms, event space and spa & wellness completed
• Progressed development project in Rome, scheduled to open
March 2025
• Completed repositioning programmes of two Radisson RED properties
in Belgrade (February) and Berlin (September)
• Secured planning to develop 186-room hotel near Waterloo Station
in London
• BREEAM Excellent certification awarded to art’otel London Hoxton
and work begun to obtain the BREEAM in-use certification for
other properties
Operations:
• Build the opening teams for all new properties
• Continued focus on learning and development, improved productivity
and team member engagement
• Drove the commercial launch strategies for new properties and for
existing portfolio
• Continued to drive efficiencies through technology implementations
and efficiency programmes
Property:
• Complete investment at art’otel London Hoxton (25th floor
restaurant, 5,000m2 office space, second gym and studio space)
• Complete and launch art’otel Rome Piazza Sallustio
• Drive detailed design stage, define operating models
and select brands for development sites in London
(Westminster Bridge Road and Park Royal) and New York
• Pursue new growth opportunities
Operations:
• Review operating structures in light of portfolio growth and wider
macro-economic environment
• Continue to drive performance of newly opened hotels during
2024/2025
• Introduce new energy saving programmes, particularly gas
reduction initiatives
• Continue to focus on learning and development, improved
productivity and team member engagement
• Drive the commercial performance of all properties in their
respective markets and support the maturity of newly launched
properties
• Continue to drive operational efficiencies through technology
implementations and efficiency programmes
• Create and implement a new Food & Beverage Operating Model to
further enhance performance
Property:
• Funding and liquidity – ability to raise finance allows us to
pursue opportunities for growth. See page 96 for related
risk detail.
• Development project delivery – opportunities to drive
growth through the successful planning and delivery of
new developments. See page 96 for related risk detail.
• ESG – asset values could be enhanced by meeting the
highest standards for sustainability in our properties.
See page 70 for ESG strategic objectives.
Operations:
• Economic climate and market dynamics – impact the
performance of both established and newly opened hotels
– see page 95 for related risk details.
• ESG – positive impact of the delivery of our ESG strategy
on our communities, our people and the environment –
see page 99 for related risk detail.
• Our People – Talent attraction and retention should be
strengthened through the delivery of various engagement
and people development initiatives – see page 99 for
related risk detail.
• Technology – elevated guest experience and optimised
performance through the early adoption of new
technologies – see page 97 for related technology and
information security risk details.
• Safety and continuity – operational performance could be
affected by health and safety issues or operational
disruption – see page 98 for risk details
Property:
• Successfully deliver and stabilise
openings and repositioning projects
• EPRA NRV*
• EPRA EPS*
• Net return on shareholder capital
• Disclosure of Scope 1, 2 and 3 carbon
emissions in TCFD report
• Carbon net zero no later than 2050
Operations:
• EBITDA* and EBITDA margin*
• RevPAR*
• Recruitment and retention
• Employee engagement
• Guest rating score
• Health and safety assessment scores
Property:
• Fully completed and launched art’otel Zagreb, following the opening of
the rooftop bar
• Continued to drive maturity of recent investments (Grand Hotel Brioni
Pula, a Radisson Collection Hotel, Arena Nassfeld Hotel in Austria and
three campsites in Croatia)
Operations:
• Continued to focus on building the teams and improving the overall
guest experience
• Continued to drive the performance of all properties
• Continued to drive efficiencies through technology implementations
Property:
• Complete CAPEX investments in two campsites, ahead of the 2025
summer season
• Drive performance of recently invested in leisure city centre
properties
Operations:
• Launch, and drive the performance of, two newly invested
in campsites
• Continue to focus on improving the overall guest experience
• Continue to drive the performance of all properties
• Continue to drive efficiencies through technology
implementations
Property:
• Funding and liquidity – ability to raise finance allows us to
pursue opportunities for growth. See page 96 for related
risk detail.
• Development project delivery – opportunities to drive
growth through the successful planning and delivery of
new developments. See page 96 for related risk detail.
• ESG – asset values could be enhanced by meeting the
highest standards for sustainability in our properties.
See page 70 for ESG strategic objectives.
Operations:
• Economic climate and market dynamics – impact the
performance of both established and newly opened hotels
– see page 95 for related risk details.
• ESG – positive impact of the delivery of our ESG strategy
on our communities, our people and the environment –
see page 99 for related risk detail.
• Our People – talent attraction and retention should be
strengthened through the delivery of various engagement
and people development initiatives – see page 99 for
related risk detail.
• Technology – elevated guest experience and optimised
performance through the early adoption of new
technologies – see page 97 for related technology and
information security risk details.
• Safety and continuity – operational performance could
be affected by health and safety issues or operational
disruption – see page 98 for risk details
Property:
• Successfully deliver and stabilise
openings and repositioning projects
• EPRA NRV*
• EPRA EPS*
• Net return on shareholder capital
• Disclosure of Scope 1, 2 and 3 carbon
emissions in TCFD report
• Carbon net zero no later than 2050
Operations:
• EBITDA* and EBITDA margin*
• RevPAR*
• Recruitment and retention
• Employee engagement
• Guest rating score
• Health and safety assessment scores
Operations:
• Launch of, and opening preparations for, five new properties across
five different countries and two brands, including a new brand for the
Group (Radisson RED)
• Further leveraged the extended partnership with Radisson Hotel
Group, with increased collaboration on our art’otel brand and
utilisation of Radisson Collection (in Croatia) and Radisson RED
(in Belgrade and Berlin)
• Delivered elevated art’otel brand experience in London, completed
brand audits across all Park Plaza properties and implemented
Radisson RED brand across two assets
• Continued to drive efficiencies for the managed properties
through centralisation and introduction of new technologies
• Continued to implement new ESG strategy
• Appointed Responsible Business Ambassadors at every property
• Continued to drive recruitment programmes to create jobs and
opportunities for local communities
• Continued to implement several organisational changes following
a review conducted in 2023, supporting growth
Operations:
• Continue to develop art’otel brand growth strategy,
in partnership with Radisson Hotel Group
• Continue to drive multi-brand and diversification strategy
• Full opening of art’otel London Hoxton
• Launch of art’otel Rome Piazza Sallustio
• Focus on driving the maturing of newly opened properties
• Continue to develop art’otel brand proposition and brand
activation
• Continue to drive efficiencies for the managed properties
through centralisation and introduction and adoption
of new technologies
• Continue to drive the new ESG strategy
• Continue to drive learning and development programmes
• Continue to implement changes following the 2023
organisational review
Operations:
• Economic climate and market dynamics – impact the
performance of both established and newly opened hotels
– see page 95 for related risk details.
• ESG – positive impact of the delivery of our ESG strategy
on our communities, our people and the environment –
see page 99 for related risk detail.
• Our People – Talent attraction and retention should be
strengthened through the delivery of various engagement
and people development initiatives – see page 99 for
related risk detail.
• Technology – elevated guest experience and optimised
performance through the early adoption of new
technologies – see page 97 for related technology and
information security risk details.
• Safety and continuity – operational performance could
be affected by health and safety issues or operational
disruption – see page 98 for risk details
Operations:
• EBITDA*
• Successfully deliver and stabilise
openings and repositioning projects
• Growth in portfolio
• Growth in fee-based income through
third party or joint venture
management agreements
• Monitoring of gender pay gap for the
UK and the Netherlands
• Identifying metrics for diversity
and inclusion
Our strategic
framework is built
across a series of
distinct objectives,
supported by PPHE’s
pillars and enablers,
which allow us to
achieve our vision of
delivering a best-in-
class performance
through building
further scale and
depth in our real
estate portfolio and
growing the platform
with our integrated
‘Buy, Build,
Operate’ model.
Our vision
PPHE Hotel Group
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1.
Strategic
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Strategy in action
PPHE Hotel Group is primarily focused on owning
hospitality real estate in city centre locations of capitals and
major cities that hold strong appeal for business travellers,
leisure travellers and event delegates. The Group invests in
acquiring assets with upside potential, including land sites
and conversion and repositioning opportunities.
Unlocking growth in
city centre locations
Investment strategy
Following a period of investment, PPHE
unlocks value by launching and then
operating the properties. This strategic
approach not only enhances the value
of the assets but also ensures a steady
flow of revenue as the properties
mature and stabilise.
Development pipeline in 2024
In 2024, PPHE completed most of its
development pipeline with four new
openings, and a fifth is nearing completion,
with a launch planned for March 2025.
The new openings are strategically
located in prime city centre locations:
• London (Hoxton area)
• Berlin (near the Kurfürstendamm
in Charlottenburg)
• Belgrade (near the city’s old town)
• Zagreb (in the heart of the city)
• Rome (near the city’s main
landmarks, opening in 2025)
Annual Report and Accounts 2024
31
Strategic Report
Corporate Governance
Financial Statements
Appendices
PPHE Hotel Group
Annual Report and Accounts 2024
30
PPHE Hotel Group
Strategy in action – continued
Putting our
guests in the
heart of the city
Operational focus
PPHE’s own award-winning hospitality management platform
drives the day-to-day operations of these hotels. The focus
is on driving the maturing of these newly opened assets to
ensure that they reach their full potential.
Future EBITDA* uplift
On stabilisation, these new openings, along with the yet to
open art’otel in Rome, are expected to deliver an additional
£25 million in EBITDA* to the Group. This significant increase
in EBITDA* highlights the success of PPHE’s strategic
investment and operational strategies.
Well positioned for further growth
PPHE Hotel Group’s focus on acquiring and developing
hospitality real estate in high demand locations, coupled
with its effective management platform, positions it strongly
for continued growth and profitability. The recent developments
in 2024, the forthcoming launch in 2025 and the Group’s
longer-term pipeline projects (it holds various land sites with
hotel planning permission in London) are testaments to the
Group’s commitment to excellence and strategic foresight.
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Strategic
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PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
Strategic Report
Corporate Governance
Financial Statements
Appendices
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Strategy in action – continued
Memorable relaxation
Arena Hospitality Group
Through its investment in Arena, PPHE
has been in the privileged position to
be working very closely with Arena’s
leadership and their expert specialist
teams, who have decades of experience
in operating leisure properties across
Croatia’s Istrian region. It has enabled
both companies to broaden their
horizons, investing in and managing
a diverse portfolio of resorts, hotels,
self-catering apartments, campsites
and an all-glamping property. This
diversification is not merely a strategic
business move but a recognition of
the evolving demands of modern
travellers, who seek unique and
versatile holiday experiences.
Repositioning and expansion
Since its initial investment, PPHE has
committed substantial resources
towards repositioning, upgrading and
expanding Arena’s offerings. The Group
has meticulously curated a portfolio that
today includes a five-star hotel, several
four-star hotels and resorts, three-star
self-catering accommodations, and eight
campsites. This thoughtful expansion
reflects a deep understanding of market
needs and a commitment to delivering
high quality experiences across various
segments of the hospitality industry.
Focus on Istria
A significant part of Arena’s portfolio
is concentrated in Croatia’s picturesque
Istria region. This area is renowned for
its historical sites, such as one of the
best-preserved Roman amphitheatres,
and its culinary delights, including
high quality wines, truffles and olive oil.
The region’s stunning coastlines and
crystal-clear oceans further enhance
its appeal, making it a prime destination
for tourists seeking both leisure
and adventure.
Given Istria’s proximity, many guests
arrive by car from neighbouring
countries such as Germany, Austria,
Switzerland and Italy, as well as from
Croatia. Additionally, visitors from the
UK, Nordics and the Netherlands add to
the diverse mix of tourists, attracted by
the region’s unique offerings and easy
accessibility. The tourism potential of
Istria continues to grow, with internal
airport arrivals yet to fully recover
following the pandemic, indicating further
room for growth and visitor influx.
Significant investments
Recognising the need to diversify
geographically and across different
market segments, Arena has invested
approximately €200 million in its leisure
and outdoor offerings in recent years.
This substantial investment has not only
enhanced the quality of the existing
properties but also facilitated the
acquisition of new assets, further
solidifying Arena’s position in the market.
Venturing into Austria
In addition to its extensive portfolio in
Croatia, PPHE has expanded its reach
into Austria with the acquisition of a
resort hotel in Nassfeld. This property
appeals to a wide range of guests,
including couples, families and groups
of friends, offering a versatile destination
for both summer and winter activities,
such as skiing. This strategic acquisition
underscores PPHE’s commitment to
providing diverse and high quality
holiday experiences, catering to various
preferences and requirements.
An experienced owner/operator
in leisure and outdoor
PPHE’s foray into the leisure and
outdoor segment of the hospitality
industry through Arena Hospitality
Group represents a significant
expansion of its portfolio and an astute
response to the evolving demands of
the tourism market. By investing heavily
in upgrading and expanding Arena’s
offerings, PPHE has strengthened its
position as a leading player in the
industry, blending urban sophistication
with scenic retreats. As the Group
continues to diversify and explore new
opportunities, it remains committed to
delivering exceptional experiences,
ensuring that its properties across
Europe stand as exemplars of quality,
luxury and innovation.
PPHE Hotel Group is a name that resonates with contemporary sophistication and prime city centre
locations. Known primarily for its upper upscale and lifestyle properties, PPHE has made a significant mark
in the hospitality industry with its strategic investments and expansion. However, since 2008, the Group
has ventured beyond the urban landscape, making notable strides in the leisure and outdoor segments
of the hospitality sector. This shift was marked by its investment in what is now recognised as the
Arena Hospitality Group (‘Arena’), where PPHE stands as the largest and controlling shareholder.
From prime city centres to scenic retreats
PPHE’s diversification though its leisure and outdoor segments
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
Strategic Report
Corporate Governance
Financial Statements
Appendices
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35
Strategy in action – continued
PPHE is a distinguished hospitality real estate owner that stands out in the industry for its strong asset
base and integrated operating platform. Unlike many of its counterparts, which often separate property
ownership from management and branding, PPHE maintains full control over its properties, ensuring
seamless operations and high standards across all its ventures.
Industry context
In the hospitality industry, it is common
for hotel owners, such as private equity
firms and institutional investors, to engage
third party management companies along
with commercial brands. This model, while
widespread, does mean that there are
three stakeholder parties involved whose
priorities may not always be aligned.
PPHE, however, adopts a different
approach by keeping full control over its
properties. This integrated model not only
enhances operational efficiency but also
ensures that the Company’s strategic
vision is consistently implemented across
its portfolio.
Ownership and management
PPHE typically has an ownership interest
in the properties it manages. This dual role as
owner and operator allows PPHE to align its
interests with those of the property, ensuring
that decisions are made with a long-term
perspective. In addition to managing its own
properties, PPHE also provides management
services to other property owners. This
expands its revenue streams and leverages its
extensive expertise in hospitality management.
Branding strategy
PPHE uses a combination of its own
brands and brands licensed from other
entities. A key partnership is with Radisson
Hotel Group, under which PPHE operates
Park Plaza hotels through a master franchise
agreement. This relationship allows PPHE
to tap into Radisson’s extensive brand
recognition and loyalty programmes while
maintaining operational control. The Group
has also entered into an agreement with
Radisson for its art’otel brand, whereby this
is fully integrated into Radisson’s brand
portfolio, reservation system and commercial
programmes, with Radisson obtaining certain
development rights to mutually grow the
art’otel portfolio. Additionally, PPHE has
preferred commercial agreements with
Radisson for using other Radisson brands,
providing flexibility and a broad range of
branding options for its properties. Its recent
utilisation of Radisson Collection (luxury
segment) and Radisson RED (upscale
segment) are examples of this.
Scale and reach
PPHE’s operating platform manages over
£2.2 billion in properties, spanning eight
countries and nearly 20 cities. This extensive
portfolio includes a diverse array of
hospitality offerings, such as five-star hotels,
lifestyle hotels, conference and airport hotels,
self-catering resorts, campsites, a glamping
property, destination restaurants and bars,
large spas, and more.
This diversity enables PPHE to cater to
various market segments and customer
preferences, enhancing its competitive edge.
Management excellence
PPHE’s expert team is a cornerstone of
its success. The team’s extensive experience
and skills cover a wide range of hospitality
sectors, ensuring that each property is
managed to the highest standards. Each
PPHE property has its dedicated management
team, supported by regional leadership and
central support services. This structure
ensures localised attention to detail while
leveraging the resources and expertise of
the wider PPHE organisation.
Comprehensive services
PPHE’s management platform offers a
broad spectrum of services, making it a
stand alone value store recognised for
excellence and innovation.
These services include the following:
• Acquisitions and Development: leveraging
our broad network, we continuously
source value-add opportunities.
• Development and Technical Services:
our team oversees the development
of new properties and renovations,
the highest standards of design
and functionality are met.
• Concept Development and Launches:
we excel in creating unique hospitality
concepts that cater to market demands.
From concept development to the grand
opening, our team ensures that each
property launch is a success.
• Legal and Governance: With two listed
companies in the Group, both adhering to
high standards, governance and compliance
are at the forefront of the legal team.
• Commercial: we aim to maximise revenue
through strategic pricing, marketing,
and sales and distribution initiatives,
including robust digital and customer
loyalty strategies.
• Brand and Guest experience: we define
and implement the desired guest
experience across each property and
support the operational teams in their
consistent delivery.
• Finance: PPHE’s finance department
provides comprehensive financial
management, including budgeting,
forecasting and financial reporting.
• People and Culture: we place a strong
emphasis on our people, fostering a
culture of excellence, diversity and
inclusion, which all translates into
exceptional guest experiences.
• Technology: we leverage cutting-edge
technology to enhance operational
efficiency and guest experience.
• Central Procurement: our team ensures
that all properties benefit from economies
of scale and the highest standards of
quality in goods and services.
• Day-to-Day Operations: PPHE’s operations
team ensures that each property runs
smoothly and efficiently, providing guests
with a seamless experience.
• Business Intelligence (BI) and Data
Management: we use advanced BI tools
and data management practices to inform
decision-making and optimise performance.
• ESG team, driving the sustainability
strategy and target setting for all
properties and the business overall.
Scalability and growth
PPHE’s operating platform is highly scalable,
allowing the Company to grow and adapt to
new opportunities. The platform’s flexibility
and the team’s vast experience enable PPHE
to take on new properties and ventures with
confidence. Contracts with property owners
typically include a base fee and an incentive
fee based on performance, aligning PPHE’s
interests with those of its clients.
Award-winning recognition
PPHE’s integrated operating platform
has garnered widespread recognition
and numerous awards. This acclaim is a
testament to the Company’s commitment
to excellence and innovation in hospitality
management. By maintaining full control
over its operations and continuously
striving for improvement, PPHE sets
a high standard for the industry.
A proven model with further scope
PPHE’s unique approach to hospitality
management, characterised by integrated
ownership, management and branding, sets
it apart from traditional models. This strategy
not only enhances operational efficiency
but also ensures that each property delivers
exceptional guest experiences. With a
scalable platform, a diverse portfolio
and a commitment to excellence, PPHE is
well positioned for continued growth and
success in the hospitality industry.
An overview of PPHE’s unique approach
Mastering hospitality with our integrated operating platform
Expert teams,
scalable platform
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PPHE Hotel Group
Annual Report and Accounts 2024
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Corporate Governance
Financial Statements
Appendices
PPHE Hotel Group
Annual Report and Accounts 2024
36
Property KPIs1
Average room rate* £
RevPAR* £
EPRA NRV per share* £
161.5
166.8
160.4
117.0
105.1
2024
2023
160.8
2024 (like-for-like)*
2022
2021
2020
120.3
120.7
96.2
35.9
29.4
2024
2023
122.0
2024 (like-for-like)*
2022
2021
2020
27.51
26.72
25.17
22.15
22.08
2024
2023
2022
2021
2020
KPI definition
Total room revenue divided by the number
of rooms sold.
KPI definition
Revenue per available room; total room revenue
divided by the number of available rooms.
KPI definition
Recognised equity, attributable to the parent
company’s shareholders on a fully diluted basis
adjusted to include properties and other investment
interests at fair value and to exclude certain items
not expected to crystallise in a long-term investment
property business model (deferred tax on timing
differences on property, plant and equipment and
intangible assets and financial instruments) divided
by the dilutive number of shares. Adjustments to
the recognised equity are calculated on the share
allocated to the parent company’s shareholders
(net of non-controlling interest).
Key performance indicators
Normalised profit before tax* £m
Reported basic earnings per share
pence
Guest rating score %
38.8
37.5
8.3
(47.5)
(89.8)
2024
2023
2022
2021
2020
67
53
24
(123)
(192)
2024
2023
2022
2021
2020
87.8
86.4
84.8
85.5
Data not indicative
2024
2023
2022
2021
2020
KPI definition
Profit before tax adjusted to remove exceptional
or one-time influences which are not part of the
Group’s regular operations.
KPI definition
Earnings for the year, divided by the weighted
average number of ordinary shares outstanding
for basic earnings per share during the year.
KPI definition
Guest satisfaction and a strong reputation are
vital to our long-term success. We measure these
through guest surveys and reviews completed
on major travel review websites and booking
platforms. The reported guest rating score is
based on guest reviews from external platforms,
reflecting our focus on delivering quality and
exceptional experiences.
Financial KPIs1
Operating KPIs1
Total revenue £m
EBITDA* £m
Occupancy %
442.8
414.6
330.1
141.4
101.8
2024
2023
428.3
2024 (like-for-like)*
2022
2021
2020
136.5
128.2
94.6
25.1
(10.1)
2024
2023
139.3
2024 (like-for-like)*
2022
2021
2020
74.5
72.4
60.0
30.7
28.0
2024
2023
75.8
2024 (like-for-like)*
2022
2021
2020
KPI definition
Total revenue includes all operating revenue
generated by the Group’s owned and leased
hotels, management fees, franchise fees and
marketing fees.
KPI definition
Earnings before interest* (Financial income and
expenses), tax, depreciation and amortisation,
impairment loss, share in results of joint ventures
and exceptional items presented as other income
and expense.
KPI definition
Total rooms occupied divided by the available rooms.
Employee engagement %
Adjusted EPRA EPS* pence
84.5
83.0
81.0*
Trial of new survey format
Data not indicative
2024
2023
2022
2021
2020
125
118
50
(44)
(123)
2024
2023
2022
2021
2020
KPI definition
Previously measured through annual engagement
surveys, in which team members were encouraged
to share feedback about the Company, their jobs,
their team and their manager. Notwithstanding
the high scores achieved, we have changed our
measurements to be more regular and topical in
the form of engagement surveys.
* Up until 2019, the Group measured employee
satisfaction through annual surveys. Post
pandemic, it has implemented a new methodology
which captures employee engagement. As a result,
from 2022 onwards, the performance shown is not
comparable with earlier years.
KPI definition
Shareholders’ earnings from operational activities
with the Company’s specific adjustments. The main
adjustment is adding back the reported depreciation
charge, which is based on assets at historical cost
and replacing it with a charge calculated as 4% of
the Group’s total revenues, which represents the
Group’s expected average cost to upkeep the real
estate in good quality. The adjusted shareholders’
earnings from operational activities are divided by
the weighted average number of ordinary shares
outstanding during the year.
1 Further details on the key financial, operating and property KPIs can be found in the Financial Review on pages 40 to 48.
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
38
39
Strategic Report
Corporate Governance
Financial Statements
Appendices
Financial Review
Solid topline growth with EBITDA margin* improvement
“Despite operating in a highly inflationary environment,
the Group’s strong focus on cost control enabled us
to achieve EBITDA margin* growth.”
Daniel Kos
Chief Financial Officer & Executive Director
Overview of 2024
In 2024, the Group achieved a solid financial
performance on a like-for-like* basis, with
noteworthy revenue growth primarily driven
by increased occupancy throughout the
year, although room rates were marginally
lower following significant increases in
previous years. EBITDA* and EBITDA margin*
growth were realised despite facing
inflationary pressures, particularly
concerning labour costs.
The Group sustained a stringent focus on
cost control during the year, coupled with
ongoing efficiency measures to support the
like-for-like* margin growth, which increased
by 160 basis points from 30.9% in the
previous year to 32.5% in the current year.
In the second half of the year, the Group
refinanced an existing loan facility related to
six Dutch hotels and one in London, originally
set to mature in June 2026. The new facility,
maturing in June 2031, comprises two
tranches: the first tranche, amounting to
€160 million for the Dutch hotels, carries an
all-in fixed interest rate of 2.765% until June
2026, rising to 4.49% thereafter until
maturity. The second tranche pertains
to Holmes Hotel London and has a fixed
interest rate of 3.9% until 2026, followed by a
competitive floating interest rate. During this
refinancing process, independent valuations
commissioned by the bank confirmed the
value included in the Group’s EPRA NRV*,
which stands at £1,163.3 million at year-end.
The Group is currently nearing the
completion of an extensive development
cycle. Throughout the year, several new
hotels within the Group’s £300 million+
development pipeline became fully
operational. These openings initially had
a negative impact on the Group’s results,
characteristic of the pre-opening phase,
but, upon stabilisation, these openings
are projected to increase EBITDA* by at
least £25 million.
Financial results
Key financial statistics for the financial year ended 31 December 2024.
Reported
Like-for-like*1
Year ended
31 December
2024
Year ended
31 December
2023
%
change2
Year ended
31 December
2024
Year ended
31 December
2023
%
change2
Occupancy3
74.5%
72.4%
215 bps
75.8%
72.4%
350 bps
Average room rate3*
£161.5
£166.8
(3.2)%
£160.8
£166.8
(3.6)%
RevPAR3*
£120.3
£120.7
(0.3)%
£122.0
£120.7
1.0%
Total revenue
£442.8 million
£414.6 million
6.8%
£428.3 million
£414.6 million
3.3%
Total room revenue3
£317.2 million
£300.1 million
5.7%
£306.4 million
£300.1 million
2.1%
EBITDA*
£136.5 million
£128.2 million
6.5%
£139.3 million
£128.2 million
8.7%
EBITDA margin*
30.8%
30.9%
(10) bps
32.5%
30.9%
160 bps
Adjusted EPRA EPS*
125p
118p
5.9%
n/a
n/a
n/a
EPRA NRV per share*
£27.5
£26.7
3.0%
n/a
n/a
n/a
Reported PBT
£30.6 million
£28.8 million
6.2%
n/a
n/a
n/a
Normalised PBT*
£38.8 million
£37.5 million
3.6%
n/a
n/a
n/a
Reported basic EPS
67p
53p
26.8%
n/a
n/a
n/a
Reported diluted EPS
66p
53p
26.0%
n/a
n/a
n/a
1. The like-for-like* figures exclude the 2024 results of art’otel London Hoxton and the results of art’otel Zagreb for the first ten months of 2024.
2. Percentage change figures are calculated from actual figures as opposed to the rounded figures included in the above table.
3. The room revenue, average room rate*, occupancy and RevPAR* statistics include all accommodation units at hotels and self-catering apartment complexes and exclude
campsites and mobile homes.
Revenue
Like-for-like* total revenue, which excludes
the impact of art’otel London Hoxton and
art’otel Zagreb, rose 3.3% to £428.3 million.
Reported total revenue was up 6.8% to
£442.8 million.
2024 RevPAR* was £120.3, a decrease of 0.3%.
This reflected good growth in occupancy,
which rose to 74.5% against a strong 2023
comparative, and an anticipated reduction
in average room rate* to £161.5 due to the
evolving composition of the Group’s booking
mix, namely the increasing proportion of
business and meetings and events bookings.
EBITDA*, profit and earnings per share
The Group reported like-for-like* EBITDA*
of £139.3 million for 2024, compared with
£128.2 million in the previous year. The
like-for-like* margin showed a year-on-year
improvement to 32.5%, up from 30.9% in
2023. This growth was achieved despite
double-digit percentage increases in
minimum wage across the portfolio. The
Group focused on enhancing efficiencies
within back-office functions through
automation and increasing productivity
levels. Additionally, the Group benefited
from lower utility costs per occupied
room, primarily due to favourable
hedged utility prices.
Reported basic earnings per share for
the period were 67 pence, compared
with 53 pence in 2023. Depreciation for
the year amounted to £47.1 million (2023:
£45.1 million). While depreciation is recorded
in accordance with IFRS, internally, we
consider the ongoing average CAPEX over
the lifespan of our hotels as a more pertinent
measure for determining profit. In the
hospitality industry, this is approximately
4% of total revenue. Our EPRA earnings* are
calculated using this 4% rate instead of the
reported non-cash depreciation charge
(refer to the EPRA earnings* table on page 44).
Normalised profit before tax* improved
to £38.8 million, compared with £37.5 million
in 2023. Reported profit before tax
increased by £1.8 million to £30.6 million
(2023: £28.8 million). Further details can be
found in the normalisation adjustments
table on page 42.
Cash flow and EPRA earnings*
In 2024, as outlined in the year-on-year
graph below, the Group had a positive
operational cash flow of £124.3 million.
Debt service costs increased to
£95.2 million (2023: £82.2 million),
mainly due to net interest expenses
(£49.9 million), loan amortisations
(£41.1 million) and lease amortisations
(£4.2 million). This rise was driven by the
opening of art’otel London Hoxton.
Investment cash flows reported an
outflow of £79.3 million, with around
70% due to development projects and
£16.0 million dedicated to maintenance
CAPEX* projects. With the current £300m+
investment pipeline nearing completion,
construction CAPEX is expected to drop
significantly in 2025.
The Group reported adjusted EPRA earnings*
of £53.2 million, up 6.4% (2023: £50.1 million),
with adjusted EPRA earnings per share* of
125 pence, up 5.9% (2023: 118 pence).
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
40
41
Strategic Report
Corporate Governance
Financial Statements
Appendices
Year-on-year cash flow
150.4
124.3
(79.3)
(95.2)
42.6
(25.0)
(4.6)
113.2
Reported
Cash 31.12.23
Operating Cash
flow (EBITDA*
and working
capital)
Investment
in properties
and Buy-back of
income units in
ParkPlaze London
Westminster
Bridge1
Debt Service2
New Facilities and
movement in
restricted cash
Dividend and
share buy back
Other
financing
items
(including FX)
Reported Cash
31.12.24
Increase
Decrease
Total
1. £16.0 million reflects regular CAPEX.
2. Including leases and unit holders in Park Plaza London Westminster Bridge.
Normalised profit before tax*
£million
12 months
ended
31 December
2024
12 months
ended
31 December
2023
Reported profit before tax
30.6
28.8
Loss on buy-back of units in Park Plaza London Westminster Bridge from private investors
1.5
3.3
Non-cash re-measurement of lease liability
4.0
3.9
Refinance expenses
2.6
–
Non-cash changes in fair value of Park Plaza County Hall London Income Units
(0.5)
(1.6)
Pre-opening expenses and other non-recurring expenses
3.9
1.4
Capital loss on disposal of fixed assets and inventory
0.2
–
Non-cash changes in fair value of financial instruments
(3.5)
1.7
Normalised profit before tax*
38.8
37.5
Real estate performance
Valuations
The Group is an integrated developer, owner and operator of hotels, resorts and campsites, with a business model centred on real estate.
We generate returns and enhance value for all stakeholders by developing our owned assets and optimising the operation of our properties.
Certain EPRA performance measures are disclosed to assist investors in analysing the Group’s performance and assessing the value of its
assets and earnings from a property perspective.
In December 2024, the Group’s properties (excluding operating leases and managed and franchised properties) were independently valued
primarily by Savills for properties in the Netherlands, UK and Germany, and by Zagreb Nekretnine Ltd (Zane) for properties in Croatia.
Based on these valuations, we have calculated the Group’s EPRA NRV*, EPRA NTA* and EPRA NDV*. As of 31 December 2024, the EPRA NRV*,
as detailed in the EPRA performance measurement section on page 43, amounts to £1,163.3 million (2023: £1,136.4 million), equating to
£27.51 per share (2023: £26.72 per share).
The EPRA NRV* was positively impacted by the £28.2 million profit for the year, as well as a £41.0 million increase in property valuations
(on a constant currency basis). However, this was offset by a £23.4 million reduction due to dividend distributions and share buybacks,
along with a £20.0 million decline resulting from unfavourable foreign currency translation to the British Pound.
The table below provides additional information regarding the discount and cap rates used.
Actualised trading versus assumption in 2024 valuations
Discount rates
Cap rates
2024
Valuations
2023
Valuations
2024
Valuations
2023
Valuations
United Kingdom
7.75%–10.50%
7.75%–10.50%
5.25%–8.00%
5.25%–8.00%
The Netherlands
8.00%–10.00%
8.25%–9.75%
5.50%–7.50%
5.75%–7.25%
Germany
8.25%–9.25%
8.25%–9.25%
5.75%–6.75%
5.75%–6.75%
Croatia
8.00%–11.00%
8.00%–11.00%
6.00%–9.00%
6.00%–9.00%
Valuation comparison
2024 versus 2023 valuation – total portfolio +1.7%
United Kingdom
3.4%
The Netherlands
0.3%
Germany
(7.2)%
Croatia
(2.8)%
EPRA performance measurement
EPRA summary
Summary of EPRA performance indicators
Year ended 31 December 2024
Year ended 31 December 2023
£ million
Per share
£ million
Per share
EPRA NRV (Net Reinstatement Value)*
1,163.3
£27.51
1,136.4
£26.72
EPRA NTA (Net Tangible Assets)*
1,134.1
£26.82
1,106.6
£26.02
EPRA NDV (Net Disposal Value)*
1,101.3
£26.05
1,070.4
£25.17
EPRA earnings*
60.7
143p
59.0
139p
Adjusted EPRA earnings*
53.2
125p
50.1
118p
EPRA NRV*
31 December 2024
31 December 2023
£ million
EPRA NRV*
EPRA NTA*4
EPRA NDV *
EPRA NRV*
EPRA NTA*4
EPRA NDV*
NAV per the financial statements
312.7
312.7
312.7
314.6
314.6
314.6
Effect of exercise of options
0.5
0.5
0.5
–
–
–
Diluted NAV, after the exercise of options1
313.2
313.2
313.2
314.6
314.6
314.6
Includes:
Revaluation of owned properties in operation
(net of non-controlling interest)2
824.5
824.5
824.5
794.6
794.6
794.6
Revaluation of the joint venture interest
held in two German properties
(net of non-controlling interest)2
6.3
6.3
6.3
6.1
6.1
6.1
Fair value of fixed interest rate debt
–
–
(6.8)
–
–
(5.9)
Deferred tax on revaluation of properties
–
–
(35.9)
–
–
(39.0)
Real estate transfer tax3
21.6
–
–
19.1
–
–
Excludes:
Fair value of financial instruments
18.3
18.3
–
14.2
14.2
–
Deferred tax
(16.0)
(16.0)
–
(16.2)
(16.2)
–
Intangibles as per the IFRS balance sheet
–
7.6
–
–
10.7
–
NAV
1,163.3
1,134.1
1,101.3
1,136.4
1,106.6
1,070.4
Fully diluted number of shares (in thousands)1
42,288
42,288
42,288
42,527
42,527
42,527
NAV per share (in £)
27.51
26.82
26.05
26.72
26.02
25.17
1 The fully diluted number of shares excludes treasury shares but includes 498,248 outstanding dilutive options (as at 31 December 2023: 163,221).
2 The fair values of the properties were determined on the basis of independent external valuations prepared in December 2024.
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.
Financial Review – continued
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Corporate Governance
Financial Statements
Appendices
EPRA earnings*
12 months
ended
31 December
2024
£ million
12 months
ended
31 December
2023
£ million
Earnings attributed to equity holders of the parent company
28.2
22.4
Reported depreciation and amortisation
47.1
45.1
Revaluation of Park Plaza County Hall London Income Units
(0.5)
(1.6)
Changes in fair value of financial instruments
(3.5)
1.7
Non-controlling interests in respect of the above3
(10.6)
(8.6)
EPRA earnings*
60.7
59.0
Weighted average number of ordinary shares outstanding (in thousands)
42,482
42,541
EPRA earnings per share (in pence)*
143
139
Company specific adjustments:1
Capital loss on buy-back of Income Units in Park Plaza London Westminster Bridge
1.5
3.3
Remeasurement of lease liability4
4.0
3.9
Disposals and other non-recurring expenses (including pre-opening expenses)7
4.1
1.4
Refinance expenses
2.6
–
Adjustment of lease payments5
(2.6)
(2.3)
One-off tax adjustments6
(1.7)
(2.5)
Maintenance CAPEX*2
(17.7)
(16.6)
Non-controlling interests in respect of maintenance CAPEX* and the adjustments above3
2.3
3.9
Company adjusted EPRA earnings*
53.2
50.1
Company adjusted EPRA earnings per share* (in pence)
125
118
Reconciliation Company adjusted EPRA earnings* to normalised PBT*:
Company adjusted EPRA earnings*
53.2
50.1
Reported depreciation and amortisation
(47.1)
(45.1)
Non-controlling interest in respect of reported depreciation3
10.6
8.6
Maintenance CAPEX*2
17.7
16.6
Non-controlling interests in respect of maintenance CAPEX* and the adjustments above3
(2.3)
(3.9)
Adjustment of lease payments5
2.6
2.3
One-off tax adjustments6
1.7
2.5
Profit attributable to non-controlling interests3
(0.5)
4.7
Reported tax
2.9
1.7
Normalised profit before tax*
38.8
37.5
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.
3 Non-controlling interests include the non-controlling shareholders in Arena, third party investors in Income Units of Park Plaza London Westminster Bridge and the
non-controlling shareholders in the partnership with Clal that was entered into in June 2021 and March 2023.
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 Mainly relates to deferred tax asset on carry forward losses recorded in 2023 and 2024
7 Mainly relates to pre-opening expense and net profit and loss on disposal of property, plant and equipment.
Category
Year ended
31 December
2024
£ million
Group1
Year ended
31 December
2023
£ million
Group1
Acquisitions
–
–
Development
53.3
107.2
Investment properties
16.0
15.0
Incremental lettable space
–
–
No incremental lettable space
16.0
15.0
Tenant incentives
–
–
Other material non-allocated types of expenditure
–
–
Capitalised interest
1.9
3.4
Total CAPEX
71.2
125.6
Conversion from accrual to cash basis
2.9
(10.5)
Total CAPEX on cash basis
74.1
115.1
1. Proportionate consolidation was not applied to the joint ventures as it is considered as not material.
Other EPRA measurements
Given that the Group’s asset portfolio comprises 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
not relevant or non-existent. Those EPRA performance measurements include EPRA Net Initial Yield (NIY), EPRA ‘Topped-up’ NIY, EPRA Vacancy
Rate and EPRA Cost Ratios.
Financial Review – continued
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Annual Report and Accounts 2024
Annual Report and Accounts 2024
44
45
Strategic Report
Corporate Governance
Financial Statements
Appendices
0
50
100
150
200
250
300
350
Debt maturity schedule (£ in millions)
Regular amortisation
GBP facility
EUR facility
n/a
n/a
4.2%
35%
3.8%
33%
2.3%
28%
3.2%
39%
3.8%
37%
Avg. Rate
Avg. LTV*
2029
2030+
2028
2027
2026
2025
Avg. Rate / Avg. LTV*
£12
£12
£16
£19
£26
£9
£170
£155
£172
£4
£35
£182
£21
£37
£18
% Net debt* leverage
Net debt* leverage
Equity
Shareholders
£1,163m
Equity
minority
£351m
Net bank debt
£750m
Net assets
£2,264m*
£591m
GBP
£297m
Euro
Average interest
3.8% fixed rate
Average maturity
4.0 years
Gross debt composition and metrics
Capital structure
Call impact minorities and future
As part of our strategy, we unlock
capital from our assets through various
methods. This includes raising debt,
securing equity via multiple partnership
forms, or sometimes entering into ground
rent structures exceeding 100 years. This
funding approach allows us to leverage the
fair value of our assets, while balancing
liquidity and interest rate risk within our
capital structure.
Our partnerships, including third party unit
holders in Park Plaza London Westminster
Bridge, shareholders in our listed Croatian
subsidiary, and individual professional
partners across several assets, provide
long-term equity, thereby sharing the risks
and returns on each asset.
The 100+ year ground rent structures offer
long-term access to capital without covenants,
recourse to the Group, refinance risk, or
interest rate exposure. These arrangements
are typically linked to inflation, often capped
at approximately 4–5% annually.
Furthermore, our asset-backed mortgages
are mainly established with long-standing
banking partners, featuring five to ten-year
maturities and either fixed or variable
rates with hedging arrangements. These
mortgages include covenants relating to
asset value (loan-to-value*, or LTV*) and
trading performance (interest or debt
service coverage ratios)*. The debt raised on
trading assets generally represents about
50% of their value, with appropriate buffers
maintained towards loan covenants.
Additionally, most loans are amortised
annually at around 2.5% of the nominal
amount over the term. The current net
bank debt leverage (EPRA LTV*) percentage
stands at 33.5%.
Although our mortgages involve interest rate
risks, the majority were secured years ago,
averaging at 3.8% interest (96% fixed), with an
average remaining maturity of 4.0 years.
* Includes assets at market value, with ground rent
liabilities included in the asset valuation. Units in Park
Plaza London Westminster Bridge owned by private
investors are netted of with the unitholder liability.
Net debt* leverage/EPRA LTV* reconciliation
Group as
reported
under IFRS
£ million
Adjustments to
arrive at EPRA
Group LTV*
£ million
Group EPRA
LTV* before
non-controlling
interest
adjustment
£ million
Proportionate
consolidation
(non-controlling
interest)
£ million
Combined
EPRA LTV*
£ million
Include:
Borrowings (short-/long-term)
885.6
–
885.6
(205.0)
680.6
Exclude:
Cash and cash equivalents and restricted cash
(135.6)
–
(135.6)
28.7
(106.9)
Net debt* (a)
750.0
–
750.0
(176.3)
573.7
Include:
Property, plant and equipment
1,421.4
791.7
2,213.1
(521.3)
1,691.8
Right-of-use assets
225.3
(225.3)
–
–
–
Lease liabilities
(281.9)
281.9
–
–
–
Liability to Income Units at Park Plaza London Westminster Bridge
(110.6)
110.6
–
–
–
Intangible assets
7.6
–
7.6
(0.7)
6.9
Investments in joint ventures1
8.2
11.8
20.0
(9.0)
11.0
Other assets and liabilities, net
6.1
(9.1)
(3.0)
8.2
5.2
Total property value (b)
1,276.1
961.6
2,237.7
(522.8)
1,714.9
EPRA LTV* (a/b)
58.8%
33.5%
33.5%
Adjustments to reported EPRA NRV*:
Real estate transfer tax
–
26.6
26.6
(5.0)
21.6
Effect of exercise of options
–
0.5
0.5
–
0.5
Total property value after adjustments (c)
1,276.1
988.7
2,264.8
(527.8)
1,737.0
Total equity (c-a)
526.1
988.7
1,514.8
(351.5)
1,163.3
1 Proportionate consolidation was not applied to the joint ventures as it is considered as not material.
Financial Review – continued
PPHE Hotel Group
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Annual Report and Accounts 2024
Annual Report and Accounts 2024
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47
Strategic Report
Corporate Governance
Financial Statements
Appendices
£0m
£50m
£100m
£150m
£200m
£250m
Substantial expansion CAPEX fuelling growth over the last decade and years to come
2014
2015
10.2
16.0
15.0
9.8
6.6
14.9
19.2
21.1
14.1
12.2
8.8
23.0
55.2
110.6
85.0
99.1
85.2
62.2
115.5
97.1
215.4
65.6
2024
2023
2022
2021
2020
2019
2018
2017
2016
Maintenance CAPEX*
Expansion CAPEX*
EBITDA*
Capital expenditure/development
pipeline update
With an expansion CAPEX of £55.2 million,
we have remained committed to executing
our strategy, advancing our development
pipeline, and extending our presence into
new and highly attractive markets.
The construction phase of our new hotel in
Hoxton London (art’otel London Hoxton) was
fully completed in December 2024, following
a phased opening that began in April 2024.
Our first art’otel in Croatia, art’otel Zagreb,
was fully operational by May 2024 after a
phased opening that started in Q3 2023.
This was an office-to-hotel conversion
project located in the centre of Zagreb,
with a total investment of £19 million.
Similarly, Radisson RED Belgrade, the first
Radisson RED property to be operated
by the Group and the second under the
extended Radisson partnership, opened
in February 2024 following extensive
repositioning efforts.
In Rome, the full repositioning and
construction of art’otel Rome Piazza
Sallustio, formerly the Londra & Cargill
Hotel, which began in July 2022, is
progressing well and is expected
to open in early March 2025.
The Group has a remaining commitment
of approximately £13 million for its
investment pipeline.
We are continuously striving to enhance our
existing portfolio and seek out promising
opportunities to acquire additional assets to
expand the Group’s holdings. The diagram
above summarises our investments over the
past decade, with the capital expenditures of
the last three years attributable to recent
openings expected to deliver EBITDA* growth
of at least £25 million.
Dividend
The Board proposes increasing the final
dividend to 21 pence per share (2023: 20
pence). Combined with the interim dividend
of 17 pence, the total for the financial year
will be 38 pence per share, a 5.6% increase
from 2023.
Pending approval at the 2025 Annual
General Meeting, the final dividend will
be paid on 30 May 2025 to all shareholders
who are on the register as of 25 April 2025.
This follows the Company’s policy of
distributing around 30% of adjusted EPRA
earnings*, supporting both returns and
future growth investments.
Daniel Kos
Chief Financial Officer & Executive Director
Recent opening expected to
achieve + £25m EBITDA*
Financial Review – continued
We were pleased to report revenue growth across all
our operating regions, and we expect this to continue in 2025
as our newly opened hotels will continue to stabilise.
Business Review
United Kingdom
The Netherlands
Croatia
Germany
Value of property portfolio
£1,328m
£319m
£351m
£85m
Total revenue
£249m
£66m
£84m
£24m
PPHE Hotel Group
Annual Report and Accounts 2024
Strategic Report
Corporate Governance
Financial Statements
Appendices
49
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Annual Report and Accounts 2024
48
Annual Report and Accounts 2024
PPHE Hotel Group
49
U
N
L
O
C
K I
N
G
G
R
O
W
T
H
I N
L O
N
D
O
N
–
U
N I
T
E
D
K I
N
G
D
O
M
Austria
Italy
Croatia
Serbia
Hungary
Netherlands
Germany
United Kingdom
art’otel London Battersea
Power Station
Park Plaza London
Riverbank
2
B R I X T O N
S T R E AT H A M
C R OY D O N
WA LW O R T H
N O T T I N G H I L L
W E S T M I N S T E R
S O H O
S H O R E D I T C H
B E R M O N D S E Y
C A N A RY
W H A R F
C A M D E N T O W N
I S L I N G T O N
W E M B L E Y
S H E P H E R D ’ S
B U S H
F U L H A M
B AT T E R S E A
M A RY L E B O N E
1
4
1
1
1
2
Business Review – continued
Property portfolio
The Group operates over 3,700 rooms in the
upper upscale segment of the London hotel
market. This well-invested property
portfolio has been further enhanced with
the addition of 357 rooms following the
opening of art’otel London Hoxton in 2024.
Four of these hotels are located in London’s
popular South Bank area, with further
properties in Hoxton, Victoria, Marylebone,
Battersea and Park Royal. Three of the
Group’s properties are in the UK regional
cities of Nottingham, Leeds and Cardiff.
The Group has an ownership interest in ten
properties: Park Plaza London Westminster
Bridge, Park Plaza London Riverbank, Park
Plaza London Waterloo, Park Plaza County
Hall London4, Park Plaza Victoria London,
Park Plaza London Park Royal, art’otel
London Hoxton, Holmes Hotel London, Park
Plaza Leeds and Park Plaza Nottingham.
Park Plaza Cardiff4 operates under a
franchise agreement. The Group operates
art’otel London Battersea Power Station 3
hotel under a long-term management
agreement through its hospitality platform.
The Group also has three development sites
in London, which are expected to add more
than 800 rooms to its UK portfolio.
art’otel London Hoxton
Following its phased soft opening in
April 2024, this brand new flagship hotel
in the heart of Hoxton has gone
from strength to strength.
visit artotellondonhoxton.com
Unlocking growth in the United Kingdom
Financial performance
Reported in Pound Sterling (£)
Like-for-like*1 Pound Sterling (£)
UK
Year ended
31 Dec
2024
Year ended
31 Dec 2023
% change4
Year ended
31 Dec
2024
Year ended
31 Dec
2023
% change4
Total revenue
£248.6m
£234.9m
5.8%
£237.6m
£234.9m
1.1%
Room revenue
£192.2m
£183.8m
4.6%
£183.4m
£183.8m
(0.2)%
EBITDA*
£77.4m
£76.3m
1.4%
£79.9 m
£76.3m
4.8%
EBITDA margin*
31.1%
32.5%
(135) bps
33.6%
32.5%
120 bps
Occupancy
83.0%
83.6%
(60) bps
85.8%
83.6%
210 bps
Average room rate*
£186.0
£190.8
(2.5)%
£185.2
£190.8
(3.0)%
RevPAR*
£154.4
£159.6
(3.3)%
£158.8
£159.6
(0.5)%
1 The like-for-like* figures for the year ended 31 December 2024 exclude the results of art’otel London Hoxton.
2 Independent valuation by Savills in December 2024, excluding the London development at Westminster Bridge Road.
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.
4 Percentage change figures are calculated from actual figures as opposed to the rounded figures included in the above table.
Total value of the
UK property portfolio2
£1,328m
(2023: £1,014m)
Room count
4,200+
Number of employees
across the UK
2,900
Diverse clientele with
increasing business and
conference guest occupancy
Park Plaza London
Park Royal
Adjacent to the
Park Plaza London
Park Royal we have
a development site
with planning
Holmes Hotel London
art’otel London Hoxton
“The UK continues to be a cornerstone of our growth
strategy. Its dynamic hospitality market and enduring
appeal to both leisure and business travellers present
exceptional opportunities for our premium brands.”
Park Plaza Victoria London
At Park Plaza Victoria London we have
a development project with planning
Park Plaza County Hall London
Park Plaza London Waterloo
Park Plaza London Westminster Bridge
Westminster Bridge Road
(development site, with planning)
PPHE Hotel Group
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Annual Report and Accounts 2024
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Corporate Governance
Financial Statements
Appendices
Business Review – continued
Unlocking growth in the United Kingdom – continued
Portfolio performance
The United Kingdom remains the Group’s
most significant operating region in terms
of revenue generated and the value of its
property portfolio.
The solid like-for-like* performance was
characterised by growth in occupancy
throughout the year as the business mix
normalised, with increasing demand from
corporates, groups and meetings and
events alongside the leisure segment.
As anticipated, average room rates*
stabilised compared with the strong
performance in the prior year,
which included the Coronation of His
Majesty King Charles III in May 2023.
(on a scale of 1-5) and ranked in 52nd
position on Tripadvisor.com (out of 1,160
hotels in London). In 2025, we look forward
to launching the premium suites, the office
spaces and the 25th floor restaurant
and bar.
On a like-for-like* basis, total revenue
increased by 1.1% to £237.6 million
(2023: £234.9 million). This was driven by an
improvement in occupancy from 83.6% to
85.8%, a slightly lower average room rate*
at £185.2 (2023: £190.8), which resulted in
RevPAR* of £158.8, down 0.5% (2023: £159.6).
Like-for-like* EBITDA* increased to
£79.9 million (2023: £76.3 million), delivering
a like-for-like* EBITDA margin* of 33.6%
(2023: 32.5%).
April 2024 saw the phased soft opening of the Group’s highly anticipated
flagship art’otel London Hoxton
art’otel London Battersea Power Station
2024 marked the first full year of
operation for the iconic art’otel
London Battersea Power Station.
The hotel has progressed well, tracking
the overall growth of the wider
Battersea Power Station development
scheme which saw further developments
complete and units occupied.
visit artotellondonbattersea.com
April 2024 saw the phased soft opening
of the Group’s highly anticipated flagship
art’otel London Hoxton, with an inventory
of approximately 100 rooms, a ground floor
restaurant, a bar, spa and pool, gallery and
auditorium. Works continued throughout
2024 and, by the end of the year, the gym
on the 26th floor, the meetings and events
spaces on the 24th floor and the vast
majority of the 357 guestrooms (with the
exception of some of the premium suites)
had all been completed. The hotel has been
very well received by guests and in the
wider London market, with excellent guest
feedback and reviews, recognised with a
9.3 score on Booking.com (on a scale of 1-10),
rated a 5-star score on Tripadvisor.com
Reported revenue was £248.6 million, up
5.8%, adversely affected by the gradual
opening of art’otel London Hoxton.
Reported RevPAR* was £154.4 (2023: £159.6),
which was the result of an occupancy
of 83.0% (2023: 83.6%) and an average
room rate* of £186.0 (2023: £190.8).
Reported EBITDA* was £77.4 million
(2023: £76.3 million), delivering an EBITDA
margin* of 31.1% (2023: 32.5%).
In 2025, the Company will continue to focus
on driving further efficiencies, particularly to
help mitigate the cost pressures as a direct
result of the increases in the national minimum
wage and national insurance contributions.
Development projects
The Group continues to identify and assess
opportunities to replenish its development
pipeline1 in the UK. It has three longer-term
development projects in London with
planning consent.
The Group’s site at 79–87 Westminster
Bridge Road in the South Bank area, close to
the Group’s Park Plaza London Waterloo and
Westminster Bridge properties, has been
granted planning permission for a mixed-use
hotel led development. Under the approved
plans, PPHE will bring a novel 15-storey
design led midscale concept to the market,
comprising up to 186 rooms as well as two
floors of office and light industrial floorspace,
activated by a flexible use ground floor public
space featuring an all-day dining bar and
café. The building’s design will focus heavily
on sustainability, transforming a former
brownfield site, and targeting a Building
Research Establishment Environmental
Assessment Methodology (BREEAM)
‘Excellent’ environmental accreditation.
At a site adjacent to Park Plaza London Park
Royal (in West London), planning has been
granted for a 465-room hotel.
In Victoria, the Group has planning consent
to create an additional 179-rooms at Park
Plaza Victoria London in predominantly
subterranean space. The Group is
currently assessing various options for
best use of space, with value creation
as guiding principle.
The United Kingdom hotel market*
RevPAR* was up 2.6%, at £94.5, driven by
a 1.9% increase in average room rate* to
£121.7 and a 0.6% increase in occupancy
to 77.6%.
In London, RevPAR* increased by 1.4% to
£157.9 compared with 2023, reflecting a 1.5%
increase in occupancy to 81.0%, and a 0.1%
decrease in average room rate* to £194.9.
* Source: STR European Hotel Review, December 2024
Reported revenue was
£248.6 million, up by 5.8%
year-on-year
PPHE Hotel Group
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DRENTHE
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Italy
Croatia
Serbia
Hungary
Netherlands
Germany
United Kingdom
U T R E C H T
A M S T E R DA M
F L E VO L A N D
G E L D E R L A N D
OV E R U S S E L
R OT T E R DA M
N O R T H
H O L L A N D
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B E LG I U M
G E R M A N Y
Business Review – continued
Property portfolio
The Group has an ownership interest in
three hotels in the centre of Amsterdam
(Park Plaza Victoria Amsterdam, art’otel
Amsterdam and Park Plaza Vondelpark,
Amsterdam), and a fourth property
located near Schiphol Airport (Park Plaza
Amsterdam Airport). It also owns Park Plaza
branded hotels in Utrecht and Eindhoven.
Portfolio performance
The Group’s properties in the Netherlands
continued to perform well throughout the
year, with improving occupancy driving
the performance while maintaining average
room rate*.
Total revenue (in local currency) increased
by 7.7% to €78.4 million (2023: €72.8 million),
which reflected the solid improvement
in occupancy to 86.5% (2023: 82.4%).
The average room rate* was stable at
€171.2 (2023: €171.6). This resulted in an 4.7%
increase in RevPAR* to €148.0 (2023: €141.4).
EBITDA* improved by €3.7 million to €26.2 million
(2023: €22.5 million), delivering an EBITDA
margin* of 33.4% (2023: 30.9%).
art’otel Amsterdam
art’otel Amsterdam served as the
blueprint for the new generation
art’otels which the Group has
developed, and the wider brand
portfolio now includes key capital cities
such as London, Rome and Zagreb.
visit artotelamsterdam.com
Unlocking growth in the Netherlands
The Dutch hotel market*
RevPAR* decreased by 0.4% to €108.0
compared with 2023.
Occupancy increased by 1.5% to 72.7%, and
the average room rate* was €148.7, 1.8%
lower than in 2023.
In Amsterdam, our main market in the
Netherlands, RevPAR* decreased by 2.3%
to €131.0.
Occupancy levels increased by 0.6% to
75.7%, and the average daily room rate
decreased by 3.0% to €173.1.
* Source: STR European Hotel Review, December 2024.
Financial performance
Reported in Pound Sterling (£)
Reported in local currency euro1 (€)
The Netherlands
Year ended
31 Dec
2024
Year ended
31 Dec
2023
% change3
Year ended
31 Dec
2024
Year ended
31 Dec
2023
% change3
Total revenue
£66.2m
£63.3m
4.6%
€78.4m
€72.8m
7.7%
Room revenue
£49.1m
£48.1m
2.0%
€58.1m
€55.4m
5.0%
EBITDA*
£22.1m
£19.6m
13.0%
€26.2m
€22.5m
16.3%
EBITDA margin*
33.4%
30.9%
250 bps
33.4%
30.9%
250 bps
Occupancy
86.5%
82.4%
410 bps
86.5%
82.4%
410 bps
Average room rate*
£144.5
£149.1
(3.1)%
€171.2
€171.6
(0.2)%
RevPAR*
£124.9
£122.8
1.7%
€148.0
€141.4
4.7%
1 Average exchange rate from euro to GBP for the period ended 31 December 2024 was 1.185 and for the period ended 31 December 2023 was 1.151, representing
a 2.9% increase.
2 Independent valuation by Savills in December 2024.
3 Percentage change figures are calculated from actual figures as opposed to the rounded figures included in the above table.
Total value of the Netherlands
property portfolio2
£319m
(2023: £318m)
Room count
1,000+
Number of employees
across the Netherlands
450
The Group’s properties in the
Netherlands continued to perform
well throughout the year
“The Netherlands, and Amsterdam in particular,
continues to be an important part of our portfolio.’’
Park Plaza
Amsterdam
Airport
Park Plaza Utrecht
Park Plaza Eindhoven
Park Plaza Vondelpark,
Amsterdam
art’otel Amsterdam
Park Plaza Victoria Amsterdam
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P U L A
Š I ŠA N
M E D U L I N
P O M E R
B A N J O L E
P J E Š ČA N A U VA L A
A D R I AT I C S E A
P R E M AT U R A
JA D R E Š K I
2
2
2
3
Business Review – continued
Property portfolio
The Group’s subsidiary Arena Hospitality
Group d.d. owns and operates a Croatian
portfolio comprising nearly 8,500 rooms and
accommodation units across eight hotels, six
resorts and eight campsites (including one
all-glamping property). Four of these properties
are Park Plaza branded, one property is art’otel
branded, and Grand Hotel Brioni Pula is a
Radisson Collection hotel. The remainder of our
portfolio operates as part of the Arena Hotels
& Apartments and Arena Campsites brands.
Except for art’otel Zagreb, the Group’s first
art’otel in Croatia, which opened in Q4 2023, all
properties are located in Istria – Croatia’s most
prominent tourist region, which benefits from
easy access from Italy, the DACH countries and
Central and Eastern Europe.
Unlocking growth in Croatia
Financial performance
Reported in Pound Sterling (£)
Reported in local currency euro2 (€)
Croatia
Year ended
31 Dec
2024
Year ended
31 Dec
2023
% change5
Year ended
31 Dec
2024
Year ended
31 Dec
2023
% change5
Total revenue
£84.1m
£78.1m
7.6%
€99.6m
€89.9m
10.8%
Room revenue*4
£46.6m
£42.6m
9.5%
€55.2m
€49.0m
12.7%
EBITDA*
£21.5m
£20.4m
5.2%
€25.4m
€23.5m
8.3%
EBITDA margin*
25.6%
26.1%
(60) bps
25.6%
26.1%
(60) bps
Occupancy4
54.8%
52.7%
210 bps
54.8%
52.7%
210 bps
Average room rate*4
£138.3
£140.2
(1.3)%
€163.8
€161.3
1.6%
RevPAR*4
£75.7
£73.8
2.6%
€89.7
€85.0
5.6%
Croatia
Like-for-like*1 in Pound Sterling (£)
Like-for-like*1 in local currency euro2,4 (€)
Year ended
31 Dec
2024
Year ended
31 Dec
2023
% change5
Year ended
31 Dec
2024
Year ended
31 Dec
2023
% change5
Total revenue
£80.6m
£78.1m
3.2%
€95.5m
€89.9m
6.2%
Room revenue4
£44.6m
£42.6m
4.7%
€52.8m
€49.0m
7.8%
EBITDA*
£21.7m
£20.4m
6.5%
€25.7m
€23.5m
9.6%
EBITDA margin*
27.0%
26.1%
85 bps
27.0%
26.1%
85 bps
Occupancy4
55.2%
52.7%
255 bps
55.2%
52.7%
255 bps
Average room rate*4
£138.7
£140.2
(1.0)%
€ 164.3
€ 161.3
1.9%
RevPAR*4
£76.6
£73.8
3.8%
€ 90.8
€ 85.0
6.8%
1 The like-for-like* figures exclude the results of art’otel Zagreb for the first 10 months of 2024.
2 Average exchange rate from euro to GBP for the period ended 31 December 2024 was 1.185 and for the period ended 31 December 2023 was 1.151, representing a 2.9% increase.
3 Independent valuation by Zagreb nekretnine Ltd in December 2024.
4 The room revenue, average room rate*, occupancy and RevPAR* statistics include all accommodation units at hotels and self-catering apartment complexes and exclude
campsites and mobile homes.
5 Percentage change figures are calculated from actual figures as opposed to the rounded figures included in the above table.
“We entered the Croatian market in 2008 with a
vision to reposition the Arena portfolio and capitalise
on the growing leisure demand for upscale and upper
upscale properties in this beautiful part of Europe.
We are thrilled with our progress made since.”
Total value of the Croatia
property portfolio3
£351m
(2023: £361m)
Number of employees
across Croatia
750
Room count
2,700+
Splendid Resort
Ai Pini Resort,
Arena Hotel Holiday
Horizont Resort
Grand Hotel Brioni Pula,
Park Plaza Arena Pula
TUI Blue Medulin,
Park Plaza
Belvedere Medulin,
Kamp Kažela apartments
Arena Verdula Beach & Villas,
Park Plaza Verudela Pula,
Park Plaza Histria Pula,
Hotel Riviera
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Appendices
Business Review – continued
Portfolio performance
The Group’s operations in Croatia are
principally seasonal and aimed at the
leisure segment. Most hotels, resorts
and campsites are closed during the winter
season the (first and last quarters of the
year), and open for guests from early
spring, around Easter time. Demand and
activity then accelerate during Q2 ahead
of the peak summer season in June, July
and August.
The portfolio performed well during the
peak season, albeit the shoulder month of
September was impacted by unseasonal
weather. Growth reported is a result of the
continued maturing of properties which we
have repositioned throughout the years,
with enhanced guest appeal and now firmly
positioned as upscale and upper upscale
properties. Tourism demand for our
portfolio is predominantly from countries
within driving distance such as Germany,
Austria, Italy, Slovenia, the Czech Republic,
Poland and Hungary, as well as domestic
guests. This growth was delivered despite
reduced flight capacity into Pula Airport
compared with 2019, which affected
demand from guests relying on flights from
countries such as the UK and the Nordics.
The Group’s hotels, campsites, and
self-catering holiday apartments all
delivered year-on-year revenue growth,
driven by increased average daily rates,
increased occupancy levels, and recent
investment projects. Following a
repositioning investment programme,
Arena Stoja Campsite was upgraded to
four-star and was awarded the prestigious
‘Croatia’s Best Campsites 2025’ for the
second consecutive year, together with
Arena Grand Kažela Campsite and Arena
One 99 Glamping.
The performance in the region benefited
from a strong year-on-year performance
of Grand Hotel Brioni Pula, which continued
to capitalise on significant investment
to reposition the property as a luxury
destination, and the recently opened city
centre art’otel Zagreb. These hotels operate
all year round.
Total reported revenue (in local currency) was
up 10.8% to €99.6 million (2023: €89.9 million).
RevPAR* increased by 5.6% to €89.7, which
reflected a 1.6% higher average room rate*
to £163.8 (2023: €161.3), while occupancy was
210 bps higher at 54.8% (2023: 52.7%).
Reported EBITDA* increases by 8.3% to
€25.4 million (2023: €23.5 million), which
delivered an EBITDA margin* of 25.6%
(2023: 26.1%).
On a like-for-like* basis, which excludes
art’otel Zagreb, total revenue was up 6.2%
to €95.5. Like-for-like* EBITDA* was up 9.6%
to €25.7, which represented an EBITDA
margin* of 27.0%.
“Arena Stoja Campsite was upgraded to four-star and was
awarded the prestigious ‘Croatia’s Best Campsites 2025’ for the
second consecutive year, together with Arena Grand Kažela
Campsite and Arena One 99 Glamping.”
Grand Hotel Brioni Pula – lobby bar
Unlocking growth in Croatia – continued
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C O LO G N E
Business Review – continued
Property portfolio
The Group’s portfolio includes four
properties in Berlin and one hotel each in
Cologne, Nuremberg and Trier. Hotels with
an ownership interest include Radisson RED
Berlin Kudamm3 (formerly Park Plaza Berlin
Kudamm), Park Plaza Nuremberg, art’otel
Berlin Mitte3, Park Plaza Berlin and art’otel
Cologne. Park Plaza Wallstreet Berlin Mitte
operates under an operating lease and
Park Plaza Trier3 operates under a
franchise agreement.
Portfolio performance
In Germany, the Group’s portfolio delivered
strong RevPAR* growth, driven by significantly
higher year-on-year occupancy and a
relatively stable average room rate*,
underscored by favourable travel trends,
international trade fairs and events in Berlin,
Cologne and Nuremberg, and continued
recovery in demand.
Total revenue (in local currency) was up 10.4%,
at €28.9 million (2023: €26.2 million). RevPAR*
grew by 10.2% to €94.9 (2023: €86.2), driven by
occupancy rebuilding to 69.5% (2023: 62.3%)
and average room rate* was maintained
at €136.6 (2023: €138.4).
EBITDA* improved significantly, up 28.5%
to €8.1 million (2023: €6.3 million), due to
increased revenue as well as a more stable
inflationary and labour cost environment.
EBITDA margin* improved to 28.0%
(2023: 24.0%).
During the year, the repositioning and
rebranding of the former Park Plaza Berlin
Kudamm was completed. The property closed
in November 2023 for the refurbishment of all
the public areas and guest rooms and was
relaunched as a Radisson RED hotel in June
2024. The soft opening enabled the hotel to
take advantage of the high level of demand in
Berlin during the European UEFA Football
Championship in June and July. The hotel was
fully operational from September 2024 and is
achieving excellent guest feedback. This is the
second Radisson RED branded hotel operated
by PPHE’s Croatian subsidiary Arena
Hospitality Group d.d.. The property is a joint
venture, so its performance in not included in
the metrics reported above.
The German hotel market*
The German market experienced a 6.8%
increase in RevPAR* to €79.4, resulting from
a 3.0% improvement in occupancy to 66.9%
and a 3.8% increase in average room rate*
to €118.8.
Unlocking growth in Germany
In Berlin, RevPAR* increased by 8.3% to
€93.1 and occupancy increased by 2.4%
to 73.4%. Average room rate* increased
5.8% to €126.8.
* Source: STR European Hotel Review, December 2024
Financial performance
Reported in Pound Sterling (£)
Reported in local currency euro1 (€)
Germany
Year ended
31 Dec
2024
Year ended
31 Dec
2023
% change4
Year ended
31 Dec
2024
Year ended
31 Dec
2023
% change4
Total revenue
£24.4m
£22.8m
7.2%
€28.9m
€26.2m
10.4%
Room revenue
£20.9m
£19.5m
7.3%
€24.8m
€22.5m
10.5%
EBITDA*
£6.8m
£5.5m
24.9%
€8.1m
€6.3m
28.5%
EBITDA margin*
28.0%
24.0%
395 bps
28.0%
24.0%
395 bps
Occupancy
69.5%
62.3%
720 bps
69.5%
62.3%
720 bps
Average room rate*
£115.3
£120.3
(4.1)%
€136.6
€138.4
(1.3)%
RevPAR*
£80.1
£74.9
7.0%
€94.9
€86.2
10.2%
1 Average exchange rate from euro to GBP for the period ended 31 December 2024 was 1.185 and for the period ended 31 December 2023 was 1.151 representing a 2.9% increase.
2 Independent valuation by Savills in December 2024.
3 Revenues derived from these hotels are accounted for in Management and Central Services performance and their values and results are excluded from the data provided
in this section.
4 Percentage change figures are calculated from actual figures as opposed to the rounded figures included in the above table.
‘‘Germany is a growing market and our presence is
balanced between predominantly corporate travel
and conference destinations such as Nuremberg and
Cologne, and the capital Berlin which benefits from
a strong leisure appeal.”
Total value of the
German property portfolio2
£85m
(2023: £92m)
Room count
1,100+
Number of employees
across Germany
250
Diverse clientele with
increasing business and
conference guest occupancy
Park Plaza Trier
art’otel Cologne
Park Plaza Nuremberg
Park Plaza Berlin
Park Plaza Wallstreet
Berlin Mitte
Radisson RED
Berlin Kudamm
art’otel Berlin Mitte
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Corporate Governance
Financial Statements
Appendices
Our performance
The revenue in this segment is primarily
related to management, sales, marketing
and franchise fees, and other charges for
Central Services. This includes properties
operated by the Group’s hospitality
management platform, such as art’otel
London Battersea Power Station.
These fees and costs are mainly charged
within the Group and therefore eliminated
upon consolidation. For the year ended
31 December 2024, the segment showed
an EBITDA* profit of £7.4 million, as internally
and externally charged management fees
exceeded the costs in this segment.
Management, Group Central Services and
licence, sales and marketing fees are
calculated as a percentage of revenue and
profit and therefore are affected by
underlying hotel performance.
Business Review – continued
Unlocking growth in other markets
Italy, Hungary, Serbia and Austria
This includes the Group’s properties in Austria, Italy and Serbia, and a property operated
in Hungary.
Reported in Pound Sterling (£)
Year ended
31 Dec
2024
Year ended
31 Dec
2023
% change1
Total revenue
£10.7m
£7.9m
35.8%
Room revenue
£8.3m
£6.1m
36.7%
EBITDA*
£1.3m
£(0.5)m
n/a
EBITDA margin*
11.8%
(6.7)%
1,850 bps
Occupancy
59.3%
44.4%
1,485 bps
Average room rate*
£116.1
£129.8
(10.6)%
RevPAR*
£68.8
£57.7
19.3%
1 Percentage change figures are calculated from actual figures as opposed to the rounded figures included in the
above table.
Our performance
The Group’s properties in Austria and
Hungary were open throughout the year.
The property in Serbia reopened as a
Radisson RED branded hotel in February
2024 following an investment programme.
The property in Italy was closed throughout
the year due to an ongoing major
repositioning investment programme.
Total revenue increased by 35.8% to
£10.7 million, and EBITDA* increased to
£1.3 million. This significant improvement
reflected the strong trading performance
of the three properties in operation,
including the Radisson RED in Serbia, which
was open for most of the year, compared
with two properties in operation in 2023.
RevPAR* increased by 19.3% to £68.8, driven
by occupancy, which increased to 59.3%.
The average room rate* decreased to £116.1.
The Group’s three properties in operation
all have achieved a 4.5 out of 5 guest rating
on Tripadvisor.
Nassfeld, Austria
The Arena FRANZ Ferdinand, a 144-room
mountain resort in the Austrian Alps,
performed strongly in its second year
in operation, following an investment
programme to refurbish the hotel and
upgrade amenities to position the resort.
The resort, which is now well positioned to
capture, benefiting from now operating
10 months of the year.
Rome, Italy
The major repositioning programme for
art’otel Rome Piazza Sallustio is nearing
completion, with construction work finished
and the hotel scheduled to open early March
2025. Following an extensive investment
programme, the property will be a 99-room
upper upscale premium lifestyle hotel in a
prime position in the city of Rome, opposite
the famous Horti Sallustiani (the Gardens of
Sallust) and close to other iconic landmarks
such as the Spanish Steps and Villa
Borghese. The Signature Artist is renowned
contemporary Roman artist Pietro Ruffo
and each room will feature Ruffo’s signature
artworks and originals, enhancing the
guest experience.
As well as contemporary rooms, the hotel
will offer guests a unique restaurant and
bar concept, and an art gallery with
seasonal exhibitions.
Belgrade, Serbia
Radisson RED Belgrade opened in February
2024, following a £2.6 million refurbishment
programme to reposition and rebrand the
property. The hotel offers a guest gym, an
all-day restaurant, flexible event spaces, a
co-working area, and a rooftop bar with
views of the historic city centre.
Management and Central Services
Reported in Pound Sterling (£)
Year ended 31 Dec 2024
Listed Company
Development
Projects
Management
Platform
Arena Hospitality
Group
Total
Management revenue
–
£0.1m
£40.1m
–
£40.1m
Central Services revenue
–
–
–
£15.8m
£15.8m
Revenues within the consolidated Group
–
–
£(32.2)m
£(14.9)m
£(47.1)m
External and reported revenue
–
£0.1m
£7.8m
£0.9m
£8.8m
EBITDA*
£(3.2)m
£(0.3)m
£11.1m
£(0.2)m
£7.4m
Reported in Pound Sterling (£)
Year ended 31 Dec 2023
Listed Company
Development
Projects
Management
Platform
Arena Hospitality
Group
Total
Management revenue
–
–
£37.3m
–
£37.4m
Central Services revenue
–
–
–
£14.0m
£14.0m
Revenues within the consolidated Group
–
–
£(30.9)m
£(12.9)m
£(43.7)m
External and reported revenue
–
–
£6.5m
£1.2m
£7.7m
EBITDA*
£(2.2)m
£(1.0)m
£12.0m
£(1.9)m
£7.0m
Since reopening, the hotel has continued
to rebuild its presence in the city.
This property was formerly Arena 88
Rooms Hotel. It was the Group’s first
Radisson RED branded property to open.
Budapest, Hungary
Park Plaza Budapest (formerly art’otel
Budapest) performed well, reporting
an increase in revenue, driven by an
improvement in occupancy.
The Hungarian hotel market*
The Hungary market experienced a 4.4%
increase in RevPAR* to €82.4, resulting from
a 4.0% increase in occupancy to 70.3% and a
0.4% increase in average room rate* to €117.1.
In Budapest, RevPAR* increased by 6.3% to
€86.9 and occupancy increased by 5.0% to
70.6%. Average room rate* increased 1.2%
to €123.0.
* Source STR European Hotel Review, December 2024
The Belgrade hotel market, Serbia*
In Belgrade, RevPAR* increased by 15.6% to
€85.53 and occupancy increased by 2.2% to
67.3%. Average room rate* increased 13.1%
to €127.1.
* Source STR European Hotel Review, December 2024
The Italian hotel market*
The Italian market experienced a 4.5%
increase in RevPAR* to €154.3, resulting from
a 0.1% increase in occupancy to 69.4% and a
4.4% increase in average room rate* to €222.5.
In Rome, RevPAR* increased by 3.1% to €172.4
and occupancy increased by 1.1% to 72.4%.
Average room rate* increased 2.0% to €238.2.
* Source STR European Hotel Review, December 2024
Number of
employees across
other markets
200
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As our business grows, it provides long-term, sustainable value to
a variety of financial and community stakeholders. By creating
beautiful, world-class hotels across our destinations, we deliver our
guests great experiences. We contribute to the economies of our
local communities, and we drive up environmental performance.
Guests
Stakeholder priorities
• Unique, memorable experiences
• Consistency in service and product
across the portfolio
• To enjoy our hotels in a responsible way
through a proactive approach to reducing
carbon, plastics and other waste
• Multiple, easy communication channels
throughout the guest journey
• A personalised approach
• Rewarding their loyalty
How we engaged in 2024
Our teams engage with guests, and monitor
guest feedback, in many different ways, from
interactions when guests stay with us – face-
to-face or through our dedicated WhatsApp
service, or pre and post stay with our
customer service centre team. In addition, we
collect and analyse more than 95,000 guest
reviews per annum, as well as thousands of
guest surveys, and we have social media
listening tools in place, allowing us to engage
with guests in real time. We also offer a live
chat function on our hotel websites during
office hours. In addition, our guests can
contact us through the Radisson Contact
Centres. In the year, we have expanded our
communications of ESG activities on our hotel
websites, to ensure that each of them conveys
to our guests the most important information
about what we do in this area.
Stakeholder engagement
Investors
Stakeholder priorities
• Transparency and accountability to
ensure that what we do drives long-term,
sustainable returns on investment
• Good corporate governance
• Reduced carbon emissions
• Diversity, Equity and Inclusion at
leadership level
How we engaged in 2024
Our senior leadership follow up on our full-
year and half-year results announcements
with an Investor roadshow. This enables us
to have open conversations on the results
and our strategy, allowing for increased
accountability to our investor base.
Video presentations about the results
are recorded and made available, to allow
any investor to access the key messages
and updates.
We continue to have regular investor
lunches at our hotels and conduct site
visits to present the progress made on
development projects and update on future
projects. We are also available on an ad-hoc
basis for periodic investor calls and
presentations, as well as online information
channels such as LinkedIn and an email
newsletter to investors.
Team members
Stakeholder priorities
• Working for an employer that cares
about their wellbeing and development
• Contributing to environmental and
social progress
• A great place to work: safe, flexible,
diverse and inclusive
• A job to be proud of
• Health, physical and mental
• Being rewarded for loyalty and dedication
How we engaged in 2024
We continue to have monthly ‘Team
Member Forums’ in our hotels, each
attended by a committee of employee
representatives. The Team Member
Forums are an occasion for everyone
to raise comments and suggestions, as
listening to the employee voice is key to
ensure a smooth communication between
the business and our team members. The
members of the Forum are elected by their
peers, with representatives from each
department in the hotel or regional office.
A Regional Forum made of a representative
from each location meets with the Executive
Vice President of Operations for the region
quarterly. Besides these Forums, we also
hold regular ‘Let’s Connect’ sessions, which
follow a town hall meeting approach. All
employees are invited to these sessions,
where senior leadership presents updates
on the business and receive feedback.
This year, we continued to engage our team
members with regular ESG newsletters, to
share updates on the milestones in this
space. Our network of ESG Ambassadors
based in the hotels is still supporting us to
gather information on various initiatives
taking place in every location, as well as
sharing any updates with their colleagues
directly in the hotels, thus reinforcing our
central communications efforts. The ESG
Manager has also regularly visited our
hotels to ensure that the General Managers
(GMs), the Ambassadors and all other team
members are up to date with the latest
progress on the ESG strategy.
Please see page 102 for further information
on Board engagement with the workforce.
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Stakeholder engagement – continued
Communities
Stakeholder priorities
• Creation of good, skilled jobs for local people
• Care for our local environment through clean air,
biodiversity, and waste reduction
• Engagement with non-profit organisations
• Support for civil society locally – schools, hospitals,
homelessness charities and the like
• Attracting consumers to local businesses
• Attracting investment
How we engaged in 2024
One of our ambitions is to have a consistent approach
to how our hotels support local communities, while still
leaving them the freedom to choose what causes are
most relevant for them to support. In 2024, this led to an
increased engagement of our hotels with various local
communities, supporting organisations such as The Felix
Project, The Children’s Society and StreetSmart.
Our efforts to support local communities also involved hiring
new employees through the UK-based partners Twin and
SPEAR, as well as through walk ins at our job centre, based
in London Victoria.
Affiliates
Stakeholder priorities
• A strong business partnership through
shared stewardship of brand standards
• Safeguarding brand reputation for
environmental and social issues
How we engaged in 2024
In 2024, we continued to engage regularly
with Radisson to enable alignment across
the two organisations, both on brand
standards and on other opportunities
for collaboration. An example of this
collaboration is the accreditation of our
hotels to Hotel Sustainability Basics (HSB),
which Radisson has conducted across all
its brands. HSB is an initiative launched by
the World Travel and Tourism Council
(WTTC) and is a globally recognised set of
sustainability indicators for the hospitality
sector, allowing for standardised criteria
across the industry. Our partnership with
Radisson is strong and spans many expert
teams, from our commercial team to learning
and development, from ESG to procurement
and from business development to health and
safety. All of these disciplines have regular
meetings and interactions with Radisson,
both structured and ad hoc, to ensure that
initiatives are aligned and that PPHE is
fully leveraging Radisson’s offering of
technologies, commercial programmes
and consumer brands.
Suppliers
Stakeholder priorities
• Ensure that suppliers are able to
meet our sustainability demands
• Alignment and collaboration on
sustainability goals
How we engaged in 2024
Our priority in 2024 has been to
explore what our current and prospective
suppliers are doing on ESG and understand
how we can collaborate to enhance the
sustainability profile of the products and
services we purchase. For example, we
engaged with our supplier of laundry
services in London to define how we can
work together to reduce energy and water
consumption associated with their service,
a collaboration that will continue in 2025.
The membership in the Zero Carbon
Forum has also been particularly helpful.
This allowed us to engage with various
suppliers and stay up to date with current
sustainability trends and opportunities
across various of our key commodities.
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Links to UN SDGs
Each of our targets is intended to contribute to one or more of the United Nations Sustainable
Development Goals (SDGs). The SDGs that we support the most are the ones below.
Environmental, Social and Governance
In 2024, we have made important advancements on
our ESG strategy, improving the sustainability profile
of our hotels and their social impact. This builds on a
set of 35 ESG targets we had established in 2023, all of which
have seen progress in the past 12 months.
Inbar Zilberman
Chief Corporate & Legal Officer
I
n 2024, we have made important
advancements in our ESG strategy,
working on the sustainability profile
of our hotels and their social impact.
This builds on a set of 35 ESG targets
we had established in 2023, grouped under
ten strategic objectives, all of which have
seen progress in the past 12 months.
The implementation of the strategy is led by
the ESG Manager, who reports to the
Chief Legal & Corporate Officer on our
performance and progress towards
our strategic objectives. We continue to be
members of the Zero Carbon Forum and the
Energy & Environment Alliance, both
particularly helpful for staying up to date
with real estate and hospitality trends on
sustainability, as well as reporting to CDP
(formerly known as Carbon Disclosure
Project) and WDI (Workforce Disclosure
Initiative).
ESG strategy targets
Our ESG strategy is based on the double
materiality principles. The last double
materiality assessment (‘DMA’) we
conducted was in 2022. This enabled us to
understand the most important issues for
our stakeholders, as well as how societal
and environmental factors affect our
business. Following a three-year cycle, we
have already begun the work to conduct a
new DMA in 2025, with the results to be
presented in next year’s annual report.
Our ESG strategy
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Decarbonisation journey
In our effort to reduce carbon emissions,
we have submitted a commitment letter to
the SBTi, outlining our intention to set net
zero and near-term targets, which we will
request the SBTi to validate. As part of this,
we are required by the SBTi to meet interim
goals, ensuring public accountability for
our progress, metrics and milestone
achievements. The next steps on this
journey are to assemble a decarbonisation
plan and finally submit to the SBTi for
validation by the end of 2025.
In 2024, we began the internal engagement
work with our senior management to
draft the decarbonisation plan. We have
also contracted additional support from
Greenview, a company which specialises in
this area to accompany us in this journey.
This project is expected to be completed
in 2025, with the final output being a
comprehensive list of actions to reduce the
carbon emissions across the whole business.
This will address emissions within Scopes 1, 2
and 3, that is, ranging from
recommendations to possibly replace and
phase out gas boilers, to working with our
suppliers to improve the environmental
performance of the products and services
we purchase.
Our business is at the intersection between
real estate and hospitality operations,
therefore a key focus of the plan will be on the
construction and refurbishment activities
that form part of our operations. This will
entail looking at construction materials used
for our projects and working with our
suppliers to find ways to reduce our footprint
in this area. Another critical area for
decarbonisation will be food and beverage
products, representing the majority of our
Scope 3 emissions, which again will require
significant engagement with our suppliers.
This year, we placed increased focus on ESG
communications and awareness within the
Company at all levels. In Q1 2024, we held a
bespoke masterclass for the Company’s ESG
Committee, which was delivered by the Zero
Carbon Forum. The purpose of this training
session was to educate the Board members
on the key aspects of decarbonisation and
equip them with knowledge to lead PPHE’s
response to climate change. This is
particularly important as we embark on
systemic changes in our strategic and
operational approach to both the real estate
and hospitality sides of our business in the
pursuit of decarbonisation. In addition to
that, the ESG Manager has conducted
regular engagement with teams in all the
properties to communicate progress on
the ESG strategy, as well as to get feedback
on it. This was aided by the team of ESG
Ambassadors present in each of our hotels,
who are the reference point on the ground
for initiatives around sustainability and local
community engagement.
To enhance alignment across the whole
Group, in June 2024 we held a cross-regional
workshop in Pula, Croatia. The objective was
to review progress towards our ESG targets
and strategic objectives and set future
priorities, also accounting for key regional
differences across our regions.
ESG strategic objectives
Each target contributes to achieving a
specific strategic objective, which has been
established to address stakeholder priorities
and ensure that all elements of the strategy
work cohesively. The strategic objectives are
designed to be mutually reinforcing, meaning
that progress on one will in many cases
advance others as well. These strategic
objectives are listed in the table to the right.
Strategic objective
Strategic pillar
Achieve net zero by 2040
Adapt to climate change
Attract and retain talent
Communicate our ESG efforts to stakeholders
Enhance biodiversity
Ensure waste management best practice
Promote Diversity, Equity and Inclusion
Promote ESG across our supply chain
Ensure good stewardship of water resources
Support local communities
Carbon footprint
In 2024, we continued to make
advancements in our carbon footprint
methodology, further increasing the level
of confidence in our results. This includes
improvements in internal processes to
ensure data integrity and extensive
involvement of various teams throughout
the footprint exercise.
Another area of improvement relates
specifically to Scope 3 emissions. The
available methods for calculating these
emissions generally are: 1) spend-based; 2)
volume-based; and 3) supplier level data.
While the spend-based method is the
simplest, as it consists in a multiplication
between the amount spent by an emission
factor, the volume-based method accounts
for the actual volume of products or
services purchased (regardless of the
amount spent on them), making the
calculations more accurate and disjointed
from factors such as inflation, which could
artificially skew the emissions calculations.
Finally, the supplier level data is regarded
as the most accurate method, as it relies
directly on emission factors provided by the
suppliers, who would have conducted life
cycle assessments on their products. With
this in mind, this year we expanded the
share of emissions calculated through a
volume-based approach across the whole
Group, with a view to start using supplier
level data in the near future, thus slowly
moving away from a spend-based approach
towards more accurate methods.
In 2024, we consolidated our suppliers
across various product categories in
the UK. Having fewer suppliers led to
increased standardisation in the data in
our procurement system, thus allowing
us to assign more accurate emission factors
to the individual items we purchase and
increasing the accuracy of the carbon
footprint calculations. Furthermore, this
year we implemented a halt to suppliers
offering more than one delivery per day,
unless critical for business continuation.
This enabled us to consolidate multiple
deliveries into a single one, hence reducing
associated costs and emissions.
in 2024 the carbon footprint calculations
were conducted by the consultants Zero
Carbon Services for PPHE and Code Gaia
for AHG, based on data provided by PPHE
and AHG. This is the same process as was
followed in 2023. The results are shown in
Table 1 below, together with a comparison
with 2023 in Table 2. The figures for 2023
are the result of a recalculation conducted
in 2024 to reflect an improved and more
accurate methodology.
Table 1 Carbon footprint of PPHE Hotel Group – 2024
tCO2e
(market-based)
% of total
(market-based)
tCO2e
(location-based)
% of total
(location-based)
Scope 1
9,661
11.2%
9,661
9.5%
Scope 2
1,887
2.2%
17,654
17.3%
Scope 3
74,744
86.6%
74,744
73.2%
Total
86,292
100.0%
102,059
100.0%
Table 2 Carbon footprint of PPHE Hotel Group – 2023
tCO2e
(market-based)
% of total
(market-based)
tCO2e
(location-based)
% of total
(location-based)
Scope 1
9,067
10.1%
9,067
8.8%
Scope 2
3,915
4.4%
16,935
16.4%
Scope 3
76,999
85.6%
76,999
74.8%
Total
89,981
100.0%
103,001
100.0%
Environmental, Social and Governance continued
The results show that overall emissions
for the Group have slightly decreased
year on year. The main driver of this
reduction is Scope 3, as various
construction and refurbishment projects
conducted throughout 2023 have come
to an end in 2024 (art’otel London Hoxton,
art’otel Zagreb, Radisson RED Belgrade
and Radisson RED Berlin Kudamm),
meaning that the related emissions in the
Scope 3 category ‘Capital Goods’ have
decreased in 2024. Another notable
reduction is in Scope 2 market-based
emissions, due to 2024 being the first full
financial year with renewable electricity
contracts for various European
countries, which now cover our
properties in all countries except for
Serbia. On the other hand, Scope 1
and Scope 2 location-based have both
increased year on year, largely due to
the four new operational properties and
increased occupancy across all regions.
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Environmental, Social and Governance – continued
Sustainable properties
Building on this work, in the fourth quarter
we have also engaged the consultancy
Sweco to support us in obtaining the
BREEAM in-use certification for some
additional properties, with the submission
to BRE (the organisation responsible for
the BREEAM certification) expected to be
completed in 2025. Once this is done, BRE
will review the evidence provided in our
submission and issue the BREEAM in-use
certifications for the appropriate rating.
A remarkable achievement was art’otel
Zagreb receiving the 2024 Green Building
and Sustainable Built Environment Award in
the Building of the Year – Reconstruction
category. This was awarded by the Croatian
Green Building Council and recognises
energy-efficient building reconstructions
completed between January 2023 and
July 2024.
Hotel sustainability certifications
The environmental performance of our
properties has also supported our hotels in
achieving high scores in their sustainability
certifications, such as Green Tourism,
Green Globe, Green Key, Travelife and Blue
Flag. The full list of these certifications is
shown in Table 3 on page 75.
The few properties in our portfolio
currently missing from the list are on track
to receive their Green Key and Green
Tourism certifications in 2025.
In 2024, all our hotels also achieved the
HSB accreditation, an initiative promoted
by Radisson across all its brands. HSB is
an initiative launched by the WTTC and is
a globally recognised set of sustainability
indicators for the hospitality sector,
allowing for standardised criteria across
the industry.
Waste management
We are committed to reducing the amount
of waste generated by our properties and
to dispose of it through the appropriate
channels. Our waste is recycled wherever
possible, or incinerated to generate energy
in waste-to-energy facilities, with a small
minority of it still going to landfill. However,
we are working across our whole portfolio
to bring the share of waste sent to landfill
down even further in the coming years.
As a significant step towards reducing
plastic waste, in 2024 we moved from
single-use toiletry bottles to large
dispensers across all our properties.
By eliminating small plastic bottles, we will
minimise the amount of plastic produced
and waste generated, ultimately reducing
our environmental impact in this area.
To ensure the most appropriate disposal
of these dispensers we partnered with
Clean the World, an organisation
specialised in waste recycling, who now
collect and process the used dispensers
from our properties. This shift not only
has environmental benefits, but also
enhances the guest experience, as the
larger dispensers ensure a reliable
supply of high quality products for
the entire stay without the need for
regular replacements.
At the same time, we have progressed
with the elimination of other single-use
plastic items from our hotel rooms,
such as the plastic wrapping around
our slippers, as well as plastic combs
and toothbrushes, which have been
replaced with bamboo alternatives. In
our Dutch properties, we adopted the
EcoTap water bottling system for guest
rooms, reducing our reliance on
plastic bottles.
In 2024, we have engaged the company
The Waste Specialists, which began to
support us in aligning waste management
practices across our UK properties.
The plan we devised with The Waste
Specialists for 2025 is to introduce new
bins to improve waste sorting where
necessary, to launch staff training on
waste management, and to set a clear
baseline for food waste to then introduce
future internal reduction targets.
In various properties in Croatia, we
introduced food recycling machines to
convert food waste into compost, giving
this waste a new life.
Links
to UN
SDGs
We continue to source 100% renewable
electricity to all our hotels (except for
Serbia) through Renewable Energy
Guarantees of Origin (REGOs) in the UK
and Guarantees of Origin (GoOs) in the
rest of Europe. Park Plaza Arena Pula
and Grand Hotel Brioni Pula are equipped
with photovoltaic panels for on-site
renewable energy generation, which
we are looking to install in additional
properties in 2025.
In 2024, we have upgraded some of
the equipment in our hotels to achieve
energy efficiency gains. These include
the replacement of old minibars with
highly efficient thermoelectric ones,
the installation of boiler pumps with
improved efficiency, and the installation
of a kitchen extractor control system in
various hotels.
Building certifications
To raise our properties’ environmental
performance, in past years we have
already achieved BREEAM certifications
for some of them: Park Plaza London
Waterloo (Very Good), Park Plaza London
Riverbank (Very Good), Park Plaza London
Park Royal (Very Good) and art’otel
London Battersea Power Station
(Excellent). This list has been expanded
in 2024, with art’otel London Hoxton
obtaining a BREEAM Excellent certification,
with other properties in our portfolio
expected to get the certification in 2025.
In 2024, we have adopted a Group-wide
policy which will require that all new-build
hotels, repositioning projects and
refurbishments obtain a certification
by a recognised building certification
scheme, such as BREEAM or DGNB
(Deutsche Gesellschaft für Nachhaltiges
Bauen), depending on the location.
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Table 3 List of our hotel sustainability certifications
Green Key
The Netherlands
Park Plaza Eindhoven
Park Plaza Vondelpark, Amsterdam
Park Plaza Utrecht
Germany
art’otel Berlin Mitte
art’otel Cologne
Radisson Red Berlin Kudamm
Park Plaza Berlin
Park Plaza Wallstreet Berlin Mitte
Park Plaza Nuremberg
Austria
Arena Franz Ferdinand Nassfeld
Serbia
Radisson RED Belgrade
Croatia
Park Plaza Histria Pula
Park Plaza Punta Verudela Pula
Arena Verudela Beach Resort Pula
Park Plaza Arena Pula
Grand Hotel Brioni Pula
Splendid Resort Pula
Horizont Resort Pula
Park Plaza Belvedere Medulin
Arena Hotel Holiday Medulin
Hotel TUI Blue Medulin
Ai Pini Medulin
art’otel Zagreb
Arena Grand Kažela Campsite Medulin
Arena One 99 Glamping
Arena Stoja Campsite Pula
Arena Medulin Campsite
Arena Stupice Campsite
Arena Tašalera Campsite
Arena Runke Campsite
Arena Indije Campsite Banjole
Green Globe
The Netherlands
Park Plaza Amsterdam Airport
Park Plaza Victoria Amsterdam
Blue Flag
Croatia
Park Plaza Histria Pula
Grand Hotel Brioni Pula
Travelife
Croatia
Park Plaza Belvedere Medulin
TUI BLUE Medulin
Park Plaza Histria Pula
Green Tourism
UK
Park Plaza London Westminster Bridge
Park Plaza Nottingham
Park Plaza County Hall London
Park Plaza London Waterloo
Park Plaza London Riverbank
Park Plaza Victoria London
Park Plaza Leeds
Holmes Hotel London
Environmental, Social and Governance – continued
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Forward-looking people
Environmental, Social and Governance – continued
As part of the ESG strategy, we have in place various
targets regarding our team members, encompassing
wellbeing, engagement rate, investment in learning and
development, and retention rate.
Another area of work this year focused on
learning and development (L&D). To enhance
our offer, the dedicated corporate office team
has been expanded, leading to the creation of
an extensive onboarding journey for new
leaders and our Degree Apprenticeship.
We are proud of this programme, as it is an
industry first. This is run in collaboration with
Dorchester Group, Grosvenor House and
Red Carnation, and is delivered in partnership
with the University of Gloucestershire. We
have now hired 12 young Londoners on two
cohorts who are working over three years
towards a BA in Applied Hospitality
Management. This is just one of nine different
apprenticeship programmes currently on
offer, for which 45 people were enrolled in
2024. Management development has also
been a key focus, with the development and
roll out of several new workshops to all line
managers, such as Employee Engagement for
Line Managers and Interviewing & Candidate
Experience, both contributing positively to
employee engagement and time-to-hire
respectively, with time-to-hire reduced by
30% in the UK. Across our art’otel hotels,
we rolled out the art’print programme,
our differentiated culture and purpose
blueprint and related training programme,
to all team members.
Diversity, Equity and Inclusion (DE&I)
This year, PPHE has placed particular focus
on DE&I initiatives around talent acquisition,
emphasising community engagement,
personalised recruitment, and partnerships
with organisations supporting diverse
groups. Key actions implemented in our
UK hotels include the following:
1.
Community partnerships: PPHE
collaborates with the organisations
Twin and SPEAR, as well as the UK
Department for Work and Pensions,
to hire individuals from diverse
backgrounds, including neurodiverse
candidates and young people with
limited experience. Regular events at
the career centre connect candidates
from these groups, boosting retention
and community ties.
2. Support for underrepresented
groups: in 2024, PPHE has hired 171
individuals from charities and job
centres, providing support for those
struggling to enter the workforce.
These hires have higher retention
rates, with 67% of charity-referred
employees staying over a year.
3. Talent development programmes:
Graduate and Apprenticeship
programmes, focusing on skill
development in roles like Apprentice
Chefs and Graduate Managers,
offer pathways to permanent roles,
strengthening talent retention.
4.
Inclusive culture: Representing 98
nationalities, PPHE fosters inclusivity
within its properties, exemplified by
a welcoming mural at Park Plaza
Westminster Bridge London in
employees’ native languages.
5.
Sustained DE&I focus: Using
data-driven retention reports, PPHE
regularly refines its hiring practices
and supports DE&I goals by gathering
new-hire feedback and adjusting
sourcing strategies based on
retention rates.
Links
to UN
SDGs
Our employee engagement rate
is measured through two surveys per
year at PPHE and one per year at AHG.
PPHE’s average employee engagement
rate, based on the two surveys conducted
in 2024, was 84.5%, placing the Company
over 2% above the sector average and
above our internal target. This result
has had positive effects on the retention
rate, which increased by 6.3% in the UK
and 6.7% in the Netherlands. Due to
the seasonality of employment in AHG’s
locations, we set a slightly lower target
for those regions, with results showing
an engagement level of 75%. For this
reason, in 2024 the engagement survey
methodology for AHG was amended to
reflect the diverse workforce, such
as permanent, seasonal and foreign
employees, which will ultimately enable
the collection of more meaningful
feedback from our workforce
going forward.
We have set ambitions around employee
wellbeing, with the relative metric also
showing significant improvements
throughout 2024, supported by
initiatives such as the launch of the
Vitality platform for all team members.
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Environmental, Social and Governance – continued
With these initiatives, we aim to make DE&I a
key focus of our recruitment approach, one
that values personalisation, inclusivity and
long-term retention.
Besides these initiatives in recruitment,
in 2024 we have introduced mandatory
DE&I training for all managers in our
organisation, both at the beginning of
their journey with PPHE and then as
refreshers on a yearly basis.
ESG Ambassadors
Last year, we established a network
of ESG Ambassadors throughout our
organisation, with at least one Ambassador
in each of our properties in the UK and the
Netherlands. This is a group of nearly 20
very passionate team members who
provide invaluable support to the ESG
Manager in the implementation of our ESG
strategy. Examples of their involvement
include fostering relationships with
charities, supporting the GMs in the
reporting of ESG data, and leading on the
process to obtain the hotel sustainability
certifications such as Green Tourism.
ESG communications and training
PPHE’s ESG Manager and Head of Compliance
regularly visit our hotels in the UK and the
Netherlands to deliver updates to team
members, including General Managers
and Heads of Department. These typically
cover highlights of the ESG strategy and
key sustainability initiatives, as well as a
general refresher on our whistleblowing
policy, harassment in the workplace and safe
personal data handling. AHG’s ESG Manager
also has regular contact with all the ESG
teams across our properties, who drive
environmental and social initiatives on site,
for example supporting in the Green Key
certification process.
We launched a quarterly ESG newsletter,
with the aim to keep our colleagues engaged
and up to date with the latest development in
the strategy. The various editions covered
updates on our emission reduction plans,
engagement with local communities and the
launch of the corporate volunteering day.
ESG communications in AHG are shared
to all employees via the Connecteam app.
This internal channel is very important to
ensure that relevant information and
updates reach the widest possible audience
across the organisation. Examples of
content shared through this channel
include activities in support of local
communities and volunteering, as
well as corporate ESG updates.
The ESG Ambassadors also play an
important role to ensure that our team
members are involved in the Company’s
environmental and social activities, as they
are now recognised as the relevant people
in their respective hotels and regularly
share updates on the ESG strategy in team
meetings, as well as serve as first points of
contact for any queries at the hotel level.
With clients and prospective team
members increasingly demanding
information about our ESG activities,
we identified the need to upskill our Sales
and Recruitment teams in this area. To
bridge this gap, the ESG Manager started
to deliver regular updates to these teams,
to equip them with the necessary knowledge
to communicate PPHE’s ESG ambitions
and progress.
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PPHE Hotel Group
Resilient supply chain
Given the size and nature of our business, our supply chain
spans across many sectors and geographies. Therefore, having
an understanding of our impacts along the supply chain is critical
to raise environmental and social standards.
At PPHE, we have a Responsible and Ethical
Sourcing Policy in place, covering issues such
as human rights and discrimination, which
we ask all our current and prospective
suppliers to abide by, while AHG has a set
of policies that lay out various standards
for the supply chain (for example, the
Environmental Management Policy and the
Human Rights and Labour Standard Policy).
As a UK-listed company, we have also set out
how we approach human rights and labour
standards in our supply chain in our Modern
Slavery Statement, which is available on
our corporate website.
As part of the upcoming work on the
decarbonisation plan, in 2025 we will devise a
list of actions to reduce our carbon emissions
across our supply chain (Scope 3). Since these
represent the vast majority of our emissions,
a focus on this area will be instrumental for
PPHE to achieve meaningful reductions over
the coming years.
Links
to UN
SDGs
Our priority in 2024 has been to
explore what our current and prospective
suppliers are doing on ESG. An example of
this collaboration is the engagement we
had with our supplier of laundry services
in London, which is allowing us to identify
opportunities to reduce energy and water
consumption associated with their service.
As mentioned on page 71, in 2024
we consolidated our suppliers across
various product categories in the UK.
This led to increased standardisation in
the data in our procurement system and
allowed us to assign more accurate emission
factors to the individual items we purchase,
ultimately increasing the accuracy of the
carbon footprint calculations.
Through engagement with the Zero
Carbon Forum, in 2024 we also continued to
obtain industry knowledge on sustainability
trends and opportunities in the sector. This
is particularly important as it allows us to
stay up to date with the latest sustainability
developments, for example regarding
various F&B products that have
a significant impact on our carbon
footprint (such as meat and dairy).
Environmental, Social and Governance – continued
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Strong Local Communities
In 2024, we have strengthened our collaboration with the local communities where we
operate in various ways. We have formally launched a corporate volunteering day, allowing
every employee to take one paid day off work (on top of their annual leave allowance) to
volunteer for a not-for-profit organisation. This will enable our team members to provide a
valuable contribution to these organisations and help them achieve their missions.
Following the beginning of our
collaboration in 2023, this year we
also continued to support the charity
StreetSmart, which assists homeless people
in London. For this charity we also collected
funds through optional donations to
restaurant and bar bills in the period
November – December, raising a total
of nearly £4,000.
In addition to this work, we continue our
strong collaboration with the charity Just a
Drop. Through this programme, launched in
September 2022, guests staying for at least
two nights have the option to forgo all
housekeeping services, thereby reducing
the amount of water, energy and detergents
used to clean linens. The hotel then donates
€/£1 per opted-out night to Just a Drop and all
the funds raised help the charity to provide
essential water, hygiene and sanitation to
communities in developing countries. In
return, guests can also choose from a
selection of rewards in recognition of
their support.
In 2024, we donated £129,000 to Just a Drop,
bringing the total raised since the start of the
collaboration to over £240,000. These
resources enabled the charity to fund
projects in small communities in Cambodia,
Zambia, Nicaragua and Kenya.
Links
to UN
SDGs
To expand our contribution to our
communities, we have established
partnerships with some new charities,
such as The Children’s Society and
The Felix Project.
The Children’s Society is a UK-based
charity that focuses on improving the
lives of vulnerable children and young
people. For this organisation, we have
hosted activities such as bake sales and
charity sales in our hotels and corporate
office in the UK, and we are currently
planning further recurrent initiatives
going forward.
The Felix Project is a London-based
charity focused on reducing food waste
and combating hunger by redistributing
surplus food to those in need. This year,
we have donated nearly £4,000 to the
project by adding an optional donation
to restaurant and bar bills over the
period May – July.
Environmental, Social and Governance – continued
Other notable organisations that our hotels
have supported through in-kind or financial
support include the Oasis Academy, the
Ealing Soup Kitchen and Hospitality Action.
In September 2024, some of our GMs in the
Netherlands have also raised €6,500 for
the charity Kika by taking part in the
Dam tot Dam Loop run in Amsterdam,
supporting the organisation in the fight
against childhood cancer. In Croatia,
AHG supported the city of Pula through
donations to the Pula General Hospital, the
Pula Film Festival and the Pula Marathon.
Besides these charity initiatives, some
of our hotels also support biodiversity
projects. For instance, with our Croatian
properties in Pula and Medulin being
located within Natura 2000 protected
areas, we are committed to protect these
areas and ensure their preservation. To
reduce the impact that our business on
water resources in the area, in 2023 we
installed two desalination plants, one in
Pula and one in Medulin, which provide us
with fresh water for landscape irrigation.
In 2024, we commissioned environmental
impact studies on both plants, with the
outcomes confirming that these plants
do not have adverse impact on the
local ecosystems.
Other examples of biodiversity
projects are the beehives that our hotels
Park Plaza Nottingham and Park Plaza
London Waterloo have on their rooftops,
each of them producing around 70kg of
honey in 2024, which is used for food and
drinks in the hotel or gifted to some of
our guests.
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TCFD report
The UK Listing Rules (6.6.6(8)R) require the Company to include a Task Force on
Climate-related Financial Disclosures (TCFD) statement in the Annual Report.
This section is drafted in compliance with the
11 TCFD recommendations and, together
with a climate scenario analysis, it provides
an overview of the four pillars of the TCFD
report for PPHE: Governance, Strategy,
Risk Management, and Metrics and Targets.
These pages also address our reporting
obligations under the Streamlined Energy
and Carbon Reporting (SECR) regulation
and the requirements of the Companies
Act 2006 as amended by the Companies
(Strategic Report) (Climate-related Financial
Disclosure) Regulations 2022.
Governance
An important change in our Enterprise Risk
Management (ERM) framework is that, to
reflect their relevance in our business
planning, as of 2024 climate related risks are
no longer classified as emerging risks and
are treated just like all other business risks.
Our risk management framework is built on
four key elements that support informed
decision-making: a risk-reward strategy,
strong risk governance, a structured risk
management process, and risk assurance.
Enterprise risk assessments are conducted
quarterly, evaluating each risk’s likelihood
and potential impact.
In 2021, we established an ESG Committee,
which is currently made up of four of our
Non-Executive Directors and oversees
PPHE’s work in this area. Meeting on a
quarterly basis, the Committee engages with
the Executive Leadership Team to discuss
updates on climate related issues, approves
the strategy and targets proposed by the
Executive Leadership Team, and reviews the
TCFD disclosures annually in February. It also
oversees the ESG strategy, ensures that
stakeholders are consulted on ESG related
initiatives, and monitors how these activities
are communicated to both internal and
external stakeholders.
The Audit Committee oversees and advises
the Board on the Group’s risk exposure, risk
appetite and future risk strategy. As part of
this responsibility, it meets quarterly to help
monitor both financial and non-financial
climate related risks, tracking changes that
could affect the Group’s overall risk profile.
In Q4 2024, the Head of Internal Audit and
Risk conducted routine functional risk
reviews with all internal departments, aided
by the ESG Manager, for climate related risks.
The findings were reported to the Audit
Committee, and no new issues or concerns
regarding climate related risks were
identified during this process.
The Chief Corporate & Legal Officer, Inbar
Zilberman, reports to the ESG Committee of
the Board and is the Executive Leadership
Team member responsible for ESG and
climate related matters. She oversees
compliance with TCFD reporting
requirements and ESG arrangements,
practices and procedures.
In 2024, we continued with our awareness
campaign to embed environmental
sustainability and social responsibility into
our daily operations. This campaign included
a newsletter, ESG Ambassadors at our
hotels, and ESG training available to all
employees. Through these initiatives, we aim
to cultivate a culture of responsible action
across all areas of our business.
Strategy
We recognise the complexity of climate
change and our responsibility to minimise
our environmental impact. With this in mind,
we are committed to reducing our carbon
footprint and overall environmental footprint.
Our ESG strategy, along with its detailed
targets, plays a pivotal role in helping us
achieve this goal. As a company that develops,
owns, co-owns and manages many of its
properties, we have an advantage in adopting
sustainability initiatives across every stage
of our business, from property development
to daily operations. By embedding
sustainability into all aspects of our activities,
we aim to create long-term value for the
Group and our stakeholders.
Building on the progress made in 2023,
this year we further developed and refined
our ESG strategy. As part of our journey,
we have committed to create a detailed
decarbonisation plan on the path to
achieving net zero by 2040, which will be
instrumental for our SBTi submission. In Q4
2024, we have engaged specialist support
from the consultant Greenview to assist us
in this mission. The output of this work will
be a comprehensive list of actions to tackle
carbon emissions in our business, a
crucial stepping stone to inform our
decarbonisation actions in the years to
come. Additionally, we have maintained our
collaboration with the Zero Carbon Forum
and the Energy and Environment Alliance,
whose expertise also continues to inform
our decarbonisation efforts.
Environmental sustainability is a dynamic
and evolving field, shaped by advancements
in climate science, emerging technologies,
and governmental commitments to reduce
economy-wide carbon emissions. As these
commitments drive changes in policy across
our industry, climate risk assessment
remains essential to ensure that our
business strategy remains resilient and
sustainable for the long term.
Climate scenario analysis
As part of the TCFD obligations, in 2024 we
reassessed the transition and physical risks
that PPHE is exposed to. This year, we
expanded our analysis of physical risks
beyond the regional level and delved into
the risk profile at the property level, an
ambition that we set out in 2023. We did so
by engaging the specialists at Climatig, who
provided us with access to their proprietary
software to analyse physical climate risks
under the two different climate change
scenarios below.
Representative Concentration Pathway
4.5 (RCP4.5): This is an International Panel
on Climate Change (IPCC) intermediate
climate scenario for GHG emissions where
the assumption is that these emissions will
peak around 2040 and then decline.
Representative Concentration Pathway
8.5 (RCP8.5): This is another IPCC climate
scenario, generally taken as the basis
for the worst-case climate scenario for
GHG emissions, with the assumption that
the GHG emissions will continue to rise
throughout the 21st century.
Time horizons
Given the long-term implications of climate
change, the risks were considered across
three time horizons:
• short term: 2025–2027;
• medium term: 2028–2030; and
• long term: 2031–2040.
These scenarios were selected as they allow
for sufficient granularity in the analysis,
while also not overextending our ability
to conduct the climate risk assessment
far into the future. Given the uncertainty
surrounding climate change, both in its
effects and in the policies governing the
response, it is challenging to accurately
forecast the long-term impact on our
business. As a result, we chose to define
2040 as the end boundary for our long-term
scenario, as predictions beyond that point
become speculative.
Note that the tables that follow, presenting
transition and physical risks, group together
the assessment of the financial impact in the
medium and long term. The reason for this is
that, given the time horizons selected, our
assessment did not identify any meaningful
difference between the impacts of these
risks in the medium and the long term.
Transition risks
We identified and assessed four transition
risks, as outlined in Table 1. The risk profile
for these varies primarily based on the
geographic location of our properties. For
instance, customer expectations around
climate related issues may have a stronger
influence in certain countries, and the same
applies to local regulatory environments.
Table 1 Assessment of residual transition risks
Transition risk
Likelihood
Short-term
financial
impact*
Medium/
long-term
financial
impact*
Negative perception of the Group by
stakeholders with regard to climate
related matters
Unlikely
Moderate
Moderate
Climate change increasing input costs
Almost certain
Minor
Moderate
New climate related regulations impacting
asset value
Very unlikely
Minor
Moderate
Cost and disruption of updating physical
infrastructure to phase out non-
renewable energy sources
Almost certain
Minor
Major
* Minor: <£1.25 million; Moderate: £1.25–6.75 million; Major: £6.75–25 million. All refer to annual impact.
The risk of ‘Negative perception of the
Group by stakeholders with regard to
climate related matters’ is well mitigated by
PPHE through some elements of our ESG
strategy, such as our ambitions around
building environmental certifications to
assess climate risk and the work to submit
our decarbonisation targets to the SBTi.
The reason for highlighting the risk of
‘Climate change increasing input costs’ in
our assessment is twofold. On the one hand,
it relates to F&B costs, which have increased
in recent years because of, among other
reasons, the effects of climate change. On
the other hand, it is due to the impact that
carbon pricing has on some of the input
costs to build our properties (for example,
steel and cement). Given the significant part
that F&B and construction activities play in
our business model, this is a risk that we will
pay close attention to in the future.
The risk of ‘New climate related regulations
impacting asset value’ refers to the various
mandates requiring that buildings adapt to
certain standards, such as the EPC rating
(energy performance certificate) in the UK.
One of our main mitigation measures for
this risk is to ensure that all our all new-
build hotels, repositioning projects and
refurbishments obtain a certification by a
recognised building certification scheme
(such as BREEAM or DGNB). In addition to
this, we are currently conducting BREEAM
in-use assessments for some of our
properties, which will serve as a further
mitigation measure to this risk.
The ‘Cost and disruption of updating physical
infrastructure to phase out non-renewable
energy sources’ is also an important one in
our risk register. Some of the countries in
which we operate have set ambitious goals
around the phasing out of gas (for example,
the UK and the Netherlands), which might
lead organisations like ours to accelerate
the transition to other energy sources, with
potentially higher costs associated to it.
Having identified the above risks, we have
control and mitigation measures in place for
all of them, which we monitor on an annual
basis to ensure that our response can be
promptly adjusted if there are any changes
to the risk profile.
Physical risks
The physical risks we consider material to
our business are outlined in Table 2.
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Table 2 Assessment of residual physical risks
Physical risk
Likelihood
Short-term
financial
impact*
Medium/
long-term
financial
impact*
Coastal flooding
Very unlikely
Minor
Minor
River flooding
Unlikely
Moderate
Moderate
Heavy precipitation
Likely
Minor
Minor
Drought
Possible
Minor
Minor
Wildfires
Unlikely
Moderate
Moderate
Heatwaves
Possible
Minor
Minor
* Minor: <£1.25 million; Moderate: £1.25–6.75 million; Major: £6.75–25 million. All refer to annual impact.
It is important to note that the significance
of these risks varies widely across our
properties. For instance, while heavy
precipitation primarily poses a threat to
our properties in London, coastal flooding
and wildfires are a greater concern for
those in parts of the Netherlands and
Croatia, respectively. In contrast, risks
such as heatwaves are relevant to every
property in our portfolio.
While some of our properties in the
Netherlands are potentially exposed to
coastal flooding, being below sea level,
the country has various sea barriers
throughout the coastline to protect it from
this type of event, leading to a very low
likelihood of occurrence. In the same way,
while it is true that many of our hotels are
located near rivers (for example, the River
Thames in London), river flooding risk is
still relatively low for them due to defence
mechanisms that are in place. In London,
this role is played by the Thames Barrier,
which is located in the Eastern part of the
city and protects it from tidal surges and
sea level rise, ultimately reducing the risk
of river flooding.
Similarly to coastal and river flooding,
heavy precipitation can also lead to flooding.
Of the three flooding related risks (coastal,
river, heavy precipitation), this is the most
concerning for our properties, as it is the
one for which the fewest measures are in
place at the city or regional level. However,
the expected impact on our properties is
still considered minor.
The drought risk is of particular relevance
to our Croatian properties. To mitigate this
and tackle water shortage in the area, in
2023 we installed desalination facilities in
Pula and Medulin. These plants now provide
sufficient fresh water for irrigation of the
surrounding landscape, contributing to
reducing our freshwater withdrawal in
the area.
In general, while our hotels are exposed to
the transition and physical risks listed above,
none of them are expected to generate major
financial impacts on our portfolio, and for
each of them we have control and mitigation
measures in place, including insurance and
crisis management plans.
Climate related opportunities
While climate change mostly poses risks to
our business and to the hospitality industry
as a whole, we always seek to also identify
the opportunities this might bring. For our
business, these typically lie in our ability
to adapt to climate change more quickly
than our competitors, by offering more
sustainable products and services to our
guests and constantly increasing the energy
efficiency of our operations.
These efforts will be supported by the
decarbonisation plan that we will devise in
2025, which will give us a detailed list of
actions to reduce our emissions across our
assets and operations. Our commitment to
setting science-based targets will be an
opportunity for our business to increase our
competitiveness on climate related matters.
On the real estate side of our business, we
are pursuing BREEAM in-use certifications
for some of our properties. Among other
benefits, this will help us better understand
the climate related risks that these
properties are exposed to and increase our
preparedness to address them. Another
opportunity given by the BREEAM in-use
certifications is that this third party
assessment will also have the potential to
increase the value of these properties.
Risk Management
A comprehensive risk management process
is essential to our success. We have an
ERM system for the whole Group that is
embedded within the strategy of each
corporate function. As mentioned above, as
of 2024, climate related risks are no longer
classified as emerging risks in our ERM and
are treated just like all other business risks,
enhancing our focus on them for business
planning purposes. Our risk management
framework is built on four key elements
that support informed decision-making:
a) a risk-reward strategy; b) strong risk
governance; c) a structured risk
management process; and d) risk
assurance. Enterprise risk assessments
are conducted quarterly, evaluating each
risk’s likelihood and potential impact.
Metrics and Targets
With climate change presenting a major
challenge to the hospitality industry, it is
crucial for every organisation in the
sector to pursue more sustainable and
transparent operations, and PPHE is
deeply committed to reducing our carbon
footprint. In 2023, we enhanced the level
of detail of our carbon balance sheet by
providing a detailed breakdown for each
country in which we operate, a format that
is replicated this year as well.
This step has been instrumental in
advancing our Group’s progress toward
science-based targets and our net zero
ambition. Our key environmental
performance targets include:
• achieving net zero by 2040.
In 2024 we engaged external specialist
support to help us with the draft of a
decarbonisation plan and the submission
to SBTi.
• ensuring that all our all new-build hotels,
repositioning projects and
refurbishments obtain a certification by a
recognised building certification scheme.
This year we launched an internal policy to
ensure that this ambition is achieved.
• procuring renewable electricity where
available.
As of 2024, we source renewable electricity
in all the countries in which we operate, with
the exception of Serbia.
Streamlined Energy And Carbon Reporting
The SECR requirements, established by the
2018 Regulations for quoted companies
large unquoted companies and large LLPs,
apply to financial reports for years
beginning on or after 1 April 2019.
This SECR report includes data on energy
consumption, carbon emissions, intensity
ratios and methodologies, and a narrative
on energy efficiency actions.
The disclosure is for the period from
1 January 2024 to 31 December 2024 and
it covers:
• energy use for 2024 and 2023;
• GHG emissions for 2024 and 2023;
• intensity ratios for 2024 and 2023;
• details on energy efficiency actions
implemented in 2024; and
• the methodology used for the calculations.
Our carbon footprint is based on the GHG
Protocol, utilising emission factors relevant
for each region in which we operate. The
analysis presents our emissions across
Scopes 1, 2 and 3:
• Scope 1 emissions cover direct emissions
from the combustion of gaseous and
transportation fuels by the Company.
• Scope 2 emissions include indirect
emissions from purchased electricity and
district heating and cooling used in our
hotels and offices.
• Scope 3 emissions account for indirect
emissions from the products and
services we procure. While we do not
have direct control over these emissions,
we actively collaborate with our value
chain partners to develop strategies for
reducing them as part of our goal to
achieve net zero by 2040.
Scope 2 emissions can be calculated using
either the location-based or market-based
approach. The location-based method relies
on the average emission factor of the
energy grid in the area where consumption
occurs, while the market-based method
considers specific contractual instruments
companies use to procure their energy,
such as renewable energy contracts or
on-site renewable energy generation.
The carbon footprint calculations were
conducted by the consultants Zero Carbon
Services (ZCS) for PPHE and Code Gaia for
AHG, and ultimately merged into the results
for the whole Group by ZCS.
Note that the 2023 figures were
recalculated in 2024 to reflect an improved
and more accurate methodology. The
figures reported include all hotels under
management, regardless of the ownership
structure. Therefore, emissions from the
hotels Park Plaza County Hall London and
art’otel London Battersea Power Station are
also included in their entirety. The tables
below present our carbon footprint results
and summary of our energy consumption
for the UK and the whole Group for 2024
and 2023.
Table 3 Summary of UK-only energy
consumption and carbon emissions – 2024
Scope
Energy
consumption
(kWh)
Emissions
(tCO2e)
Scope 11
27,542,200
5,880
Scope 2
(location-
based)2
37,104,776
7,185
Scope 2
(market-based)2
37,104,776
521
Scope 1 plus
Scope 2
location-based
64,646,976
13,065
Scope 1 plus
Scope 2
market-based
64,646,976
6,401
1: Includes natural gas, fugitive gases, petrol, diesel,
heating oil, and liquid gas.
2: Includes electricity, district heating and
district cooling.
Table 4 Summary of UK-only energy
consumption and carbon emissions – 2023
Scope
Energy
consumption
(kWh)
Emissions
(tCO2e)
Scope 1
27,520,134
5,791
Scope 2
(location-based)
30,081,394
6,681
Scope 2
(market-based)
30,081,394
535
Scope 1 plus
Scope 2
location-based
57,601,529
12,472
Scope 1 plus
Scope 2
market-based
57,601,529
6,326
Table 5 Summary of Group-wide energy
consumption and carbon emissions – 2024
Scope
Energy
consumption
(kWh)
Emissions
(tCO2e)
Scope 1
42,109,398
9,661
Scope 2
(location-based)
82,208,721
17,654
Scope 2
(market-based)
82,208,721
1,887
Scope 1 plus
Scope 2
location-based
124,318,119
27,315
Scope 1 plus
Scope 2
market-based
124,318,119
11,548
Table 6 Summary of Group-wide energy
consumption and carbon emissions – 2023
Scope
Energy
consumption
(kWh)
Emissions
(tCO2e)
Scope 1
42,550,684
9,067
Scope 2
(location-based)
71,580,985
16,935
Scope 2
(market-based)
71,580,985
3,915
Scope 1 plus
Scope 2
location-based
114,131,670
26,002
Scope 1 plus
Scope 2
market-based
114,131,670
12,982
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The table below shows Scope 3 emissions
for PPHE, AHG and the whole Group.
Table 7: PPHE Hotel Group Scope 3
emissions.
2024
2023
PPHE1
56,691
60,269
AHG2
18,053
16,730
Group
74,744
76,999
1: PPHE includes UK, Netherlands and Italy.
2: AHG includes Germany, Croatia, Austria, Hungary
and Serbia
Intensity ratios
The intensity ratios we calculated are
tonnes of CO2e/total revenue (£m) and
kgCO2e/ occupied room, both calculated
using market-based emissions for Scope 2.
The tables below present these ratios for
each country, with the exception of Italy
as art’otel Rome Piazza Sallustio is not
operational yet. Please note that figures
are rounded to one decimal place.
Table 8 PPHE’s carbon intensity metrics for
2023 and 2024 – UK
2024
2023
Scope 1 and 2
emissions
(tCO2e)
6,401.0
6,326.0
Revenue (£m)
301.0
282.6
tCO2e/£m
21.3
22.4
Rooms sold
1,208,901
1,126,037
kgCO2e/room
sold
5.3
5.6
Table 9 PPHE’s carbon intensity metrics for
2023 and 2024 – Netherlands
2024
2023
Scope 1 and 2
emissions
(tCO2e)
1,431.0
1,476.0
Revenue (£m)
66.2
63.3
tCO2e/£m
21.6
23.3
Rooms sold
339,560
322,607
kgCO2e/room
sold
4.2
4.6
Table 10 PPHE’s carbon intensity metrics for
2023 and 2024 – Croatia
2024
2023
Scope 1 and 2
emissions
(tCO2e)
1,882.0
3,282.0
Revenue (£m)
84.1
78.1
tCO2e/£m
22.4
42.0
Rooms sold
790,695
754,661
kgCO2e/room
sold
2.4
4.3
Table 11 PPHE’s carbon intensity metrics for
2023 and 2024 – Germany
2024
2023
Scope 1 and 2
emissions
(tCO2e)
698.9
1,144.1
Revenue (£m)
30.4
29.3
tCO2e/£m
23.0
39.1
Rooms sold
228,060
212,544
kgCO2e/room
sold
3.1
5.4
Table 12 PPHE’s carbon intensity metrics for
2023 and 2024 – Austria
2024
2023
Scope 1 and 2
emissions
(tCO2e)
236.2
200.3
Revenue (£m)
4.2
3.4
tCO2e/£m
56.2
59.5
Rooms sold
16,274
14,901
kgCO2e/room
sold
14.5
13.4
Table 13 PPHE’s carbon intensity metrics for
2023 and 2024 – Hungary
2024
2023
Scope 1 and 2
emissions
(tCO2e)
275.1
250.8
Revenue (£m)
5.3
4.4
tCO2e/£m
51.5
56.9
Rooms sold
44,597
31,166
kgCO2e/room
sold
6.2
8.0
Table 14 PPHE’s carbon intensity metrics for
2023 and 2024 – Serbia
2024
2023
Scope 1 and 2
emissions
(tCO2e)
623.1
304.0
Revenue (£m)
1.1
0.1
tCO2e/£m
560.7
4,438.3
Rooms sold
10,838
816
kgCO2e/room
sold
57.5
372.5
The tables above show improvements in the
intensity ratios for almost all countries year
on year. The exception is a small increase
seen for Austria, led by higher occupancy
and emissions, but lower revenues.
Significant reductions were achieved in
Croatia and Hungary, driven by the adoption
of renewable electricity contracts mid-2023,
as well as Germany. Although marginal, the
reductions in both ratios for the UK are
significant being it the largest region by
turnover for the Group. Finally, it is worth
noting that the changes in the ratios for
Serbia are largely due to Radisson RED
Belgrade being closed for renovations for
most of 2023, reopening in February 2024,
skewing emissions, revenues and occupancy.
Energy efficiency actions
In 2024, we have upgraded some of the
equipment in our hotels to achieve energy
efficiency gains, with the key improvements
made across our portfolio described in the
following paragraphs.
In various hotels in the UK and the
Netherlands, we have installed a new kitchen
extract control system, leading to 50%
energy savings in these areas. In Park Plaza
London Riverbank and Park Plaza London
Waterloo, we replaced old battery-operated
passive infra-red (PIR) sensors for guest
rooms with new generation wired sensors.
In Park Plaza London Riverbank,
we replaced Low Temperature Hot Water
(LTHW)circulation pumps with more
efficient, inverter-driven pumps and in
Park Plaza Victoria London, we installed
inverters on the LTHW and Chilled Water
(CHW)circulation pumps, with associated
energy savings of around 70–80%. In Park
Plaza London Westminster Bridge and Park
Plaza County Hall London, we replaced old
compressor-driven minibars with more
efficient thermoelectric ones.
We installed some water reduction
technologies as well, such as water saving
showers in Park Plaza London Westminster
Bridge, allowing us to save both water
and energy.
Quantification and reporting methodology
Our carbon footprint calculations were
conducted by Zero Carbon Services for
PPHE and Code Gaia for AHG, in line with
the GHG Protocol Corporate Accounting
and Reporting Standard. The following
paragraphs provide more detail on
the data collection processes.
Scope 1
Gas consumption data is obtained directly
through automatic meter readings. F-gas
leakage data is provided from our suppliers,
accounting for refills and amount of gas
recovered. The minimal amount of emissions
coming from company vehicles is calculated
based on the amount of fuel refills.
Scope 2
Electricity and district heating consumption
data is obtained directly through automatic
meter readings. For regions where we have
renewable energy contracts in place, an
emission factor of zero was applied to the
electricity consumption to calculate
market-based emissions.
Scope 3
Wherever possible, Scope 3 emissions were
calculated with the volume-based method
(over one third of the overall Scope 3
emissions). However, the majority were
calculated with the spend-based method
and small part through average data.
The table below presents more detail
on each emission category.
Category
Description
Calculation method
1. Purchased Goods
and Services
Data comes from our procurement system and it
is integrated with our financial accounting system
to ensure completeness and consistency.
F&B products:
volume-based
Non-F&B products
and services:
spend-based
2. Capital Goods
Data comes from the CAPEX reports of each
individual property.
Spend-based
3. Fuel- and Energy-
Related Activities
(FERA)
This is based on energy consumption captured
for Scope 1 and 2.
Volume-based
4. Upstream
Transportation and
Distribution
Not applicable to PPHE.
5. Waste Generated
in Operations
Data comes from reports shared by our waste
management suppliers.
Volume-based
6. Business Travel
Data comes partly from reports shared by our
travel agencies and partly from invoices,
depending on the provider.
Mix of volume- and
spend-based
7. Employee
Commuting
Calculations based on number of employees and
average emission factors for the areas in which
they are located.
Average data
8. Upstream
Leased Assets
Not applicable to PPHE.
9. Downstream
Transport and
Distribution
Not applicable to PPHE.
10. Processing of
Sold Products
The only input data for this category is that related
to cooking oil, which is sold to companies that then
recycle and repurpose it into new products.
Volume-based
11. Use of Sold
Products
Not applicable to PPHE.
12. End-of-Life
Treatment of Sold
Products
Not applicable to PPHE.
13. Downstream
Leased Assets
Not applicable to PPHE.
While we do have some downstream leased assets
(e.g., rented office and F&B areas), we are
responsible for paying the utility bills for these
assets, meaning that the associated emissions fall
into our Scope 1 and 2 and not Scope 3.
14. Franchises
We have two franchised properties in our
portfolio, Park Plaza Cardiff (Wales) and Park Plaza
Trier (Germany). Data for these calculations comes
from the utility reports received directly from
the hotels.
Volume-based
15. Investments
Not applicable to PPHE.
TCFD report– continued
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Report
Treat
Assess
Identify
Our risk management framework
R I SK- R EWAR D
STRATEGY
R I SK
GOVE R NANC E
R I SK
MANAG E M E NT
PROC ESS
R I SK
ASSU RANC E
Sets the tone for our strategic approach to
risk and articulates the general appetite to
risk-taking and tolerance.
Roles, responsibilities and reporting
structure are defined in a Risk Policy.
Current and emerging risk
identification, assessment, treatment,
reporting and monitoring.
Assurance that risks are both identified and well
managed is obtained from various internal and
external sources.
ST
R
A
T
E
GI
C
O
B
J
E
C
TI
V
ES
RI
S
K
IN
F
O
R
M
E
D
D
E
CI
SI
O
N
S
Our risk environment
In an ever challenging risk environment, our embedded
approach to risk management supports the delivery of our
strategic vision and priorities by ensuring decisions are
made, and opportunities are pursued, with a thorough
understanding of the threats we face.
Risk management
Principal risks – at a glance
We define our principal risks as those which could have the greatest impact on our business and represent the most significant threats to
the achievement of our objectives in the year ahead. To be considered a principal risk, the potential downside or residual impact must be
assessed as ‘Major’ or above, equating to a negative financial impact or falling asset values greater than 5% of annual EBITDA* (under normal
operating conditions).
Principal risks for 2025
Inherent risk
assessment
Residual risk
assessment
Trend from
previous year
Oversight
responsibility
Page reference
1
Adverse economic climate
High
High
CFO
Page 95
2
Cyber threat – undetected/unrestricted cyber security
incidents
Very High
High
CFO
Page 97
3
Funding and liquidity risk
High
Medium
CFO
Page 96
4
Data privacy – risk of data breach
Very High
Medium
CCLO
Page 97
5
Technology disruption – prolonged failure
of core technology
High
Medium
CFO
Page 97
6
Operational disruption
High
Medium
Co-CEO
Page 98
7
Market dynamics – significant decline in market demand
High
Medium
EVP
Commercial
Affairs
Page 95
8
Difficulty in attracting, engaging, and retaining a suitably
skilled workforce
High
Medium
Co-CEO
Page 99
9
Significant development project delays or unforeseen
cost increases
High
Medium
CCLO and
Co-CEO
Page 96
10 Negative stakeholder perception of the Group with
regard to ESG matters
High
Medium
CCLO
Page 99
11 Serious threat to guest, team member or third party
health, safety and security
High
Medium
Co-CEO
Page 98
Our Group-wide risk management
framework drives better decision
making through the proactive identification,
assessment and management of the
risks we face and emerging threats.
Our approach is well established and
continues to evolve to meet the needs
of the business and harness the input
from functional management, executive
leadership and the Board.
As we focus on unlocking growth from
our new hotel openings, our risk profile is
expected to shift focus throughout 2025.
As our inherent development project risk
should reduce as we deliver our latest
developments, addressing any threats
to the growth objectives of our existing
portfolio will be a priority, to ensure
we deliver operating efficiency
and performance.
Macroeconomic and geo-political
uncertainty remains a constant driver of
risk and is something that the Group has
demonstrated real resilience to in recent
years. The significant political change
across the globe in 2024 could see a pace
of change in global relationships, policies,
regulation and taxation throughout 2025
which could impact our markets, supply
chains and operations. Resilience to
challenging conditions continues to be a
priority with focussed cost management,
dynamic pricing strategies, technology
initiatives and new process efficiencies.
Horizon scanning for emerging threats
remains an important part of our risk
management approach. The evolution of AI
is presenting many opportunities for us to
improve the way we operate and meet the
needs of our guests. We continue to
embrace the use of new technologies while
introducing safeguards to mitigate any
associated risk.
Climate related risk is fully integrated
within our risk management framework.
Climate change is one of the drivers of
several existing principal risks. Our TCFD
report details our specific climate related
risks (See pages 85-86).
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Risk management – continued
Our risk-reward strategy
Our risk-reward strategy, which articulates our risk appetite across various business activities, is aligned to our strategic objectives. The
Board has reassessed the strategy and adjusted the risk appetite for Technology change and development to Active, indicating a more
proactive stance on adopting new technologies.
Risk appetite levels
Definition
Business activities
Strategic pillars
and enablers
Active
We will actively seek to take calculated risks in
this area in pursuit of our strategic objectives,
as long as the associated benefits significantly
outweigh the risk impact, and the risk remains
within our tolerances. We will apply appropriate
safeguards when pursuing these opportunities.
• Acquisitions and development
opportunities
• Technological change/development
Diversification of property
portfolio
Entrepreneurial, people-
oriented and creator culture
to underpin growth agenda
Neutral
We will take on a limited increased exposure to
risk in pursuit of our strategic objectives if the
associated benefits outweigh the risk impact
and the risk remains within our tolerances.
We will apply appropriate safeguards when
pursuing these opportunities.
• Development projects (construction)
• Working with third parties
• Funding
• Commercial and promotional activity
Non-dilutive capital approach
Destination led restaurant
and bar experience with
ambitious growth plans
Entrepreneurial, people-
oriented and creator culture
to underpin growth agenda
Averse
We will act to protect the business from
increased risk exposure in these areas.
• Environmental impact
• Responsible and ethical sourcing
• Human rights
• Operational continuity
• Health and safety
• Data privacy
• Compliance
• Financial and tax reporting
• Financial control
Meaningful ESG impact for
the benefit of all stakeholders
Guest satisfaction –
memorable and superior
guest experiences
Our risk governance and risk management process
Governance
Executive Leadership – Risk Forum
• Agree the Risk Policy and Framework and
formulate a risk-reward strategy (risk
appetite) for proposal to the Board.
• Challenge the robustness and
completeness of the full-year and half-year
updates to the Group’s risk registers,
including key actions.
• Report PPHE principal risks for Board
approval and inclusion in the Annual
Report.
• Ensure effective monitoring of emerging
risk and progress against key risk actions.
Audit Committee
• Keep under review the effectiveness of the
Group’s procedures for the identification,
assessment and reporting of risks, assisting
the Board in monitoring the Group’s risk
management systems.
• Oversee internal and external assurance
requirements.
ESG Committee
• Keep under review specific ESG and
climate related risk assessment.
Board
• Ultimately responsible for risk
management including approval of the
Group risk profile; the Group Risk Policy
and Framework; the risk-reward strategy;
and the statement on risk management in
the Annual Report.
Process
ENTERPRISE RISK ASSESSMENT
Consolidation of underlying functional and subsidiary risks into a single view of risk reported to the Board.
The enterprise assessment underpins the Group’s principal risk disclosure.
CURRENT RISKS
Existing threats to the achievement of our business objectives.
Regular risk updates from functional management to identify, assess and
respond to current risks. Key steps include the following:
• Assessment of the severity of each risk using the Group risk
assessment criteria. Consideration is given to the effectiveness of the
current controls/mitigating activity.
• Establishing clear actions with nominated accountability where further
mitigation is required to contain or reduce risks to a more acceptable
level.
• Regular risk reporting to Executive Leadership to support informed
decision-making and prioritisation of resources.
• Reporting the enterprise risk profile to the Audit Committee quarterly.
EMERGING RISKS
Future threats that cannot be accurately assessed at the current time
but could have a material impact on the business in the future through
either heightening existing risks or becoming new stand alone risks.
Horizon scanning for emerging risk is considered at each functional
risk workshop and each Executive Level Risk Forum with a view to
improving our response plans and exploiting potential opportunities.
Emerging risk trends are reported alongside the current enterprise
risk assessment to the Audit Committee quarterly.
When identifying emerging risk, we consider several drivers of
change, including:
• shifts in market dynamics;
• social, geo-political, macro-economic and environmental factors;
• technological trends; and
• legal and regulatory developments.
FUNCTIONAL AND SUBSIDIARY RISK ASSESSMENTS
Management identifying, assessing and managing the risks and controls across all business functions.
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So
cia
l, G
eo
-p
olit
ica
l,
Ma
cro
-ec
on
om
ic,
En
vir
on
me
nta
l
Ma
rk
et
Te
ch
nol
og
y
Fin
an
cia
l, L
eg
al a
nd
Re
gu
lat
ory
Emerging threats
and risk drivers
Market demand influenced by
increasing guest/consumer concern
regarding environmental factors1
Anti-tourism sentiment in parts
of Europe
Increasing aviation costs impacting
inbound demand
Acceleration of climate
related regulatory change
Increased carbon pricing
on raw materials
Tax increases
Uncertainty of cost and
availability for refinancing debt
Rising sustainability regulations
dampening property values3
Rapidly changing technology
environment and increasing influence
of Artificial Intelligence on business2
Evolving cyber threat –
increasingly sophisticated
threat vectors
Economic pressures –
Trade disputes, inflation,
interest rate and market volatility
Escalation of ongoing
geo-political tension and conflicts
Political change/instability
Social inequality/unrest
Increasing severe
weather events
Climate change crisis
Bio-diversity crisis
Risk management – continued
Principal risks
The tables below detail our principal risks for the year ahead. The reported risks are those we consider could have the greatest impact
on our business and represent the most significant threats to the achievement of our objectives. This is 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. Our 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.
Strategic blocks
Sources of value
1 Core, upper upscale, city centre hotels
4 Diverse prime property portfolio
7 International network
2 Leisure and Outdoor Hospitality
5 Multi-brand approach
8 Our people and culture
3 Hospitality management platform
6 In-house hospitality management platform 9 Financial strength and non-dilutive capital approach
Movement from last year:
Unchanged
Increased
Reduced
Market and Macro-economic Environment
Risk appetite: Not applicable
Principal risk description
Residual risk
Outlook and risk response for 2025
Adverse economic climate
Economic stress fuelled by the volatile geo-political
environment could mean a continuation of steep
inflation and unstable interest rates impacting
growth and profit margins.
Related strategic blocks:
1, 2, 3
Related sources of value:
7, 8, 9
High
An unfavourable economic climate poses a significant and persistent risk to the
achievement of our objectives. Numerous factors are expected to drive this risk in
2025, including geopolitical instability, trade disputes and regional tensions that are
influencing the global macro environment.
Despite challenging conditions, our robust business model means we are equipped
to achieve success and unlock growth.
Over the course of 2025 we will closely observe economic trends and respond as
needed to protect our business.
Our approach includes:
• Enhanced budgeting and forecasting methods
• Active pursuit of efficiencies through the introduction of new technologies
• Continued focus on cost management
• Agility in our strategic planning
Market dynamics – significant
decline in market demand
Uncertainty in future market demand could arise
due to volatile macro-economic or geo-political
conditions, or significant incidents which impact
global travel.
Related strategic blocks:
1, 2, 3
Related sources of value:
4, 5
Medium
While an uncertain macro-economic and geo-political climate can present market
challenges in 2025, we will benefit from unlocking the growth potential of our recent
investments and our proven ability to adapt to changing market conditions, through
for example changing our market segmentation or geographic areas of focus.
We are also focussed on areas of opportunity such as growing contracted business
and Groups and Meetings & Events bookings.
We strive to drive demand, grow occupancy and maintain strong average room
rates* through a range of key process enhancements, and commercial initiatives:
• AI enabled revenue management and pricing systems
• New AI enabled technology for guest interactions
• Focussed promotional initiatives to drive demand in advance and tactical
campaigns for ‘need’ periods
• Partnerships and promotional opportunities with third party distribution
partners and booking channels
• Close collaboration with Radisson Hotel Group and leveraging their reach
for promotional campaigns
• Radisson Rewards programme which consists of 20+ million members.
• Focus on digital marketing and online advertising and customer acquisition
• Planned activities across key source markets and market segments,
including tradeshows, hosted events and sales missions
• Guest experience focused initiatives and brand audit programmes to
ensure brand consistency
• Ancillary revenue growth through online and pre-stay upselling initiatives,
gift card sales and other commercial programmes
Imminent/short time horizon
Some Impact already seen or
impact to our business could
be expected within 2 years
Future time horizon
Impact to our business
could be expected
beyond 2 years
Emerging risk
Our Executive Leadership Team considers emerging threats and risk drivers that could
have a material impact on the business in the future, with a view to improving our response
plans and exploiting potential opportunities. The near-term threats may already influence
our principal risk assessments and the prioritisation of our risk actions.
Related opportunities:
1 The delivery of our ESG strategic objectives relating to sustainability (see page 70) could contribute to improved market demand
2 There are opportunities to improve the delivery of our guest experience and our overall performance through the early adoption of new technologies
3 There is opportunity to enhance asset values by meeting the highest standards for sustainability in our properties
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Risk management – continued
Funding and Investment
Risk appetite: Neutral
Principal risk description
Residual risk
Outlook and risk response for 2025
Funding and liquidity risk
The impact of failing to proactively manage funding
and liquidity risk could include a breach of debt
covenants, cash restrictions, loss of stakeholder
confidence and less favourable terms when
refinancing in the future.
Related strategic blocks:
1, 2
Related sources of value:
7, 9
Medium
In the environment of fluctuating interest rates and economic uncertainty, our
funding and liquidity risk is managed to an acceptable level through stringent
oversight controls, coupled with our successful trading performance and solid
property valuations. We also increase certainty through fixed rates on most loans.
This risk and the parameters of our associated risk appetite will be closely
monitored as we approach 2026 when refinancing is due for several loans.
Our key treasury monitoring and reporting controls include:
• Board approved treasury policy
• Monthly forward covenant testing
• Monthly treasury monitoring and reporting to the Board
• Proactive and regular liaison with our lenders
Development Projects
Risk appetite: Neutral
Principal risk description
Residual risk
Outlook and risk response for 2025
Significant development project delays or
unforeseen cost increases
Various factors, such as supply chain disruption,
labour market pressures and steep increases in
cost of materials can influence the delivery of
major construction projects, resulting in additional
cost or delays in new openings.
Related strategic blocks:
1, 2
Related sources of value:
4, 7
Medium
While this risk area will continue to be of importance, it is anticipated to decrease in
the short term with the completion of the art’otel London Hoxton and art’otel Rome
Piazza Sallustio projects.
Our assessment is reviewed frequently and could increase again as we embark on
new development opportunities.
The risk continues to be managed through the focused oversight of senior
leadership and our in-house Technical Services team, with well-established project
management controls including:
• Regular project meetings with our contractors to identify and tackle any
approaching issues which could impact the overall cost, targeted delivery
schedule or the expected quality standards
• Independent monitoring of projects by appointed third party experts
Technology and Information Security
Risk appetite: Averse
Principal risk description
Residual risk
Outlook and risk response for 2025
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, reputation loss and significant
fines in the event of a related data breach.
Related strategic blocks:
3
Related sources of value:
6
High
This year we have increased our assessment of this risk to reflect the constantly
evolving challenge of combatting cyber threats.
Although we have bolstered our defense mechanisms and monitoring capabilities
to their strongest levels yet, we recognise the increasingly sophisticated nature
of these attacks. This keeps cyber risk as one of the most prominent threats
to our business and a key priority for our risk mitigation efforts.
Where possible we aim to reduce the risk through solidifying our established
controls and implementing new defence and response mechanisms.
Key actions include:
• Aligning security controls with the changing technology
infrastructure landscape
• Compliance to the official Payment Card Industry Data Security
Standard (PCI DSS)
• AI powered network monitoring & detecting and autonomously
responding to threats
• Continuous vulnerability scanning and remediation
• Enhanced back-up and recovery solution, including ransomware recovery
• Focused team member awareness campaigns and training programmes,
including the responsible use of AI in business
• Targeted phishing training
• Enhanced filtering of malicious phishing sites
• Penetration testing programme
• Targeted risk analysis/profiling and security incident tabletop exercises
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:
3
Related sources of value:
6, 8
Medium
Managing data privacy risk is a high priority for our business. Safeguarding the
information of our guests and team members remains a core commitment.
Our key mitigating controls include:
• Centralised records of personal data processing activity maintained within
a data protection and information security platform.
• Internal awareness campaigns and training programmes
• Documented data protection and privacy procedures
• Monitoring of databases containing Personally Identifiable Information, with
data owners
• Renewing and updating data privacy risk assessments and other
documentation required under GDPR
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:
3
Related sources of value:
6
Medium
As we actively seek opportunities to enhance performance by integrating new
technology into our business, we remain dedicated to safeguarding the robustness
of our technology infrastructure and ensuring the uninterrupted delivery of our
services.
In 2025 our technology strategy includes crucial projects that will enhance our
long-term resilience, including:
• Transitioning to cloud services with a top-tier provider for our core
infrastructure
• Redesigning and implementing a new back-up and recovery solution
alongside the move to cloud services
• Upgrading to a new Property Management System
• Enhancing network monitoring and vulnerability scanning capabilities.
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Financial Statements
Appendices
Risk management – continued
Safety and Continuity
Risk appetite: Averse
Principal risk description
Residual risk
Outlook and risk response for 2025
Operational disruption
Major global events such as pandemic, war
or environmental disasters could result in
widespread disruption, impacting our guests,
our supply chain and our hotel operations.
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 or terrorism.
Related strategic blocks:
3
Related sources of value:
6, 8
Medium
We are dedicated to protecting our operational capabilities and ensuring the
stability of our services, supply chains, and vital hotel management and reservation
systems to deliver a seamless guest experience.
Our mitigation of this threat includes:
• Established crisis management plans and procedures
• Regular crisis management training for management and team members
• Relationship management with key suppliers and partners to identify and
mitigate any potential issues which could impact the continuity of their
service
• Business continuity planning to prepare proportionate responses to the
most significant threats which could impact the continuity of our critical
services and operations
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:
3
Related sources of value:
6, 8
Medium
To ensure a high level of health, safety and security for our guests, and to maintain a
secure working environment for our team members, we have an established and
comprehensive system of controls supported by external experts which includes:
• Regular risk assessments including those specific to large events
• Security and fire safety procedures
• Health & Safety audit programmes
• In-house and supplier food safety audit programmes
• Team member training programmes
• Mental health and wellbeing training
• Centralised incident reporting
• Proactive gathering of intelligence and advice on potential security risks
through regular liaison with local police and security services
People
Risk appetite: Averse
Principal risk description
Residual risk
Outlook and risk response for 2025
Difficulty in attracting, engaging and
retaining a suitably skilled workforce
Difficulties in maintaining an engaged and
suitably skilled workforce could impact our
service standards, drive up operating costs,
disrupt operations and impact the overall delivery
of our key strategic objectives.
Related strategic blocks:
3
Related sources of value:
6, 8
Medium
We are continually striving to address the challenge of recruiting, developing, and
keeping skilled team members within our organisation.
Our team members are crucial to our success, so we adopt a proactive and
continuous management strategy to address this risk, including:
• Employee experience programmes focused on employee needs and the
delivery of group initiatives for developing retention, wellbeing, and
engagement
• Employer value proposition development to attract candidates and drive
retention
• Learning & Development programmes with focus on technical skills and
management development
• Internal communication strategy and use of related technologies for
employee voice enablement
• Talent management and succession planning to promote intra-company
mobility options
• Regular talent reviews and learning need analysis
• Physical health and well-being initiatives
• Further development of the HR technology landscape
Environmental, Social and Governance
Risk appetite: Averse
Principal risk description
Residual risk
Outlook and risk response for 2025
Negative stakeholder perception of the
Group with regard to ESG matters
With ESG being a key concern for our
stakeholders, a perception that the Group does
not apply best practice corporate governance
principles, 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.
A failure to comply with the upcoming regulatory
changes to governance and ESG reporting could
further heighten this area of risk.
Related strategic blocks:
1, 2, 3
Related sources of value:
8
Medium
ESG continues to be an important factor in shaping our strategic direction. Our ESG
strategy is designed to meet our stakeholders’ expectations, with its implementation
led by our ESG Manager, and overseen by the Chief Legal & Corporate Officer.
Our report on pages 68 to 83 details our ESG strategic objectives. The ESG
Committee is charged with the Board’s task of monitoring the Group’s progress
against these objectives.
We address this risk area through various channels and programmes:
• ESG strategy (aligned to Radisson Hotel Group’s Responsible Business
Programme).
• Externally certified performance against recognised standards, e.g. Green
Key.
• Initiatives to reduce energy consumption in our properties.
• Property sustainability certifications e.g. BREEAM (Building Research
Establishment Environmental Assessment Methodology)
• Member of Zero Carbon Forum
• Member of the Energy & Environment Alliance
• CDP independent environmental disclosures and Workforce Disclosure
Initiative (WDI) reporting
• Regular social media communications about ESG strategic approach,
priorities and initiatives
PPHE Hotel Group
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Financial Statements
Appendices
Viability statement
A
fter a strong recovery in 2023,
the Group’s primary focus in
2024 was on opening its largest
hotel development pipeline in
history and rebuilding EBITDA
margins* across its current estate. Despite
significant increases in minimum wage
across the Group’s operating regions,
Like-for-like* EBITDA margins* improved
by 160 basis points to 32.5%. Projected
minimum wage increases in 2025 continue
to outpace inflation rates in our territories,
and these expectations have been
incorporated into the Group’s targets
and strategy for the upcoming year.
Throughout the year, central banks
globally began reducing interest rates
from previously high levels not seen since
the Global Financial Crisis. These reductions
have moderated pending outlooks on future
inflationary conditions. The Group’s loan
portfolio is largely protected from rising
interest rates as most loans have fixed
interest rates, with the first major
refinancing scheduled for 2026, which will
be touched on later in this statement.
To evaluate the Group’s viability, the Board
conducted a thorough assessment of both
current and emerging risks that could
impact the Group’s strategy, performance,
and liquidity. This assessment included
detailed cash flow projections for the
three-year period ending 31 December
2027, based on both base case and
downside case scenarios.
Our base case scenario starts with the actual
results of 2024, projecting growth consistent
with or exceeding estimates published by STR.
Revenue forecasts for 2025 above STR
estimates are attributed to specific sales
strategies. EBITDA* forecasts account for the
elevated minimum wage increases and other
inflationary cost impacts. For 2026 and
beyond, we anticipate a 2.5% EBITDA* growth
and further stabilization of our recently
opened hotels. Debt service is modelled in
line with current banking agreements and
refinance assumptions take into account
the elevated rates of interest currently in
the market.
The downside case assumes a 15% reduction
in EBITDA* compared to the base case each
year, potentially due to prolonged declines
in room rates and their effect on profit
conversion. Both scenarios carry a high
degree of uncertainty given the extended
forecast period beyond current booking
lead times.
The downside case does not necessitate
covenant waivers or mandatory loan
prepayments. Furthermore the downside
scenario is not expected to trigger cash
traps under existing loan agreements.
However, if required, the Group’s available
cash resources are sufficient to continue
without restructuring measures.
In 2024, the Group refinanced its existing
loan with Aareal Bank AG early to benefit
from the inverted interest curve at the
original maturities. The refinanced loan
comprises €160,000,000 and £16,000,000
tranches, extending the original 2016 facility
maturity from June 2026 to June 2031. The
Group is in discussions with the current
lender on a £35 million facility maturing in
June 2025 and the Board is confident of
the Group’s facility to refinance.
In 2026, three further loan facilities
are maturing, totaling approximately
£200 million. In 2022, the Group entered
into a forward-starting hedge totaling
around £100 million for one of the maturing
facility, fixing the interest rate for five years
post-2026 at rates substantially lower that
the current market rates. Given our
strong relationships with our lenders, the
relatively low LTV* levels (below 50%) of the
remaining loans up for refinancing, the
substantial headroom expected in debt
service covenants and the forward hedging
in place the Board is confident in successful
refinancing in both the base and downside
scenario. Refinancing is assumed at the
current levels of market interest rates.
Having reviewed both base and
downside scenarios, the Directors have
determined that the Group is likely to
continue operations over the review period
without further protective operational
measures. The Group’s viability does not
rely on additional liquidity and it maintains
strong cash flow generation. The Board
concludes that a three-year timeframe is
appropriate for assessing the Group’s
longer-term viability, given the significant
new pipeline ramping up within this period.
The Board continuously monitors both the
base case and downside case cash flow
forecasts, considering different trading
assumptions and the Company’s long-term
strategy. These considerations underpin
the Board’s evaluation of the Group’s
viability through 31 December 2027, taking
into account the Group’s current position,
principal risks, and management strategies
detailed in the Strategic Report, Group
Strategy, and financial plans and forecasts.
Based on this assessment, the Directors
confirm they reasonably expect the Group
will continue operations and meet its
obligations as they come due over the
three-year period to 31 December 2027.
Introduction to governance
Letter from the Chairman
I am pleased to present the corporate governance report
for the year ended 31 December 2024.
I
was pleased to be appointed Chairman of the Board
on 9 January 2025, succeeding Eli Papouchado
("Papo") following his decision to step aside. I am
thankful to the Board for their trust in me and look
forward to engaging with all stakeholder groups.
Board engagement with stakeholders
is a key priority. I am the designated
Board member responsible for workforce
engagement. The report sets out
shareholder and workforce engagement
activities throughout the year.
There have been changes to the
composition to the Board in January 2025,
immediately after the end of the financial
year on which we are reporting. I have
succeeded Eli Papouchado as Chairman,
and Eli has also stepped down as a Director,
to be replaced by Roni Hirsch as a new
Non-Executive Director.
This corporate governance report
therefore sets out:
• Our approach to compliance with
and application of the principles
and provisions of the Code; and
• the outcomes of our externally conducted
Board evaluation and resulting actions.
Leadership role
Our independent Non-Executive Directors
have a range of expertise and experience
across different sectors. Our Board
leadership combines expertise in real-estate,
accountancy, financial controls and
corporate governance. We maintain a
framework of prudent and effective controls
against risk. I refer you to the Strategy Report
to see the consistent success in delivering
against strategic objectives in a challenging
business and financial environment. Our
pages on risk management detail the control
framework for key strategic risks to the
business. Risk and opportunity also form part
of our disclosures on carbon related matters,
where the emphasis is on the risks posed by
carbon emissions and climate change to the
business, as well as the new opportunities
created for the business by change. Our
disclosures on those pages set out our vision
for long-term, sustainable success which
positively contributes to environmental
performance and society as a whole.
In 2024, we repeated our annual Board
Strategy Day. This is a deep-dive into
strategic leadership and initiatives, and the
outputs of the Strategy Day feed into the
Executive Leadership Team.
Board evaluation
Our three-year cycle of Board evaluations
required an external review of the Board
and its Committees in 2024. This was
conducted by Independent Audit Limited.
In the two years following each independent,
external review, the Board conducts an
in-house review annually. The internal
reviews update on the previous external
assessment and ensure that there is an
annual review to keep the Board effective
and fit for purpose. The review is designed
to look at the performance of the Directors,
both individually and collectively, and
present an assessment of the Board and
its Committees. Please see page 113
for details of the review.
Board composition
Following changes to the Board in 2022 and
2023, 2024 was a year of stability in terms of
Board composition, with no arrivals or
departures to report. Each Director is
subject to annual election by shareholders.
Board composition remains a live issue for
the Nomination Committee and the Board as
a whole, as we are not yet compliant with the
Financial Conduct Authority UK Listing Rules
(and FTSE Women Leaders Review) targets on
“My responsibility is to ensure
that the entrepreneurial
executive leadership team
is matched on the Board by
diverse viewpoints.”
Ken Bradley
Chairman of the Board of Directors
PPHE Hotel Group
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Financial Statements
Appendices
PPHE Hotel Group
Annual Report and Accounts 2024
100
gender balance. These targets are
incorporated into the ongoing maintenance
of a succession plan for Board members,
which is a delegated responsibility of the
Nomination Committee. Please see the report
at page 119.
The changes in Board composition as of
9 January 2025 are as follows:
(1) Eli Papouchado no longer sits on the
Board;
(2) Yoav Papouchado is no longer Alternate
Director;
(3) Ken Bradley succeeded Eli Papouchado
as non-executive Chairman; and
(4) Roni Hirsch was appointed as non-
executive director. Roni Hirsch is not
independent.
ESG
Our targets on ESG are set out on pages
68-89 and are a vital part of our strategy.
ESG is subject to Board oversight, and the
Board maintains the ESG Committee in
order to take responsibility for oversight
on delivery against our strategic objectives.
We have taken important steps forward in
2024, with details to be found on page 67.
Looking ahead to 2025, it is once again time
to conduct a double materiality assessment
for ESG in order to ensure that our strategy
remains fit for purpose. The last materiality
assessment was conducted in 2022, and it
follows a three-year cycle. This will refresh
our understanding of stakeholder priorities
for ESG.
Shareholder engagement
The Co-CEOs, the CFO as well as the Board
more generally, and other members of the
Executive Leadership Team, seek to make
themselves available to shareholders on an
ongoing basis. They also maintain a calendar
of shareholder engagement events, including
investor roadshows, which are led by
the Chief Financial Officer, Co-CEO and
Executive Vice President Commercial
Affairs. Investor engagement is also a
priority at the announcement of our annual
and half-yearly results. We are grateful
to our shareholders for their active
engagement, and their support for our
strategy as a whole.
Nigel Keen, our Senior Independent
Director, and I in particular, wish to
emphasise the availability of the Board to
shareholders at all times for frank
discussion. As part of his role as Senior
Independent Director, Mr Keen meets with
shareholders as and when requested.
Workforce engagement
The Board is committed to engaging with our
people, and strive for opportunities to seek
feedback from them. I am the designated
Director responsible for workforce
engagement.
Our people are stakeholders critical to our
success as a dynamic growing business.
Our people have first hand knowledge of
our business and direct contact with key
stakeholders, such as customers and
suppliers and third party intermediaries
and their input can contribute to strategic
decision making of the Board to make PPHE
Hotel Group Limited a better company over
the medium term.
Workforce engagement allows Non-
Executive Directors to be better equipped
with knowledge of employee views so
insightful discussions with the Executive
Directors can take place, ensuring diversity
of thinking in decision making. Further
details of workforce engagement are found
on page 113.
Conclusion
Good corporate governance is the basis of
long-term, sustainable value creation, and
ultimately, the key to securing the confidence
our investors have shown in us. It is with this
attitude that we look forward to 2025 and
expanding our ESG reporting in particular.
In this area, as with the fundamental KPIs of
the business as a whole, we are going from
strength to strength.
Ken Bradley
Chairman of the Board of Directors
Introduction to governance – continued
Statement of Compliance
For the year ended 31 December 2024,
the Board believes that the Company has
applied all the principles of, and complied
with all provisions of, the Corporate
Governance Code 2018 (‘Code’), except
as set out in this governance statement
as required by the Financial Conduct
Authority’s (FCA’s) UK Listing Rules (which
include the ‘comply or explain’ requirement).
We comply with corporate governance
requirements pursuant to the FCA’s
Disclosure Guidance and Transparency
Rules by virtue of information included in the
governance section of this Annual Report.
The relevant documents can be found
online at:
• frc.org.uk, for the Code; and
• handbook.fca.org.uk, for the FCA’s
Disclosure Guidance and Transparency
Rules sourcebook as well as the UK
Listing Rules.
Companies Act 2006 s.172
As a matter of good corporate
governance, as Directors of PPHE Hotel
Group, we make this statement required
as by Section 172 of the UK Companies Act
2006 and the Financial Reporting Council
Corporate Governance Code 2018
(although the Company is Guernsey-
incorporated and, as such, the Companies
Act 2005 has no legal effect).
Each Director of PPHE Hotel Group listed
on pages 104 and 105 understands their
duties, and acts in a way that, in their
judgement, promotes the success of the
Company for the benefit of all stakeholders,
with due regard for the varying interests of
different stakeholder groups. The duties of
the Directors of the Company, separately
and collectively, include a duty to identify
and engage with identified stakeholder
groups and ensure that the interests of
those groups are taken into account in
decision-making. Decisions shall incorporate
input from identified stakeholders and be
taken with due regard and consideration for
the likely impact on them.
The Board’s decisions are guided by what
is most likely to promote the success of the
Company in the long term through creating
sustainable value for shareholders and
contributing to wider society as a whole.
We report in detail on our stakeholder
engagement activities in the Stakeholder
engagement section (page 64).
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
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Corporate Governance
Financial Statements
Appendices
Board of Directors as at 31 December 2024
Kenneth Bradley
Non-Executive Chairman1
C
Nigel Keen
Non-Executive Director &
Senior Independent Director
C
Stephanie Coxon
Non-Executive Director
C
Marcia Bakker
Non-Executive Director
C
Roni Hirsch
Non-Executive Director
Appointed January 2025
Eli Papouchado
Non-Executive
Chairman
Yoav Papouchado
Alternate Director to
Non-Executive Chairman
Eli Papouchado
As Founder Eli has been
Chairman of the Group since
its formation. He has a wealth
of experience spanning decades
in the construction, design,
development, financing,
acquisition and management
of hotels.
Eli has been a major contributor
to growth and successful
delivery of over £1 billion in
hotel assets.
Eli Papouchado stepped down as
Chairman and as a member of
the Board on 9th January 2025.
External appointments:
N/A
Board Committees:
N/A
Independent: No
Year of first appointment:
2007
Yoav Papouchado, Chairman
of Red Sea Hotels Limited
(‘Red Sea’), PPHE’s controlling
shareholder, has over 30 years
of experience of real estate
developments and data centres
worldwide, developed through
his long tenure at Red Sea.
Yoav is also a member of the
Supervisory Board, and Deputy
Chairman of the Supervisory
Board of Arena Hospitality
Group, the Company’s
subsidiary listed on the
Zagreb Stock Exchange.
As alternate Director for Eli
Papouchado, Yoav’s position
terminated on 9th January
2025, when his principal retired
from the Board.
External appointments:
Chairman, Red Sea
Hotels Limited; President, Gear
Construction;
Deputy President of the
Supervisory Board, Arena
Hospitality Group.
Board Committees:
N/A
Independent: No
Year of first appointment:
2020
Ken joined the Board as a
Non-Executive Director in
September 2019. His role is
supporting governance in
order to ensure independence
in governance and oversight.
Ken spent over 20 years with the
Royal Bank of Scotland Group in
a range of management roles,
with a focus on corporate and
institutional banking and risk.
Ken spent eight years at Barclays
Wealth, where he led the banking
and trust business in Guernsey
and had wider fiduciary banking
responsibilities in other locations.
Ken has an MBA from Warwick
Business School and has
completed the Institute of
Directors certificate and diploma
in Company Direction.
1Ken’s title throughout 2024
was Non-Executive Deputy
Chairman. This changed on
9th January 2025, when he
succeeded Eli Papouchado
as Non-Executive Chairman.
External appointments:
Director of a private fiduciary
company and a small Finance
Company
Board Committees:
Nomination Committee (Chair),
Audit Committee2,
Remuneration Committee, ESG
Committee2 In accordance with
provision 24 of the Code,
Ken Bradley will not sit on the
Audit Committee in 2025.
Independent: Yes
Year of first appointment: 2019
Nigel joined the Board as a
Non-Executive Director in
February 2020. As Senior
Independent Director, Nigel has
responsibility for assessing the
role of the Chair, for acting as an
independent sounding-board for
the other directors, and leading
their effective communication
and governance of the Company.
He is also an important
communication channel
for shareholders.
He is a qualified Chartered
Surveyor, with over 35 years
of property expertise from site
acquisition through to asset
management.
Nigel headed up the property
teams at Tesco where he became
Construction Director, and The
John Lewis Partnership, where
he was Property Director, and
served on the Waitrose Board.
Nigel is a Non-Executive Director
of the construction company
RG Carter.
He is also Deputy Chairman at
the Maudsley Mental Health
Charity.
External appointments:
Non-Executive Director, RG
Carter; Deputy Chairman,
Maudsley Mental Health Charity
Board Committees:
Nomination Committee, Audit
Committee, Remuneration
Committee (Chair)
Independent: Yes
Year of first appointment:
2020
Stephanie joined the Board as
a Non-Executive Director in
August 2020.
She is a qualified chartered
accountant, with over 15
years of capital market
expertise. Stephanie was a
Capital Markets Director at
PwC, where her role included
advising asset managers on
listing investment funds and
real estate investment trusts
(UK, Guernsey and Jersey) on
the London Stock Exchange.
She also advised on ongoing
obligations, corporate
governance, accounting
policies and reporting
processes.
Stephanie chairs the
Audit Committee
External appointments:
Non-Executive Director on:
Apax Global Alpha Limited,
FGEN Environmental
Infrastructure Limited,
International Public
Partnerships Limited.
Board Committees:
Nomination Committee, Audit
Committee (Chair),
Remuneration Committee, ESG
Committee
Independent: Yes
Year of first appointment:
2020
Marcia joined the Board in
December 2022. She is a
certified public accountant with
over 20 years of experience in
audit, finance, executive search
and leadership advisory. She has
a broad background in finance,
with a speciality in financial
reporting, and was part of the
IFRS and Financial Instrument
competence centre at KPMG.
During the last ten years, she
has combined her finance
background with executive
search and succession planning
for various corporate clients.
Marcia chairs the
ESG Committee
External appointments: N/A
Board Committees:
Audit Committee, Nomination
Committee, Remuneration
Committee, ESG Committee
(Chair)
Independent: Yes
Year of first appointment:
2022
Roni was appointed to the Board
on 9th January 2025, and so was
not serving as a Board director
in 2024.
Roni serves as the Chief
Executive Officer of the Red Sea
Group the Company’s major
shareholder, a role he has held
since 1993. Red Sea is controlled
by Eli Papouchado, who, together
with his family trusts, owns
32.93% of the voting rights in the
Group. Roni is a CPA, with a B.A.
in Accounting and Economics
from Tel Aviv University.
External appointments:
CEO Red Sea Group
Board Committees:
N/A
Independent: No
Year of first appointment:
2025
Boris Ivesha
President & Co-CEO &
Executive Director
Greg Hegarty
Co-CEO & Executive
Director
Daniel Kos
Chief Financial Officer &
Executive Director
Boris has been President of the
Group since 1991. He brought the
Park Plaza brand to the Group in
1994 in collaboration with the Red
Sea Group, and has been the
major influencer in expanding the
Group’s portfolio over the years.
Boris has over 50 years of
experience in the hotel industry.
Boris is the Chairman of the
Supervisory Board of the Arena
Hospitality Group.
External appointments:
Chairman of the Supervisory
Board of the Arena Hospitality
Group
Board Committees:
N/A
Independent: No
Year of first appointment:
2007
Greg is responsible for
leading the Group’s strategy,
operations, and commercial
performance across its regions,
driving growth, innovation, and
operational excellence.
Greg has held senior leadership
roles at global brands such as
GLH Hotels and BDL Hotels. He
holds a Master’s Degree in
Business Administration (MBA)
and is a Fellow of the Institute of
Hospitality. In recognition of his
contributions to the industry, he
was awarded Freedom of the City
of London and is also a Master
Innholder, reflecting his
commitment to excellence.
Greg’s strategic vision and
commercial acumen have been
instrumental in positioning the
Group as a leader in hospitality.
External appointments: N/A
Board Committees:
N/A
Independent: No
Year of first appointment:
2023
Daniel has worked with the
Group for over ten years of
which the last five years have
been as Chief Financial Officer
and Executive Director.
As Chief Financial Officer, Daniel
is responsible for the Group’s
finance, IT and procurement
strategy. Daniel has over 20
years of finance experience in
the field of audit and corporate
finance and has been involved
in several large complex M&A
deals, large (re)financing
projects and several
transactions on the public
markets in London and Zagreb.
External appointments: N/A
Board Committees:
N/A
Independent: No
Year of first appointment: 2018
Board and Committee membership
Audit
Committee
ESG
Committee
Nomination
Committee
Remuneration
Committee
C
Chair
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
104
105
Strategic Report
Corporate Governance
Financial Statements
Appendices
Executive Leadership Team
The Co-CEO Greg Hegarty
chairs a monthly meeting
of our Executive
Leadership Team.
The Executive Leadership Team
is composed of the Senior Vice
Presidents of the Company,
and manages day-to-day
operations of the Group’s
businesses, under the
supervision of the Board.
The Board maintains a schedule
of matters reserved to the
Board, and sets the financial
parameters of the Executive
Leadership Team’s activities.
Executive Leadership
Team remit:
•
Recommendations to
the Board for strategic
priorities, and formulation
of forward-looking strategy.
•
Design, construction and
maintenance of our
portfolio of properties.
•
Performance management
through KPIs, strategic
objectives and budget.
•
Health, safety and security.
•
Customer engagement,
product development and
brand standards.
•
Asset management and
capital investment
(within parameters
set by the Board).
•
Procurement and cost
efficiency.
•
ESG.
•
Reputation and
stakeholder management.
•
Risk management.
•
People, culture and values.
•
Talent and succession.
•
Information technology
and cyber.
Inbar Zilberman
Chief Corporate
& Legal Officer
Robert Henke
Executive Vice President
Commercial Affairs
Daniel Pedreschi
Executive Vice President
Operations, UK
Michelle Wells
Executive Vice President
Operations, the
Netherlands & Italy
Inbar is a key member of the
Executive Leadership Team and
PPHE’s C-Suite and she joined
PPHE Hotel Group in 2010. Inbar
heads the Group’s expansion
and development team as well
as leading and managing its
multi-jurisdictional legal,
corporate finance, M&A,
Corporate Governance,
insurance, compliance,
and ESG functions.
Inbar brings expertise
in negotiations and deal
execution, from exploring,
identifying and negotiating
new projects in the Group’s
regions of operation, to deal
structuring, financing and
planning, strategy and
construction set-up.
Prior to joining the Group, Inbar
was in the corporate finance
team at the law firm Berwin
Leighton Paisner LLP (now Bryan
Cave Leighton Paisner LLP) in
London and formerly a partner
at the law firm Bach, Arad,
Scharf & Co. Inbar holds an LLB
from Tel Aviv University and an
LLM from LSE. She is a qualified
solicitor in England, Wales
and Israel.
Boris Ivesha
President & Co-CEO &
Executive Director
Daniel Kos
Chief Financial Officer &
Executive Director
Greg Hegarty
Co-CEO & Executive
Director
Robert is Executive Vice
President Commercial Affairs for
PPHE Hotel Group and oversees
all commercial activities (including
Sales, distribution, Reservations,
Customer Service, Revenue,
Digital Marketing and CRM) as well
as Brand Marketing, Guest
Experience and Communications
(including brand strategy, brand
development, management of the
Group’s strategic partnership
with the Radisson Hotel Group
and corporate communications).
He has more than 20 years’
experience in international
hospitality and first joined the
Group in 2001, when he was
involved in the opening of the
Group’s hotels in the United
Kingdom and the successful
implementation of Radisson Hotel
Group’s marketing programmes
and systems. He re-joined the
Group in 2007 and since then
has significantly developed
the central commercial
organisation, creating and
leading a multi-disciplined,
international team of specialists.
Robert has lived and worked
in Aruba, Los Angeles and
London, and is based at the
Group’s head office in
Amsterdam. Prior to joining
PPHE Hotel Group, he held
international Marketing positions
at Golden Tulip Worldwide and
Hilton Hotels Corporation. He
holds a bachelor’s degree in
Hotel Management Business
Administration from Hotel
school The Hague, with a
major in marketing.
Michelle has held a number
of management positions at
PPHE Hotel Group over a period
of 12 years, originally joining as
General Manager, Park Plaza
Sherlock Holmes London in
2007. Michelle moved to the role
of General Manager of sister
hotel Park Plaza County Hall
London in 2014 and then onto
Park Plaza Victoria London
in 2016.
Promoted to the Regional
Vice President Operations,
the Netherlands & Italy in
2019, Michelle oversees
all operational, revenue, finance,
marketing and sales strategic
objectives for the region on
behalf of seven properties.
Michelle brings a strong
operational and commercial
background to the business
and educational qualifications
including the highly acclaimed
completion of the General
Manager Programme in
strategic management at
Cornell University in the United
States, as well as being a Master
Innholder and a holder of the
Freedom of the City of London.
Daniel is the Regional Vice
President Operations for the
United Kingdom for PPHE Hotel
Group and oversees all UK hotels,
restaurants and bars in
collaboration with each individual
General Manager, as well as
focusing on new properties
developments and the general
PPHE Hotel Group strategy.
Daniel has been with the Company
since 2009, originally taking the
position of Hotel Manager at Park
Plaza London Westminster Bridge
and in 2011 he moved to the
General Manager position. In
October 2013, Daniel took on the
additional role of supporting the
Central Reservations Office
as a General Manager next to
his existing responsibilities.
With over 20 years’ experience,
Daniel’s passion for hospitality
and attention to detail have
always been key drivers in his
career. Daniel strives to find
improvements to always keep
ahead of the competition and
enhance our position in
the industry.
art'otel London Hoxton
Please refer to
page 104 for the
biographies of Boris
Ivesha, Daniel Kos,
and Greg Hegarty.
PPHE Hotel Group
Annual Report and Accounts 2024
Strategic Report
Corporate Governance
Financial Statements
Appendices
107
PPHE Hotel Group
Annual Report and Accounts 2024
106
Corporate governance
Board responsibilities
Strategy and
management
• Define and set the Company’s strategy for creating value for all stakeholders, including society as a whole,
through sustainable success over the long term
• Monitor and review performance against strategic objectives
• Oversee resourcing, ensuring that the tools are available for management and the Group as a whole to meet
the Group’s objectives and measure performance against them
Structure
and capital
• Determine the corporate structure of the Group
• Set the management and control framework
• Determine rules and procedures for dealing in the Company’s securities
• Structure and governance of subsidiaries
Financial reporting
and controls
• Approve financial and management reports
• Control of dividend policy and implementation
• Capital and operating budget management
• Major capital project oversight
Risk management
and internal controls
• Review effectiveness of risk and control processes
• Set the Group’s risk appetite
• Report on risk management
• Oversee and review internal reporting channels, including whistleblowing reports
Environmental, Social
and Governance
• Set targets for carbon reduction and other environmental KPIs
• Aim for carbon net zero
• Oversee ESG strategy delivery
Society and workforce culture:
• Promote a guest-focused culture in line with the strategy, valuing integrity, transparency and respect
• Embed a culture that rewards personal and team performance aligned to our strategic and financial objectives
to maintain and attract top talent
• Ensure sustainable value creation for shareholders and for society as a whole
Business ethics:
• Control and prevention of corporate offences
• Effective management of data protection and privacy
• Conflict of interest management
• Maintain policies for good governance and ethical dealing
• Compliance with the Code
• Ensure that workforce policies and practices are both ethical and consistent with the Company’s values and
long-term objectives, management is capable and effective, and sound planning is in place
Stakeholder
engagement
• Build and maintain successful relationships with a wide range of stakeholders, created on trust, transparency
and mutual respect
• Understand what matters to key stakeholders
• Ensure that the Board engages with stakeholders directly
• Oversee executive engagement with stakeholders
Performance
• Regularly review the performance of the Group in light of its business strategy, objectives, business plans and
budgets, and ensure that any necessary corrective action is taken
Division of responsibilities
The Code requires a clear separation of powers and responsibilities between the members of the Board. During 2024, the Chairman of
the PPHE Hotel Group Board did not meet the requirements of Provision 10 of the Code, the Board ensured that its independence and
objectivity were maintained through the work of the Non-Executive Deputy Chairman, the Senior Independent Director and other Non-
Executive Directors. The role of each member of the Board carries separate duties and accountabilities, and collectively they ensure
effective communication with stakeholders. This table sets out the roles and responsibilities of our senior Executive and Non-Executive
Board members.
Role
Responsibilities
Boris Ivesha
President and
Co-CEO
It is the duty of the Co-CEO to conduct
day-to-day management of the Group
and the implementation of the Board’s
strategy and policy on the Board’s behalf.
The Co-CEO provides the executive
leadership the business needs. He is
assisted by the C-Suite, comprising the
Chief Financial Officer and the Chief
Corporate & Legal Officer. Additionally,
the Executive Leadership Team supports
this role and is accountable to it.
Responsibilities are shared between the Co-CEOs.
• Leading and managing the business
• Strategic implementation in line with the culture, values and purpose
of the business
• Accountability to Chairman for achieving key objectives
• Reporting on strategic development
• Oversight of Executive Leadership Team
• Talent development
• Performance management of Executive Leadership Team
• Resource management for Executive Leadership Team
• Running the business and being the key decision-maker on day-to-day
Company business
Greg Hegarty
Co-CEO
The Co-CEO shares the responsibilities
of the President and Co-CEO and is
responsible for the management of the
Group and the implementation of the Board
strategy and policy on the Board’s behalf.
In discharging his responsibilities, the
Co-CEO is advised and assisted by the
Executive Leadership Team and key
management functions.
Eli Papouchado*
As founder of the business, the Chairman
is responsible for its long-term, sustainable
health, leadership and strategic direction
through oversight and scrutiny. The
Chairman also has the duty of setting the
Board’s agenda, and ensuring that the
Board is effective in its role.
The Chairman also holds the Executive
Leadership Team accountable for
furthering the interests of shareholders.
• Strategic leadership of the Board
• Establishing and maintaining the Company’s purpose, values and culture
• Setting the agenda and strategic priorities for the Board
• Setting key Company objectives
• Promoting a culture of openness and debate
• Ensuring that the Directors are receiving and have access to clear
and timely information as needed to make key decisions
• Ensuring that the views of key stakeholders are communicated
to the Board
• Monitoring progress against strategic priorities
• Regular contact with the Company’s Executive Leadership Team
and relevant function heads to ensure that the Board has access to
relevant information and is resourced to carry out the objectives and
strategy set by the Board
* Eli Papouchado retired as Chairman and as a Director of the Board on 9th January 2025.
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Strategic Report
Corporate Governance
Financial Statements
Appendices
Corporate governance – continued
Division of responsibilities
Role
Responsibilities
Ken Bradley*
Non-Executive
Deputy Chairman
Ensures that the appropriate governance
structure is in place and that the functioning
of the Board of Directors is effective.
Liaises with the Executive Leadership Team
and key management positions to ensure
that the Board is well equipped to perform
its duties and effectively carry out
its functions.
Provides independent oversight and
scrutiny as required by Provision 10 of
the Code.
As Chair of the Nomination Committee, he is
responsible for ensuring the appropriate
governance structure and functioning of
the Board, as well as conducting the annual
Board effectiveness evaluation.
• Oversees corporate governance for the Board and ensures that
appropriate and tailored standards are in force to comply with the Code
• As Chair of the Nomination Committee, monitoring the induction
programme in place for new Directors as they are appointed
• Supporting the Chairman in ensuring that the Directors are receiving
and have access to clear and timely information as needed to make
key decisions
• Oversees annual Board and Committee evaluations and puts in place
a plan to act on the results of the evaluation
• Consulting with the Remuneration Committee about executive
remuneration
• Acting as designated non-executive director for workforce engagement
• Communicating with key stakeholders and independent shareholder
groups, with the support of the Chief Corporate & Legal Officer
• Ensures Committee chairs seek shareholder engagement on their
Committees’ respective areas of responsibility
• Ensures each Director has a clear understanding of the views
of shareholders.
Nigel Keen
Senior
Independent
Director
It is the duty of the Senior Independent
Director to lead the non-executive directors
in their oversight and scrutiny roles and
provide support and encouragement to
them. He must also provide a sounding
board for the Chairman and serve as an
intermediary for the other Directors and
shareholders. Reviews the effectiveness
of the Chairman and Non-Executive
Deputy Chairman.
• Shareholder engagement, including providing a channel for shareholder
feedback on executives and governance issues in the Company
• Support of the Chairman in delivering strategic leadership of the Board
• Evaluating the effectiveness of the Chairman on behalf of the
other Directors
• Support annual Board evaluation
• Challenging the Board where relevant to help in developing proposals
on strategy and objectives
• As Chair of the Remuneration Committee, ensures, with the Deputy
Chairman and the members of the Remuneration Committee, that
there is a clear relationship between remuneration and performance,
measured with clear reference to the long-term success of the Company
• Challenging the Board where relevant to help in developing proposals on
strategy and objectives
• Taking the lead in identifying and providing for the development needs
of the non-executive directors to enhance the overall effectiveness of
the Board
• As Chair of the Remuneration Committee, is responsible for ensuring
that all remuneration proposals are put before the Committee for
approval, and placed on the agenda of the next general meeting for
an advisory vote by shareholders
• Owns the Remuneration Policy, which is kept updated, and subject to
a shareholder vote once every three years
* Ken Bradley became independent, Non-Executive Chairman on 9 January 2025.
Corporate governance
As of 31 December 2024, the Board
was composed of eight Directors (with
an alternate for the Chairman). Three
Directors are Executive Directors, and five
are Non-Executive Directors (including the
Chairman). The Executive Directors are:
the President and Co-CEO, Boris Ivesha; the
Chief Financial Officer, Daniel Kos; and the
Co-CEO, Greg Hegarty. The former Chairman,
Eli Papouchado, was not considered
independent, within the meaning of Provisions
9 and 19 of the Code as he is a Red Sea Party
(please see page 153 for a definition of Red
Sea Party in the Directors’ Report as required
by the Disclosure Guidance and Transparency
Rules). All Board members are subject to
annual re-election by shareholders at the
Annual General Meeting.
Balance of independent
Non-Executive Directors
The Code requires that at least half of the
Board, excluding the Chairman, be made up
of independent Non-Executive Directors,
and that no one individual or group should
be allowed to dominate decision-making.
After due consideration was given to all
factors that are likely to impair, or appear
to impair, the independent judgement of
each Director, the Board concluded
the following:
There are four independent Non-Executive
Directors: Kenneth Bradley, Nigel Keen,
Stephanie Coxon and Marcia Bakker.
Eli Papouchado, Yoav Papouchado, Roni
Hirsch and Executive Board members are
not independent. Changes to the Board as
of 9 January 2025 are set out on page 102.
Strategy, operational performance and risks
• Conducted Directors’ Strategy
Day as a successful annual
exercise in strategic leadership
and direction
• Operational updates from the
Executive Leadership Team –
regular periodic updates received
and reviewed
• Potential growth and development
– see Strategy on page 28 –
regular updates on the growth
opportunities discussed
• Principal risk oversight – see page
90 for the business’s principal
risks.
• Regular Board-level oversight
of risk management
• Internal and external audits:
outputs of audits received at
Board level
• Performance of internal and
external auditors evaluated
Succession and talent
• Approved a new Remuneration
Policy to be presented to
shareholders for an advisory
vote during the 2025 Annual
General Meeting
• Reviewed gender balance of the
Company and senior management,
and Board Diversity Policy
• Maintained succession plans for
the Board, and oversaw plans to
ensure continuity in senior
management talent retention,
development and acquisition
• Regularly reviewed structure,
size and composition of the Board
• Received and considered the
results of an externally conducted
review of the effectiveness of
the Board and its composition
(including skills, knowledge,
experience and diversity)
performed by Independent
Audit Limited
Financial performance
• Chief Financial Officer and head
of risk and internal audit regularly
reported to the Board
• Performance against budget
reviewed in detail, including
cash-flow forecasts
• Reviewed and approved the
full- and half-yearly results
and associated announcements
and the trading updates
• Considered interim and final
dividend recommendations
and declarations
• Reviewed compliance with
banking facilities
Stakeholder engagement and governance
• Received regular reports from
the Chair of each Committee
• Received regular reports and
updates from the Company
Secretary and from the Chief
Corporate & Legal Officer
• Reviewed governance standards
of the Group and its subsidiaries,
including key governance policies
and matters reserved to
the Board
• Oversaw incident management
through receipt of reports
received through implementation
of the Whistleblowing Policy and
other control framework
measures
• Reviewed and approved updates
to the Significant and Related
Party Transactions Policy
• Responded to investors
collectively in announcements
following votes at the Annual
General Meeting, and individually
in exchange of correspondence
• Non-Executive Directors attended
staff meetings as observers
• Reviewed HR plan
• Review of staff surveys
• Site visits
Board activities in 2024
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Corporate Governance
Financial Statements
Appendices
Corporate governance – continued
Board policies and matters reserved
to the Board
Our Board reserves to itself governance of
the Company in line with statutory obligations
and fiduciary duties. In particular, the Board
maintains a number of powers (Reserved
Powers) which are not delegated to
Committees of the Board or to the Executive
Leadership Team. These include:
• statutory obligations and public
disclosure;
• strategic matters and financial reporting;
• oversight of management and personnel
matters;
• risk assessment and management,
including reporting;
• monitoring, governance and control; and
• other matters having material effects
on the Company.
Transparency and accountability are
maintained by processes and procedures
set out in documents reserved to the
Board, including:
• Articles of Incorporation;
• Schedules of Matters Reserved for the
Board; and
• Board Committee Terms of Reference.
Each Director may obtain independent
professional advice at the Company’s
expense in the furtherance of their
duties as a Director. The Board and the
Committees of the Board have access
to legal support from the Chief Corporate
& Legal Officer, external law firms, and
other specialist consultancies, such as
remuneration consultants and recruitment
specialists. Wherever such third party
consultants are engaged, they are identified
in this report in line with the requirements
of the Code.
The Board reviews all governance policies
and Terms of Reference periodically to
ensure that the policies remain current and
appropriate to the needs of the Board
and Company.
Conflicts of interest
The Board and all team members are
required to comply with two policies:
the Conflicts of Interest Policy and the
Significant and Related Party Transactions
Policy. These policies are reviewed annually,
and compliance training is regularly
refreshed. Training was provided to
Board Directors following changes to the UK
Listing Rules that were implemented in 2024,
and the Significant and Related Party
Transactions Policy updated accordingly.
The two policies require that anyone with
a potential conflict of interest promptly
and without delay observes a formal
procedure for reporting it, and having it
reviewed by the Board with support from
the Chief Corporate & Legal Officer. A
Director affected by a conflict of interest
is not permitted to participate in formal
discussions and decision-making involving
the interest at stake. The Board does not
believe there to be any inherent conflicts of
interest other than ones already disclosed
by each Director. Any statutory duties
under Guernsey law that are in addition to
the Conflicts of Interest Policy are complied
with by the Directors.
Exercising oversight and ensuring
adequate time to carry out duties
The annual timetable for Board meetings
and meetings of the Board Committees is
designed to allow each and every Board
member to discuss and debate matters.
There is a timetable set for the submission
of papers prior to meeting so that Directors
have ample time to familiarise themselves
with the agenda and prepare for the
meetings. All Directors are expected to
contribute in all meetings to ensure proper
oversight and diversity of perspectives and
opinions. Non-Executive Directors are
required to demonstrate that they have
sufficient time to fulfil their duties and
are accountable to the Non-Executive
Deputy Chairman and Senior Independent
Director for this. The Chair of the
Nomination Committee monitors external
appointments for all Board members to
ensure sufficient capacity. If a Director
wishes to take up an external appointment,
he or she must obtain prior Board approval.
Such requests will be assessed on a
case-by-case basis, including whether the
appointment could negatively impact the
Company, taking into account external
guidance and proxy voting guidelines to
ensure ‘overboarding’ is considered.
Oversight requires all Board and Committee
members to ensure that they have
considered (and, where relevant and lawful,
solicited) the views of relevant stakeholders
regarding the issues to be discussed
at meetings.
Resourcing the Board to ensure that it meets
its objectives and measures performance
against them
At all times, all Directors have access to the
Chief Corporate & Legal Officer to ensure
that they have appropriate, legally informed
advice on all governance matters.
Chief Corporate & Legal Officer
and company secretarial support
The Chief Corporate & Legal Officer and
the Company Secretary, Suntera Limited,
provide important support functions to
the Board and its members. As a member
of the C-Suite, the Chief Corporate & Legal
Officer is required to ensure that internal
governance arrangements below Board
level for the workforce are aligned to the
directions of the Board and the risk appetite
of the Company as determined by the Board.
Responsibilities of the Chief Corporate
& Legal Officer to the Board
• Ensures compliance with the Financial
Conduct Authority’s UK Listing Rules
(UKLR) and Disclosure Guidance and
Transparency Rules (DTR)
• Responsible for information flow to the
Board (via the Company Secretary)
• Advises and supports the Chairman and
Board on all governance matters
• Ensures that all Directors have access
to the advice and services of internal
lawyers and external, independent
professional legal advice at the
Company’s expense in furtherance
of their duties
• Oversees and advises the Board on the
Company’s corporate governance
practices, policies and procedures with
respect to statutory and other
corporate governance frameworks
• Ensures that the Board is adequately
resourced for effective and efficient
function
• Supports the ESG Committee of the
Board in the formulation and execution
of the Group’s ESG strategy
Responsibilities of Company Secretary
to the Board (Suntera Limited)
• Provides compliance support with
respect to the Companies (Guernsey)
Law 2008 (as amended or replaced
from time to time)
• Maintains the Board and Committee
meeting diary and agenda
• Ensures that the Board receives
accurate, timely and clear information
prior to meetings
• Ensures that, prior to Board meetings,
Directors receive all necessary
information to facilitate open,
constructive discussion and debate
• Ensures that the Board is adequately
resourced for effective and efficient
function (alongside Chief Corporate &
Legal Officer)
Board Performance Review
The Board appointed Independent Audit
Limited to conduct an evaluation of its
performance. The Board Performance
Review cycle is a three year cycle, with
internal evaluations conducted in years 1
and 2, and an external evaluation conducted
in the third year of the cycle.
Independent Audit Limited is completely
independent of PPHE Hotel Group, provides
no other services to the Company and has
no connection with the Board, individual
Directors or members of the Executive
Leadership Team. Independent Audit Limited
performed the external Performance
Review in 2021.
The purpose of the evaluation is to
establish the effectiveness of the Board, the
Directors and the Committees of the Board
in discharging the functions required of
them by law, by good corporate governance
practice and by the internal frameworks of
the Company. It includes consideration of
the tenure of each Director, and their skills,
experience and length of service. It also
includes an assessment of each Director’s
external responsibilities to ensure that
they are able to commit sufficient time
to discharge their duties effectively.
The evaluation covered the full scope
of the Board and each Committee’s work,
providing recommendations, suggestions
and an overall assessment of effectiveness.
A summary is included in the table on
page 123.
Annual Committee assessment
Each Board Committee is assessed
annually to ensure that it is functioning in
line with the relevant terms of reference
and mandates set by the Code. Annual
review of governance documents is a
requirement of best practice. A summary
of the external performance review for the
Board Committees is included on page 123
in the report of the Nomination Committee.
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Financial Statements
Appendices
Corporate governance – continued
Board meetings – establishing and
promoting a culture of debate and diversity
The Board values diversity of opinion
and differing viewpoints in executing its
responsibilities. The Chairman ensures
that time is made available for all opinions
to be heard. In particular, the Board values
a clear separation of responsibilities
between the Executive Leadership Team and
the leadership provided by the Board. This
ensures proper oversight, informed debate
and diversity of thought.
Each member of the Executive Leadership
Team oversees certain defined departments
of the business and reports on the progress
of these areas to the Board as and when
relevant. The Company believes that this
structure ensures effective communication
between the Board and the Executive
Leadership Team of the Company’s business,
and that no small group of individuals
dominates the Board’s decision-making.
Any concern expressed by Directors
about the Company or its subsidiaries,
or a proposed action, is recorded in the
minutes of the meeting. Additionally,
the Senior Independent Director takes
responsibility for ensuring that all
viewpoints are available to the Board.
Communication between the Board and the
Executive Leadership Team
Management, including the Executive
Leadership Team, reports to the Co-CEOs,
whom the Board has made responsible for
oversight and performance management.
The Co-CEOs report to the Board on this.
Greg Hegarty, Co-CEO chairs a monthly
meeting of our Executive Leadership Team,
which is composed of the Executive Vice
Presidents of the Company and manages
day-to-day operations of the Group’s
businesses, under the supervision of the
Board. The Board maintains a schedule of
matters reserved to the Board, and in
addition sets the financial parameters of
the Executive Leadership Team’s activities.
The C-Suite had monthly business update
calls with the Non-Executive Directors in
2024. Further, the Non-Executive Directors
conduct sub-meetings following the business
update calls without others in attendance, to
ensure good oversight, and have established
a permanent forum to ensure that
information flows and transparency were
well maintained. This enables the Board to
effectively carry out its duties and make
swift decisions. Open communication
between the Non-Executive Directors and
C-Suite has been found to be very effective
as it allows the Non-Executive Directors to
engage directly to ensure that management
takes corrective actions in a timely manner.
Culture and values
The Board sets the culture and values of
the business and works to engage with all
stakeholders to communicate and promote
the culture and values. This requires the
Board to review annually policies which
maintain the culture, values and facilitate
the business ethics of the Company. Policies
set out the behaviours required of people
working within our Board, management and
operations, and aim to empower people by
providing them a framework and guidance.
When reviewing policies, the Board takes
account of developments in the law, in
stakeholder expectation, and best practice
to ensure a strong framework optimised to
the specific needs of the business.
Through the ESG Committee, the
Board has committed to rigorous
targets in environmental and social
performance. These are set out in detail
in the ESG section and in the report of the
ESG Committee. Important ESG policies
remain reserved to the Board, such as the
Conflicts of Interest Policy, the Significant
and Related Parties Transactions Policy,
and the Whistleblowing Policy. These are
reviewed and refreshed annually.
The Board takes steps to monitor the
culture within the organisation. The
following tools allow the Board to keep
abreast of workforce culture:
• Engagement surveys;
• Online guest reviews;
• Social media;
• Employer review sites;
• Compliance training records; and
• Hotel audits.
Data from these sources is available at
Board level to monitor the health of the
culture within the business. Aligning culture
to the values and purpose of the business is
key to success.
Workforce engagement
Provision 5 of the Code specifies
mechanisms for ensuring Board
workforce engagement. In line with that
provision, the Non-Executive Deputy
Chairman, Ken Bradley, is the designated
Non-Executive Board member responsible
for workforce engagement.
Our team members’ loyalty and dedication
are vital to the long-term, sustainable
success of the business. They understand
our passion to create the best possible
experiences for our guests. This is reflected
in the ESG targets to further workforce
engagement and employee development in
order to attract and retain talent at all levels.
HR partners attend the Nomination
Committee at least once a year.
Board site visits
The Non-Executive Directors conduct hotel
and corporate office visits to interact with
staff and experience customer service.
Some visits involve staff meetings and
feedback is given to the Board by the
Non-Executive Directors. Non-Executive
Directors site visits can also involve
attending staff meetings. Feedback
is given to the Board.
Engagement surveys
Some team members prefer to offer their
feedback anonymously, rather than
face-to-face. Let’s Talk, our engagement
surveys, allow us to monitor employee
engagement and other important matters,
such as employee awareness of ESG.
Engagement surveys took place online on an
anonymous basis and were conducted by an
external partner. The overall responses to
the engagement questions were positive.
The Board monitors this process.
Board and Committee meetings
In accordance with the Code, the Company
has established the following Committees in
order to support the Board and carry out
work on its behalf:
• Audit Committee
• Nomination Committee
• Remuneration Committee
In line with investor priorities, and to ensure
good governance, the Company has
established the ESG Committee.
Board meetings: Procedures
Notices and review of
any conflicts arising
The notices of Board meetings, agendas
and supporting documents are formally
circulated to the Board in advance of
Board meetings as part of the Board
papers. Therefore, Directors have the
opportunity to request that any agenda
items be added that they consider
appropriate for discussion.
Notices and review of
any conflicts arising
At the beginning of each meeting, each
Director must disclose the nature and
extent of any conflict of interest arising
generally or in relation to any matter
to be discussed as soon as the Director
becomes aware of its existence. Directors
must also disclose their shareholdings and
any changes to those that have occurred.
Standing agenda
items
(1) Strategy
(2) Management updates from:
• Executive Directors
• Executive Leadership Team
(3) Updates on corporate governance by
Non-Executive Deputy Chairman
(supported by the Chief Corporate
& Legal Officer)
Non-members
in regular attendance
Chief Corporate & Legal Officer, Suntera
Limited (Company Secretary)
Board succession
planning
Regular Executive Leadership Team
attendance of Board meetings is part
of our succession plan (internal
talent development).
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
114
115
Strategic Report
Corporate Governance
Financial Statements
Appendices
Nomination
Committee
Audit
Committee
Our Board
ESG
Committee
Remuneration
Committee
Corporate governance – continued
Terms of reference for each Board Committee are available on the Company’s website.
Develops. Plans.
Evaluates.
Nominates.
Oversees current needs
and evaluates, plans for the
future, monitors, advises,
and nominates candidates.
• Ensures that the Board
has a balance of skills,
knowledge, diversity
and experience
• Board and Committee
composition
• Board nominations
• Succession planning
for Directors
• Succession planning for
senior management
Report available on page 119
Transparency.
Accuracy.
Monitors. Aligns.
Oversees risk management,
internal controls, audit
functions and financial
systems. Monitors the
integrity of the Group’s
financial statements and
internal controls of
the Company.
• Monitors and reviews the
integrity of the Group’s
half-year and full-year
financial results, and the
financial reporting process
• Oversees risk
management and reviews
the effectiveness of the
Group’s systems of
internal controls and risks
• Oversees ethics and
compliance for the
Company
• Reviews and oversees the
Group’s internal and
external audit functions
Report available on page 126
Values.
Culture.
Talent proposition.
Oversees alignment
of remuneration and
workforce policies to the
long-term success of the
Company and its values.
Responsible for Remuneration
Policy and for setting salary
and bonus levels for senior
management and employee
benefit structures.
• Remuneration Policy
• Sets targets and
incentive schemes
• Executive Leadership
Team and senior
management
remuneration review
Report available on page 135
Future plans.
Safeguards.
Sustains.
Oversees the approach to
sustainability and adding
value for our people, our
places and our planet.
Responsible for reviewing
statutory reporting on
environmental and social
performance, and proposing
strategy and targets to
the Board.
Report available on page 133
Strategy. Purpose. Culture. Communications.
The Board sets the strategy and commercial vision, leading with integrity, promoting culture. It evaluates
management, overseeing resources and talent pipeline, engaging with key stakeholders.
Board and Committee membership as at
31 December 2024
Eli Papouchado
Yoav Papouchado
Alternate Director
Boris Ivesha
Daniel Kos
Greg Hegarty
Roni Hirsch
Appointed January 2025
Ken Bradley
C
Nigel Keen
C
Stephanie Coxon
C
Marcia Bakker
C
ESG Committee
Audit Committee
Nomination Committee
Remuneration Committee
C
Chair
Board and Committee meeting calendar 2024
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
A
B
B
B
B
B
B
B
A
B
R
B
A
A
E
A
E
E
N
E
N
N
R
N
R
R
R
E
B
Quarterly
Board
meeting
B
Ad-hoc Board
meeting
A
Audit
Committee
meeting
E
ESG
Committee
meeting
N
Nomination
Committee
meeting
R
Remuneration
Committee
meeting
Annual
General
Meeting
E
Extraordinary
General
Meeting
Committee
meeting
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
116
117
Strategic Report
Corporate Governance
Financial Statements
Appendices
Corporate governance – continued
Board and Committee meeting attendance 2024
If any Director is unable to attend a meeting, they communicate their opinions and comments on the matters to be considered via the
Deputy Chairman or the relevant Committee Chair. This table provides full information on Board and Committee meeting attendance in
2024. Not all directors were required to be present at every ad-hoc Board meeting. Each ad-hoc Board meeting and Committee meeting
was quorate.
Name
Quarterly
Board
meetings
Ad-Hoc
Board
meetings
Audit
Committee
meetings
ESG
Committee
meetings
Nomination
Committee
meetings
Remuneration
Committee
meetings
Committee
meetings
Eli Papouchado
1/4
0
–
–
–
–
N/A
Yoav Papouchado
3/3
4
–
–
–
–
N/A
Boris Ivesha
4/4
2
–
–
–
–
N/A
Daniel Kos
4/4
5
–
–
–
–
N/A
Greg Hegarty
4/4
4
–
–
–
–
N/A
Marcia Bakker
4/4
4
5/5
4/4
4/4
5/5
1/11
Ken Bradley
4/4
4
5/5
4/4
4/4
5/5
6/11
Stephanie Coxon
4/4
3
5/5
4/4
4/4
5/5
7/11
Nigel Keen
4/4
5
5/5
3/3
4/4
5/5
4/11
Nomination Committee report
Letter from the Chair
of the Nomination Committee
Dear Stakeholder,
As its Chair, I am pleased to present
to you the report of the Nomination
Committee for 2024. Good governance
is achieved by assembling a diverse Board
with the requisite expertise, and with
this in mind, we have worked to deliver on the
priorities of stakeholders and the Corporate
Governance Code 2018. Our focus is on
succession planning and ensuring a strong
pipeline of candidates for leadership roles
across the organisation, with a focus on
a broad array of backgrounds and fields
of expertise.
Succession planning
PPHE Hotel Group has always relied
on its founders for their inspirational
leadership and strategic mindset for its
success. It is important to me in my role to
ensure independent oversight that this
secret of success is balanced by diverse,
regularly rotated and independent oversight
and leadership. The Code mandates
obligations for the Chairman of the Company,
some of which I discharged in 2024 as
Non-Executive Deputy Chairman because I
maintain the independence criteria required
by the Code. It is our joint responsibility to
represent shareholders’ and other
stakeholders’ interests to the Executive
Leadership Team, which ultimately secures
shareholder confidence in the long-term
sustainability of our business model.
The tables on pages 123 and 124 present
our reporting of Board composition with
respect to protected characteristics (as
defined by the Equality Act 2010).
Our Board does not yet meet the female
representation targets set out in the
FTSE Women Leaders Review and the UK
Listing Rules. This is partly because we do not
control the use of shareholder powers to
appoint Board members, which falls outside
our plan for diversity. In addition, because of
the international character of our Board, we
find our mandatory reporting on diverse
ethnicity in line with UK categorisations of
ethnicity challenging. When so few of our
Board are of UK origin. We have Directors
from widely varying backgrounds which
brings cognitive diversity.
Succession planning is key to ensuring
that there is a roadmap internally to
meeting these targets, and we are able to
demonstrate to stakeholders that we take
seriously the need to meet them as and
when new appointment opportunities arise.
The implementation of our succession
planning strategy for 2024 has resulted
in my own appointment as Chair of
the Company. In January 2025 (post
balance sheet) we also welcomed Roni
Hirsch of the Red Sea Group to the Board,
in line with our Relationship Agreement.
Board composition
Two of our eight Directors are female,
and none occupy the key positions of Chair,
CEO, CFO, or Senior Independent Director.
This is a by-product of the long-standing
composition of the Board, with a number of
experienced Directors who have provided
essential stability and strategic guidance
over many years. However, the Board is
committed to prioritising diversity in future
appointments. When the Company next
recruits for Non-Executive Director roles
or executive positions, diversity will be a key
consideration to align with the UK Listing
Rules and reflect the Company’s
commitment to fostering inclusion.
Ken Bradley
Non-Executive Chairman
to the Board of Directors
Membership of the Nomination Committee
and meeting attendance
Name of Director
Meetings
attended
Eligible to
attend
Ken Bradley (Chair)
4
4
Marcia Bakker
4
4
Stephanie Coxon
4
4
Nigel Keen
4
4
PPHE Hotel Group
Annual Report and Accounts 2024
119
Strategic Report
Corporate Governance
Financial Statements
Appendices
PPHE Hotel Group
Annual Report and Accounts 2024
118
Nomination Committee report – continued
While progress at the Board level is ongoing,
the Company is proud of its representation
below the Board, particularly within the
Executive Leadership Team, where there
is one-third female representation.
Furthermore, there is strong and fair female
representation across leadership roles
throughout the Company. Women are
prominent in the executive leadership of the
business, comprising 50% of the Executive
Leadership Team reporting to the Executive
Directors (see page 106). The Board remains
committed to promoting diversity and will
ensure this remains a core priority as part
of its long-term succession planning.
Our Board is led by an independent,
non-executive Chairman. Composition is
explained on page 104 and 105. The Founders
of the business maintain rights to appoint
Directors as set out in the Articles of
Incorporation set out on the Company
website. Under the Articles of Incorporation
the founders, as major shareholders may
appoint Directors to the Board as follows:
Euro Plaza Holdings B.V. (‘Euro Plaza’) may:
• nominate two Non-Executive Directors to
the Board for so long as Euro Plaza and its
associates directly or indirectly control at
least 30% of the issued shares in the
Company; and
• nominate one Non-Executive Director to
the Board for so long as Euro Plaza and
its associates control at least 10% but
less than 30% of the issued shares of
the Company.
Euro Plaza is ultimately controlled by
Eli Papouchado.
Boris Ivesha may nominate one Non-
Executive Director to the Board for so long
as he directly or indirectly controls at least
10% of the issued shares in the Company.
The shareholders may, by ordinary
resolution, resolve to remove any Director
before the expiration of his or her period of
office and appoint a replacement Director.
All our Board Directors are subject to annual
election or re-election by shareholders at the
Annual General Meeting (‘AGM’). At the date of
publication, the Non-Executive Chairman and
other Non-Executive Directors with the
exception of Roni Hirsch are independent
from the business.
They are regularly refreshed to ensure that
independence is maintained, and diversity and
fresh perspectives are welcomed onto our
Board. Executive Directors are responsible
for the day-to-day operations of the business.
They are led by our President and Co-CEO
Boris Ivesha and Co-CEO Greg Hegarty.
Throughout 2024, the composition of our
Board remained the same. As set out in the
Chairman’s Statement, post balance sheet,
in January 2025, we have welcomed Roni
Hirsch to the Board as a Non-Executive
Director. Other changes to note in Board
composition are as follows:
(1) Greg Hegarty’s promotion to co-CEO
in February 2024;
(2) Marcia Bakker’s assumption of the
Chair of the ESG Committee in January
2024 (replacing me as Chair, although I
remain a member of the Committee);
(3) Nigel Keen’s joining of the ESG
Committee in January 2024; and
(4) (post balance sheet) the retirement of Eli
Papouchado from the Non-Executive
Chairmanship of the Board and my own
appointment to the role in January 2025.
With new appointments to the Board and
new responsibilities for Board members, it
is important to have ongoing measures to
ensure that Directors have the familiarity
and expertise they need to provide effective
oversight. This includes:
• periodic training on Directors’ duties,
(including on changes to the regulatory
regime), which were conducted in 2024 by
our external law firm providing corporate
law support, Norton Rose Fulbright;
• site visits by Non-Executive Directors to the
business’s various locations to ensure
familiarity and workforce engagement; and
• ongoing review to ensure that Directors
have all the training and resources
necessary to discharge their
responsibilities of ensuring full
accountability and oversight.
The Committee is composed of four
independent Non-Executive Directors.
Each Director is individually, and the
Board is collectively, subject to an annual
evaluation. This evaluation considers the
independence of each Director. No member
of the Nomination Committee is considered
to have a personal financial interest in
matters to be decided by the Committee.
The Committee’s performance, effectiveness
and composition is reviewed annually as part
of the Board Performance Review. In 2024,
this review was conducted externally by
Independent Audit Limited. A summary of
its conclusions can be found on page 123.
Looking ahead
With the outgoing Chairman’s decision
to step aside, we rely on our strong
succession planning to ensure that, as far
as possible, we retain continuity with his
vision for the Company, and the unrivalled
skills, experience, network and insight the
Company has relied on for many years
for its success. I consider succeeding Eli
Papouchado to be both an honour and a
challenge, and I am focused on the duties
the Code requires of an independent Chair.
Assisting me in this new challenge is a strong
and balanced team in place to deliver the
leadership the business needs for a strong
strategy for success. We have been
rewarded by shareholders with their
confidence in the measures taken by
leadership to ensure a secure future. I
look forward with anticipation to further
success in 2025.
Ken Bradley
Chair of the Nomination Committee
Nomination Committee activities and focus in 2024
Function
Actions in 2024
Board and
Committee
Composition
• Reviewed the composition of the Board to determine that it remains
suitable and effective to support the culture, values and strategy of
the business.
• Conducted the annual Board evaluation in line with the three-year
cycle of external assessment. Independent Audit Limited supported
this process.
• Reviewed the effectiveness and performance of the Committee.
• Ensured that policies and procedures for Diversity, Equity and
Inclusion (DEI) at all levels of the organisation were maintained.
Succession
planning for
Board and
Executive
Leadership Team
• Maintaining ongoing review and annual update of succession
planning for:
(a) Board Directors; and
(b) Executive Leadership Team.
Diversity & talent
management
• Ensured diversity requirements in succession plans.
• Considered KPIs for monitoring DEI elements of the ESG strategy.
Workforce
engagement
• Conducted site visits.
• Reviewed outputs of employee engagement, and incorporated targets
into the ESG strategy.
Board induction
I am responsible, alongside the Chief
Corporate & Legal Officer, for ensuring
that new appointees to the Board receive
a tailored and comprehensive induction
to familiarise them with the Company’s
strategic aims, purpose, operations,
regulatory climate, stakeholders, Directors’
duties and governance practices. We tailor
our programme taking into consideration
the Director’s previous Board experience,
expertise and familiarity with the real estate
and hospitality industries. The induction
process includes two interviews with myself
before the programme commences and
mid-way to identify any gaps. This is also the
procedure supporting Roni Hirsch’s
appointment as Non-Executive Director.
The induction process should introduce
the new appointee to key stakeholders and
the culture of the Board and the Company
as a whole. The induction also allows new
appointees to gain an appreciation of their
role in the success of the Company, how
the Company measures success and the
expectations of all key stakeholder groups.
The induction must be tailored to the
individual Director without neglecting the
key elements of our induction programme.
Our two newest Directors’ inductions
reflected this, as will the programme to be
followed by Roni Hirsch. Serving as CEO of
Red Sea Group, the Company’s controlling
shareholder, and having been with Red Sea
Group since 1993, Roni is very familiar and
engaged with the Group. His induction will
focus on his legal responsibilities in the UK
and Guernsey context. Greg Hegarty has a
long-standing familiarity with the business,
and therefore his induction focused on
training on Directors’ legal duties and
responsibilities. Marcia Bakker has a strong
grounding in corporate governance, with
long experience in several EU jurisdictions.
Her induction focused on familiarisation
visits across the business, and training in
UK and Guernsey Directors’ duties.
Succession planning
Responsible corporate governance and
stakeholder feedback mean that succession
planning is a key focus for the Committee.
The business’s success rests on the
contribution of key individuals in its
Executive Leadership Team, including the
founders of the business, and many
individuals whose careers have developed
within the organisation. We are proud of the
success of our pipeline, but we recognise
that diversity of backgrounds and
experience is a key strength, and strong
succession planning is a key requirement in
stakeholder confidence that decision-
making is not dominated by any one
individual, or that a strong corporate
culture does not decay into ‘groupthink’.
Board succession planning
The main focus of the Nomination
Committee in 2024 has been on evaluating
the composition and functioning of the
Board in light of the new Board members
as well as roadmapping a succession plan
addressing the Committee’s short-term,
medium-term and long-term concerns and
different contingencies.
Given the regular interaction between the
Board and the Executive Leadership Team,
the Committee has the required exposure to
evaluate internal candidates when planning
for different succession eventualities. The
Committee’s succession planning process
is aligned with the Group’s entrepreneurial
culture which fosters the growth and
support of team members from varying
positions within the Company through to
leadership level and is, therefore, engineered
to produce internal candidates who may be
suitable for positions on the Board, as well as
considering external candidates when
appropriate with the assistance of external
specialist search consultants.
As informed by the Committee’s succession
plan and its evaluation of the balance of skills
and diversity on the Board, the Nomination
Committee determined that no new Directors
should be appointed in 2024, but that Roni
Hirsch should be appointed as Non-Executive
Director following the retirement of Eli
Papouchado in 2025. The vacancy on the
Board has been determined by the decision
of the Chairman to step aside. Given the
position the outgoing Chairman holds as
a major shareholder, this was a prime
consideration in ensuring that shareholder
interests are fully represented on the Board.
Roni Hirsch’s appointment was made under
the power given to Euro Plaza under its
Relationship Agreement with the Company
and set out in the Articles of Incorporation.
As an important element of the succession
planning programme, consideration is
also given to the length of service of
Board members.
The Board believes that, in its current
composition, it has the right combination
of skills, experience and knowledge, and
remains effective and entrepreneurial.
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
120
121
Strategic Report
Corporate Governance
Financial Statements
Appendices
Executive Leadership Team
succession planning
Executive Leadership Team succession
planning is, itself, a key part of the Board
succession planning process. Individuals
whose contribution to executive leadership
can be considered for appointment to the
Board where this is deemed necessary and
appropriate for the business. It was this
determination that led to the appointment
of Greg Hegarty in 2023.
PPHE Hotel Group has benefited from
a strong talent pipeline. Our Executive
Leadership Team all have long histories
within the business, and many have reached
their current seniority through ‘rising
through the ranks’. Ensuring the ongoing
success of this talent pipeline is a key
business priority. The Committee works
closely with the Vice-President of Human
Resources & Talent Technology on all
aspects of recruitment and development
of talent.
The Senior Vice President of Human
Resources & Talent Technology documents
the key skills of the current holders of
senior positions in order to ensure that, in
the event an individual needs to be replaced
by the business, their contribution can be
smoothly transitioned. Succession planning
is divided into short- and long-term planning,
which is defined by the immediacy of the
need to fill any vacancy. Short-term plans
are triggered by an event such as a
resignation or other unforeseen departure.
In addition to focusing on individuals, the
organisational structure of roles and
reporting lines within the business is kept
under review to ensure that it continues to
deliver the business’s needs. Periodically,
this is externally assisted, and takes into
account the needs of various stakeholders,
not least our affiliate partner, Radisson
Hotel Group.
The Group’s ESG strategy feeds into our
succession planning. I am the Board member
responsible for workforce engagement, and
we have several strategic objectives for our
team members under the ‘social’ pillar of the
ESG strategy. This enables us to include DEI
elements into the strategy.
Position of the Chairman of the Board
The retirement of Eli Papouchado, and my
assumption of the role of chair took place in
January 2025. The Code places significant
responsibilities on the Chairman for
accountability to shareholders and
representation of their interests. For this
reason, consideration is given at all times
to ensuring that an appropriate person
occupies the role, and provisions are made
for both short- and long-term succession
periods. As well as my replacing Mr.
Papouchado as the Chairman, the decision
was taken to appoint Roni Hirsch, CEO of
the Red Sea Group, to the Board. Please see
the Directors’ report on page 143 for the
relationship between the Red Sea Group
and PPHE Hotel Group.
Board Performance Review
PHE’s Board Performance Review follows
a three year cycle, with internal reviews
conducted in years 1 and 2, and an external
review conducted in the third year of the
cycle. The cycle requires that each year,
assessment is made of the Board and its
Committees in each of the following areas:
• Performance;
• Composition;
• Diversity; and
• Group dynamics and their impact on
objectives.
Individual directors are assessed on their
personal contributions to meetings and to the
discharge of the collective responsibilities of
the Board and Committees. The Board
appointed Independent Audit Limited to
conduct a review of its performance in this
the third year of the cycle. The appointment
process was led by the Non-Executive Deputy
Chair. Independent Audit Limited is a
signatory to the Chartered Governance
Institute’s Code of Practice for independent
board reviewers. It is completely independent
of PPHE Hotel Group, having no relationship
with the Board or members of the Executive
Leadership Team. It previously conducted
external performance reviews in 2018 and
2021; independence and objectivity has been
maintained by varying the team composition
each time.
The review considered all aspects of the
effectiveness of the Board, the directors
and the Committees of the Board in
discharging the functions required of them
by law, by good corporate governance
practice and by the internal frameworks of
the Company. It included consideration of
the tenure of each Director, and their skills,
experience and length of service. It also
included an assessment of each Director’s
external responsibilities to ensure that
they are able to commit sufficient time to
discharge their duties effectively. The
review also considered the diversity of the
Board and whether it has the necessary
mix of skills, knowledge and expertise. No
relevant suggestions for change were
made. The review was overseen by the
Non-Executive Deputy Chair of the Board,
who was responsible for providing the
external reviewer with the necessary
access and support. The main elements
of the review process were:
• Preliminary discussion with the Deputy
Chair and Chief Corporate & Legal Officer
• Gathering feedback about the
performance of the Board and
Committees from all Board members
and a number of executives
• Observation of Board and
Committee meetings
• Review of the relevant papers for
the observed meetings
• Discussion of the draft report with the
Deputy Chair, the Chief Corporate & Legal
Officer and the CEO
• Discussion of the final report with the
full Board
The final report to the Board identified
both strengths and opportunities for
improvement, along with Independent
Audit Limited’s suggestions for the Board
to consider. The principal outcomes are
summarised in the table. Independent
Audit Limited has reviewed and agreed
this description of the review process
and outcomes.
Board diversity
Shareholders require diversity amongst
Board members to ensure that the business
is led by a group of varying backgrounds
and expertise, without a single, dominant
presence in the form of an individual or class
of individuals potentially distorting decision-
making in their interests. The Nomination
Committee has responsibility for the formal
elements of this by maintaining the Board
Diversity Policy. Additionally, I am responsible
for ensuring that this carries forward into
Board meetings, with all Directors given
opportunity to participate and contribute fully
in all meetings, and provided with sufficient
time and resources to do so. Succession
planning is undertaken with the Board
Diversity Policy in mind, and future Board
appointments are subject to its provisions.
The Policy mandates that we consider gender
balance in senior management and their direct
reports. Our Board and Executive Leadership
Team consist of both men and women, and we
note and value the diversity of experiences,
geographies, ethnicities, ages and genders
in our business and its leadership. Fully in all
meetings, and provided with sufficient time
and resources to do so. Succession planning
is undertaken with the Board Diversity Policy
in mind, and future Board appointments are
subject to its provisions.
The Policy mandates that we consider gender
balance in senior management and their
direct reports. Our Board and Executive
Leadership Team consist of both men and
women and we note and value the diversity
of experiences, geographies, ethnicities,
ages and genders in our business and
its leadership.
Our roadmap to compliance with diversity
targets for the Boards of UK listed companies
is set out under the succession planning
heading on page 122 and also on page 124.
In addition, when considering succession
planning and appointments, the Committee
gives due consideration to the advantages
of a wide range of experiences and
perspectives to innovation and breadth of
ideas, as well as potential barriers to entry
for individuals as a result of protected
characteristics (as defined by the Equality
Act 2010) they possess.
Nomination Committee report – continued
Y
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Fin
an
cia
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ea
r
20
23
: In
te
rn
al
ev
al
ua
tio
n
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Review subject 2024 Priorities and Outcomes
The Board
Notable strengths identified by the review:
• Information flow is rated highly by Board members, with a new format to
the monthly call between senior leadership and the Board working well.
• The Strategy Day was also highly rated as an exercise.
• The Board has an open culture with no concerns about either giving or
receiving “bad news”.
• Risk management has shown strong year on year improvement, and
notable successes in approach and practical benefits to the business.
Principal areas for development:
• Reconsider how time is used in Board meetings to enable more strategic-
level discussions.
• Develop the form and content of Board papers to facilitate higher-level
discussion and achieve greater efficiency of oversight.
Audit
Committee
• The Audit Committee has played a positive part in the sustained
improvement of the company’s risk management.
ESG
Committee
• While this Committee is functioning well, there is the opportunity for
greater clarity around its role and purpose. With greater clarity it will be
evident where changes in the Committee’s work would be helpful to
achieving those objectives.
Nomination
Committee
• The Committee could usefully give more time and attention to
Director development
Remuneration
Committee
• There is an opportunity to broaden the scope of the Committee’s activity
to cover company-wide pay and employment policies
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
122
123
Strategic Report
Corporate Governance
Financial Statements
Appendices
Diversity disclosures
Disclosures in this table are made in line with reporting requirements
set out in the UKLR 6 Annex 1R.
Report applicable throughout FY2024
No. of Board
members2
Percentage
of the Board
No. of senior
positions on
the Board
(CEO, CFO,
SID & Chair)
No. in
executive
management
Percentage
of executive
management
Reporting on sex and gender identity1
Men
6
75%
4
5
71%
Women
2
25%
–
2
29%
Not specified / prefer not to say
–
–
–
–
–
Reporting on ethnic background
White British or other white (including minority white groups)
6
75%
2
6
86%
Mixed / multiple ethnic groups
–
–
–
–
–
Asian / Asian British
–
–
–
–
–
Black / African / Caribbean / Black British
–
–
–
–
–
Other ethnic group
2
25%
2
1
14%
Not specified / prefer not to say
–
–
–
–
–
Notes to the table
1 The tables on page 104-105 set out the members of the Board. The population comprising ‘executive management’ for the purposes of this report are the members of the
Executive Leadership Team set out in the table on page 106 plus the three Executive Directors of the Board.
2 As Alternate Director, Yoav Papouchado is not included in this table.
Gathering of data: individuals are requested by the Compliance Team to provide the data related to their Protected Characteristics on
the basis that the business is under a regulatory requirement to report. Board members are reminded that although it is a regulatory
requirement for the business to make a report, it is not mandatory for individuals to provide this personal data to the business, and that
anyone who did not wish to disclose could compliantly be included under the heading ‘not specified / rather not say’. Data is correct as of
31st December 2024.
On 9 January 2025, changes to the Board composition were announced:
(1) Eli Papouchado retired as Non-Executive Chairman and Board Director
(2) Yoav Papouchado, as alternate director for Eli Papouchado also ceased to be a Director of the Company on the retirement of Eli
Papouchado
(3) Ken Bradley succeeded Eli Papouchado as Non-Executive Chairman
(4) Roni Hirsch was appointed to the Board as Non-Executive Director
As such, the table above is updated as of 9 January 2025 as follows:
Diversity disclosures as of 9th January 2025
No. of Board
members1
Percentage
of the Board
No. of senior
positions on
the Board
(CEO, CFO,
SID & Chair)
No. in
executive
management
Percentage
of executive
management
Reporting on sex and gender identity
Men
6
75%
4
5
71%
Women
2
25%
–
2
29%
Not specified/ prefer not to say
–
–
–
–
–
Reporting on ethnic background
White British or other White (including minority-white groups)
6
75%
2
6
86%
Mixed/ Multiple ethnic groups
–
–
–
–
–
Asian/Asian British
–
–
–
–
–
Black/African/ Caribbean/ Black British
–
–
–
–
–
Other ethnic group
2
25%
1
1
14%
Not specified/ prefer not to say
–
–
–
–
–
Notes to the table
1 Data related to Eli Papouchado is removed and data related to Roni Hirsch is input.
The Board relies on the experience and
guidance of the founders of the Company.
This means that the composition of our
Board is slow to change, delaying our ability
to diversify the Board. However, the Board
is committed to prioritising diversity in
future appointments. When assessing:
• the Board’s composition,
• identifying suitable candidates for
appointment or re-election to the
Board or
• succession plans,
the Board’s Nomination Committee
considers candidates on merit against
objective criteria having due regard to the
benefits of diversity across a range of
characteristics, such as gender, ethnicity,
nationality, sexual orientation, disability,
cultural background and socio-economic
background, as the needs of the Board
for diverse backgrounds and fields of
expertise. As part of this the Board’s
Nomination Committee shall consider the
Board Diversity Policy and any measurable
objectives therein.
The Nomination Committee will only engage
executive search firms who have signed up
to the Voluntary Code of Conduct for
Executive Search Firms. Executive search
firms will be asked to ensure that potential
candidate ‘long-lists’ reflect the Board’s
diversity commitments as well as consider
potential candidates for Non-Executive
Director appointments from a wide pool,
including those with no listed company
Board level experience; and to ensure
that any short-list of candidates displays
diversity between genders and ethnicities.
Further, we are an organization committed
to inclusivity, and have a zero tolerance
attitude towards discrimination on the basis
of any of the Protected Characteristics
listed in the Equality Act 2010.
We aim wherever possible to develop and
promote talent from within. Many of our
leadership team from Board level to their
direct reports have long and distinguished
careers within the organization. The ethos
of our Team Members is one of mutual
support, and the organization is committed
to learning and development.
Nomination Committee report – continued
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
124
125
Strategic Report
Corporate Governance
Financial Statements
Appendices
Audit Committee report
Letter from the Chair of the Audit Committee
Dear Stakeholder,
As Chair of the Audit Committee, I am pleased
to present this report for the year ended
31 December 2024. This report has been
prepared in accordance with the Code to
provide a clear, balanced, and transparent
account of the Committee’s activities and
priorities over the past year. Good corporate
governance is built on transparency and
accountability, and we welcome feedback
from all stakeholders to ensure that the
report remains both compliant and
responsive to their needs.
The Audit Committee plays a critical role in
overseeing the financial reporting process,
internal audit functions, and the Company’s
risk management and internal control
framework. In line with the Corporate
Governance Code, the Committee
comprises members with the necessary
financial and accounting expertise to
provide rigorous oversight. Additionally,
the Committee is responsible for selecting
and appointing external auditors, who
independently verify the Company’s
financial performance. In 2024, our newly
appointed external auditors conducted
their first audit of the Annual Report and
Accounts. Our objective remains to provide
stakeholders with confidence in the
Company’s financial health and long-term
viability through an independent and
transparent review process.
During the year, the Company completed
the competitive tender process announced
in the 2023 Annual Report and Accounts,
resulting in the appointment of Brightman
Almagor Zohar & Co. (a member of the
Deloitte Global Network) as external
auditors. This appointment was subject to
shareholder approval and was confirmed
at the 2024 Annual General Meeting.
The evolving landscape of corporate
reporting, particularly in areas related to
governance, strategy, risk management, and
environmental impact, has placed additional
responsibilities on the Audit Committee. We
are committed to ensuring that these
reporting requirements are met with the
necessary depth and clarity. Further details
can be found in our ESG report on page 68.
The role of the Audit Committee
The key responsibilities of the
Audit Committee are:
• Ensure that the Group’s financial systems
provide accurate and up-to-date
information on its financial position;
• Reviewing the findings of the audit with
the external auditor; including a
discussion of any major issues arising
from the audit;
• Ensure that the Group’s published
consolidated financial statements and
related announcements represent an
accurate and fair reflection of the
business and its financial position;
• Monitor the ERM framework to ensure
that financial, non-financial and ESG risks
are correctly identified, assessed,
managed and mitigated;
Stephanie Coxon
Chair of the Audit Committee
Membership of the Audit Committee
and meeting attendance
Name of Director
Meetings
attended
Eligible to
attend
Stephanie Coxon (Chair)
5
5
Marcia Bakker
5
5
Ken Bradley
5
5
Nigel Keen
5
5
In compliance with provision 24 of the
Corporate Governance Code the Board
chair is not to be a member of the audit
committee. Ken Bradley will cease to serve
on this Committee in 2025.
• Oversee the appropriate accounting
policies, internal controls and compliance
procedures necessary for legal and
regulatory compliance and risk
management; and
• Review and assess the quality of the
external audit process, as well as the
external auditor’s independence
(including responsibility for the process
of appointing and onboarding new
external auditors). Also to ensure
compliance with the Minimum Standard
for Audit Committees and External Audit
issued by the FRC.
The Audit Committee is assisted in
performing its duties by information and
reviews received from:
• The Co-CEOs;
• The CFO;
• The Chief Legal & Corporate Officer; and
• The Head of Internal Audit and Risk.
As such, the internal legal, compliance, audit
and risk teams additionally communicate with
the Committee for the performance of its
functions. The Compliance function reports
on the externally provided confidential
reporting channel (‘Whistleblower hotline’).
In the event of incidents being reported,
responsibility for overseeing investigation and
resolution rests with the Audit Committee.
The external auditors regularly engage with
the Committee throughout the financial year
in order to facilitate oversight.
Suntera Global carries out company
secretarial services to ensure that the Audit
Committee has the required documentation,
time, information and resources needed to
function effectively. The Committee is
accountable to the Board and reports
regularly to the full Board on the discharge
of its responsibilities. The Terms of Reference
of the Committee are reviewed against
the Corporate Governance Code annually
and can be found on the Company’s website.
Audit Committee activities and focus in 2024
Function
Actions in 2024
Monitor the
Group’s financial
statements
• Interim results: Reviewed the interim reports and financial statements
for the half-year period ended 30 June 2024. These were published on
29 August 2024.
• Annual results: Reviewed the 2023 Annual Report and Accounts to
ensure that the document was fair, balanced and understandable.
Monitor and review
the effectiveness
of the Group’s
system of internal
controls and risk
management
• Received regular updates on internal audit and ERM, including the
financial control framework and risk incidents and mitigating actions
• Received regular updates on and reviewed emerging risks
• Updated principal risk schedule and ERM framework
• Participated in the Board effectiveness assessment conducted by
Independent Audit Limited
• Set the internal audit plan for the year and monitored the progress
throughout the year
• Deep-dive audits by the Internal Audit and Risk team over the year
covering ESG Green House Gas Emission Reporting, Procurement and
Contract Management, and IT Backups and Recovery. Reports received,
analysis of the issues identified, and remediation plans reviewed
and challenged.
• Reviewed a number of assurance reports from the Internal Audit and
Risk team throughout the year, across different areas of financial
process and control. Evaluated summary assurance reports from 3rd
party cyber security experts.
• Tracked the progress of management actions to address deficiencies
identified through internal audits or 3rd party assurance engagements.
• Received Whistleblower hotline and other confidential and / or
anonymous reporting channel reports
• Monitored and reviewed the effectiveness of internal audit function
Oversee ethical
dealings and
compliance for
the Group
• Reviewed the adequacy of a number of key policies for the effective
and ethical governance of the Group, including the Significant
& Related Party Transaction Policy; and the Whistleblowing and
Anti-Bribery & Corruption Policies
• Reviewed the financial management information being presented
to the Board to make sure it is fit for purpose
• Met with finance teams for update on internal controls,
risk management and reporting matters
• Reviewed the FRC’s Audit Committees and the External Audit: Minimum
Standard and ensured that the Audit Committee is performing its
duties as set out
Review the
Group’s external
audit function
• Ensured completion of audit tender process, and formal appointment
of new external auditor
• Increased meetings with the external auditors to ensure
smooth transition
• Considered the audit and interim planning report from the
external auditors
• Considered the annual and interim findings report from the
external auditors
• Ensured continued engagement with the external auditors during
the external audit process
• Evaluated the performance of the external auditor
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
126
127
Strategic Report
Corporate Governance
Financial Statements
Appendices
Audit Committee report – continued
Effectiveness of the Committee
The Committee is assessed annually for
its effectiveness. The evaluation of the
Committee reviews its work against the
provisions and requirements of applicable
standards, including the Corporate
Governance Code, the Guidance on Audit
Committees and ‘Audit Committees and the
External Audit: Minimum Standard’. The
external review conducted by Independent
Audit Limited has findings that are included
on page 123. The conclusion of the 2024
assessment of the effectiveness of the
Audit Committee was that the Committee
is effective in the discharge of its duties
and compliant with the Corporate
Governance Code.
Relevant skills and experience
The Corporate Governance Code mandates
some requirements for Audit Committee
composition, including relevant skills and
experience for Committee members and
the Chair. These requirements are met
by the members of the Committee. The
members of the Committee have a
diverse range of expertise, including the
requirement for recent and relevant
financial expertise, as well as experience
in the sectors in which the business
operates. The composition of the Committee
is regularly considered by the Board and
the Nomination Committee. The Board is
satisfied that the Committee is properly
structured, and that its members have the
requisite competence and are provided
with the necessary resources for
its responsibilities.
Audit Committee schedules and resources
Meetings of the Audit Committee take place
approximately one week before Board
meetings. This schedule is structured to
permit any work arising from the Audit
Committee meeting to be carried out and
presented to the Board.
Members of the Executive Leadership Team,
key members of corporate teams and
external auditors are available to the Audit
Committee to respond to questions, or to
meet with the Committee on an ad-hoc basis.
The Committee receives monthly
reports on financial information,
information technology, operational
performance and progress against
strategy. These updates are made by
responsible executives, including the
Co-CEO, the Chief Financial Officer and
the Chief Corporate & Legal Officer.
The Chair of the Committee also receives a
monthly update on non-financial reporting
areas as part of the requirement to have
oversight of ERM and the audit schedule of
the internal audit team. These are received
from the Head of Internal Audit and Risk, who
reports directly to the Audit Committee. As
part of the annual review into effectiveness,
the Audit Committee has determined that
in discharging its responsibilities in 2024,
it had the required time and resources.
Relationship with the Board
The Audit Committee was provided with
adequate time in Board meetings to resolve
any matters of conflict between the Board
and Audit Committee. Had any such
disagreement remained unresolved, the
Audit Committee has the right to report the
issue to shareholders as part of the report
on its activities in the Annual Report and
Accounts. Accordingly, it is confirmed
that there were no such unresolved
disagreements. All matters presented by
the Audit Committee to the Board were
discussed in full, with resolution, in 2024.
External audit and external auditors
The Audit Committee considers the
appointment, re-appointment and removal
of the external auditors, reviews their
terms of appointment and negotiates fees
on behalf of the Board prior to making
recommendations through the Board
to the shareholders to consider at each
Annual General Meeting. In 2024, it was
recommended to shareholders that they
appoint Brightman Almagor Zohar & Co
(a Firm in the Deloitte Global Network)
as the Company’s external auditors.
This resolution was accordingly passed
at the 2024 Annual General Meeting.
The recommendation was made following
the tender process set out in the 2023
Annual Report and Accounts.
Appointment of Brightman
Almagor Zohar & Co
The process for appointing the external
auditors required that tender criteria be
drafted to ensure that maximum market
participation was possible. This process was
set out in the 2023 Annual Report and
Accounts. All participating firms were made
aware of the selection criteria, which were
transparent and available to participating
firms for use in their Request for Proposal
(‘RFP’) responses. A reasonable period was
allotted to allow RFP responses to prevent
any reasonable competitor being excluded
by too short a deadline. The Committee
selected from the RFPs a short list of three
firms to provide written proposals. Short
listed firms were again given time to
respond, as well as access to the Committee
Chair for further information, should this
be necessary. The Audit Committee then
reviewed and evaluated the written
proposals and received in-person
presentations from the candidates. This
enabled the Committee to select two firms
for recommendation to the Board based on
four criteria:
(1) Technical competence;
(2) Ability to challenge;
(3) Audit quality; and
(4) Independence.
The Committee recommended the two
firms to the Board, with a justification for
choosing Brightman Almagor Zohar & Co as
the preferred candidate. The Board made
the appointment in Q1 of 2024, with the
shareholders voting to approve the
appointment at the Annual General Meeting
in April 2024 for a period of one year.
The Audit Committee annually assesses, and
reports to the Board on, the independence,
objectivity and performance of the external
auditors and the quality of the audit process.
The Committee will make an annual
recommendation to shareholders on
whether or not to propose re-appointment
at each Annual General Meeting.
Oversight of the external auditors and audit
The Committee and the Committee Chair
take steps throughout the year to ensure
that they are kept up to date with the
progress of the audit, and that the audit
report is compliant with the brief and the
needs of the Committee. Given this is the
external auditors’ first year there has been
an increased number of meetings between
the external auditors and the Committee
Chair. The Committee seeks to satisfy itself
that the audit process is effective, and that
there is full, internal engagement with the
audit process. Meetings with the external
auditor throughout the year permit the
Chair and the Committee as a whole to
ensure that questions are asked, and the
Committee is satisfied that the audit is
comprehensive, and contains a full gap
analysis, including any gaps in the audit
itself. The Committee also takes steps to
challenge the external auditor on their
sources of information and basis of
conclusions. The auditor is asked to report
against the audit plan, including explanations
for any changes to the plan in operation.
The Audit Committee reports to the Board
on its conclusions about the external
auditor, including:
• An assessment of the information
sources on which the audit is based;
• When and how it has challenged
the auditor;
• An assessment on the quality of the
auditor, including the issue of auditor
independence (see ‘Review of the external
auditor’ below); and
• Any relevant stakeholder feedback.
The conclusion of the Audit Committee
as of 31 December 2024 is that it will
recommend re-appointment of the Auditor
at the 2025 Annual General Meeting.
External audit plan
Following appointment of the external
auditor, an audit plan was submitted to the
Audit Committee for discussion. The basis
of the audit plan comprised the key risks
identified by the business, and the strategy
as set out in the Annual Report and
Accounts. The audit plan has formed the
basis throughout the year for questions
and queries from the Audit Committee to
the external auditors, and the final
assessment of the Committee. Having
sought information from relevant
management functions, and conducted
multiple meetings with the external auditors,
the Committee is satisfied with the Group’s
external audit function and the integrity of
the financial and narrative statements.
2024 external audit plan
In Q3 2024, an audit plan for the 2024 audit
was presented to the Committee and
accepted for the upcoming financial year.
This is Brightman Almagor Zohar & Co.’s
first-year audit, and to support ongoing
improvement, the Committee has discussed
a number of topics, including various
aspects, including accounting policies, annual
report disclosures—such as front-half
reporting (e.g., ESG and European Public Real
Estate Association (EPRA) disclosures) – and
the internal controls framework.
The process of oversight requires the Audit
Committee to request that management is
not present for part of the meeting where
the external auditors present their
conclusions. This allows the external
auditors to speak freely and share any
views without management being present.
This also enables the Audit Committee
to assess how the external auditors
applied professional scepticism in their
procedures and to discuss any areas
where they challenged management.
With the external audit team being new
to the business, this has fostered an open
culture of inquiry, information sharing,
and constructive challenge.
Review of the external auditor
The Audit Committee reviewed the
independence and objectivity of the
external auditors, and reported to the
Board that it considered that the external
auditors’ independence and objectivity
were maintained.
This review included discussions with the
external auditors at various meetings,
reliance on the external auditor’s own
internal controls for compliance with
independence rules and ensuring
compliance with the Non-Audit Services
Policy (as further described below). When
evaluating the independence of the external
auditors, the Audit Committee also took into
consideration the quality of the audit
produced, the constitution of the audit team
being used by Brightman Almagor Zohar &
Co, communications between management
and the external audit team, and generally
how the external audit team interacts with
and challenges management.
The Audit Committee will perform a
comprehensive evaluation on the
performance of the external auditors
shortly after signing of the annual accounts.
This ensures that the external audit team
had adequate access to management and
was able to scrutinise, challenge and
familiarise themselves with the business was
a major priority for the Committee in 2024.
Policy on engaging external auditors
to supply non-audit services
The Audit Committee monitors the Group’s
relationship with its external auditors,
considering what impact the provision of
non-audit services may have on the external
auditors’ independence and objectivity.
The Company maintains a policy, which is
annually reviewed, on the engagement of
the external auditors for the provision of
non-audit services. The policy sets out the
circumstances and financial limits within
which the auditors may be permitted to
provide certain non-audit services,
whether a tender process is considered
for non-audit services and any information
which must be considered to ensure that
the non-audit services do not impair the
objectivity and independence of the
external auditors. The policy is in line with
the recommendations set out in the FRC’s
Guidance on Audit Committees, the
External Audit Minimum Standard and the
requirements of the FRC’s Revised Ethical
Standard. The Audit Committee regularly
reviews this policy for necessary changes in
response to changes in related standards
and regulatory requirements, and monitors
compliance with this policy.
The audit fees due to the external auditors
amounted to £475,000. In 2023, the previous
auditor, Kost Forer Gabbay & Kasierer,
commanded fees of £320,173.
Total non-audit fees amounted to £80,000.
In 2023, the previous auditor, Kost Forer
Gabbay & Kasierer, commanded total
non-audit fees of £61,452.
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
128
129
Strategic Report
Corporate Governance
Financial Statements
Appendices
Audit Committee report – continued
The external auditor’s non-audit services
were as follows:
The external auditor completed the interim
review of the Group’s half-year financial
results. Although this is considered to be
a non-audit service, the objective of the
interim review is aligned with the audit. The
Audit Committee considered the provision
of the non-audit service during the 2024
year and was comfortable that the nature
and extent of non-audit services provided
did not present a threat to the external
auditors’ objectivity or independence.
Internal audit
The Company has an internal audit and
risk management function which reports
directly to the Chair of the Committee. This
reporting structure is designed to ensure
maximum independence of the internal
audit function from the Executive
Leadership Team and senior management.
In addition, the Head of Risk and Internal
Audit has a dotted reporting line to the Chief
Financial Officer and Executive Director,
Daniel Kos. The internal audit function and
the Committee’s oversight of it follows
the FRC’s Guidance on Risk Management,
Internal Control and Related Financial and
Business Reporting.
The Committee is responsible for monitoring
and reviewing the effectiveness of the
internal audit function. This requires there to
be monthly meetings with the Head of Risk
and Internal Audit to assess progress against
the internal audit programme and other
relevant matters, including actions
recommended in previous audit reports.
Audit Committee meetings maintain a
standing agenda item of meeting with the
Head of Internal Audit and Risk at each
meeting without the presence of Executive
Leadership Team (unless their presence,
or those of other Board members, is
required by specific invitation to discuss
relevant matters).
The Internal Audit and Risk function
facilitates an annual refresh of the Risk
Appetite Statement. The process of
reviewing and updating this statement
requires an up-to-date risk profile of the
Group, and to agree the plan for the year
ahead. This process also necessitates a
review by the Committee of the resources
allocated to the Internal Audit and Risk
function to ensure that these are fit for
purpose, and capable of completing the
audit plan. Currently, the Internal Audit and
Risk team is comprises three full-time
employees. This figure has remained since
the recruitment of two additional team
members in 2023, and the Committee
considers that this is adequate for the
business’s requirements in the coming
12 months.
Internal audits conducted under the audit
plan present findings in a categorised form.
Major findings are those that pose the
highest risk to the business and require
immediate response. Follow up actions for
all audit findings (major, moderate and
minor) must be reported on by the Internal
Audit and Risk function to the Audit
Committee. The Audit Committee may
choose to make recommendations for
support, for example for additional
resources or follow-up actions required to
address findings. The Audit Committee is
also responsible for governance of internal
audit, and therefore must ensure that the
function has the requisite access to
records, documents, premises and
personnel needed to perform the function.
The 2024 Internal Audit Work Plan was
developed from the Enterprise Risk
Management system or forms part of
the Financial Assurance Programme.
The Internal Audit and Risk function
required the following third party external
support in its risk assessment and
assurance programme:
• Cyber Security – Third party experts
Review of the internal auditor
The Audit Committee conducts an annual
review of the effectiveness of the Internal
Audit and Risk function. The 2024 review
results were largely positive. The main
objective is to ensure the team has the
necessary skills and capacity to implement
the changes to the Corporate Governance
Code related to internal controls. The Audit
Committee is satisfied that the quality,
experience and expertise of the function
is appropriate for the business.
Financial controls
The Financial Control Framework maps
financial controls across the business and
identified control owners. Control owners
are required to confirm compliance with the
framework. This self-certification is the first
line of defence. A review of the financial
control framework in 2023 led to the
following being implemented across 2024.
Enterprise Risk Management (ERM)
Risk management is an ongoing task, with
a requirement to look ahead to emerging
risks. The Audit Committee ensures that
there is ongoing monitoring of the risk
profile of the business to ensure that it
remains current and up to date. This allows
the Committee to advise the Board to make
recommendations on the contents of the
Risk Appetite Statement set out each year.
The Company maintains an ERM system
for which the Board is responsible. The
Audit Committee maintains responsibility
for oversight and providing the Board
with guidance in the discharge of this
responsibility. It is, therefore, a standing
agenda item of the Committee to consider
the risk register and the key risks identified
by the ERM.
The Committee is responsible for
reviewing the effectiveness of controls
against risks. The method for undertaking
this task is to benchmark the ERM system
output against similar organisations using
publicly available information, as well as
guidance and standards published by the
appropriate professional bodies and
institutions. This process ensures that
there is a comprehensive annual review
of the effectiveness of the ERM system
and the control outputs.
Risk management is an ongoing task, with
a requirement to look ahead to emerging
risks. The Audit Committee ensures that
there is ongoing monitoring of the risk
profile of the business to ensure that it
remains current and up to date. This allows
the Committee to advise the Board and to
make recommendations on the contents of
the Risk Appetite Statement set each year.
Risks to the business are both internal,
and based on institutions, structures and
processes inherent to the business’s
activities, and external. External risks can
vary across regions and are affected by
factors such as the industrial sectors in
which the Company operates, macro-
economic considerations, changes to local
and global market trends, geo-political
causes, social and labour conditions, and
ecological considerations. These are all
considered by the Audit Committee as
part of ongoing review, and wherever
necessary, controls or other response
measures are implemented.
2024 Internal Audit Work Plan
Areas of focus
Audit subject
Procurement and
Contract Management
Thematic audit to assess the design and effectiveness of controls
relating to procurement and contract management processes
across the business.
ESG Green House Gas
Emission Reporting
Audit to evaluate the data collection and review processes in place to
ensure the accuracy, reliability, and completeness of the Group’s
greenhouse gas emission disclosures in the Annual Report.
IT Backups and
Recovery
Thematic audit to evaluate the effectiveness of the processes and
controls surrounding the current IT Data Backup and Disaster
Recovery (DR) programme.
Financial Key Control Testing
Hire to Retire
Testing of key HR system and Payroll controls
Procure to Pay
Testing of key financial controls throughout the entire
purchasing cycle
Reserve to Cash
Testing of key financial controls throughout the entire revenue cycle
Treasury and Cash
Management
Testing of key cashflow forecasting, debt covenant oversight and
banking controls
Record to Report
Testing focused on period-end accounting controls, and
tax compliance
Some of the audits specified above identified areas for improvement, or suggested
enhancements to procedures and controls. Mangement has addressed these in 2024, or,
dependent on the timetable set for improvement or enhancement, is continuing to address
them through 2025.
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On the operational level, the ERM framework
takes a granular approach. The Internal
Audit and Risk function maintains a
functional-level risk register as well as an
emerging risk profile. The Audit Committee
oversees and challenges the results of this
risk assessment approach.
Climate change is a significant factor in the
risk profile of the group. As such, a distinct
process of climate-related risk review is
conducted by the Head of Internal Audit
and Risk alongside the ESG Manager of the
Company. The Audit Committee oversees
this process. Outputs of climate risks,
reporting frameworks and legislative
compliance are in the ESG report on
page 68.
The Internal Audit and Risk function has
provided a report on the principal risks
of the Group on page 90.
Confidential reporting channel
The Committee reviews the adequacy and
security of the Company’s arrangements
for its employees, contractors and external
parties to raise concerns, in confidence,
about possible wrongdoing in financial
reporting or other matters. The Compliance
team, which receives any reports made
through the third party provided
confidential reporting (‘whistleblowing’)
channel provides quarterly updates to
the Committee.
Financial reporting
The Audit Committee has reviewed the
Annual Report and Accounts. In its opinion,
taken as a whole, it is fair, balanced and
understandable, and provides the
information necessary for stakeholders
to assess the Company’s position and
performance, business model and strategy.
The Audit Committee reviews draft annual
and interim reports. The Audit Committee
discusses with the President & Co-CEO, the
Co-CEO, Chief Financial Officer and external
auditors the significant accounting policies,
estimates and judgements applied
in preparing these reports.
The overall responsibility for approving
annual and interim statements and other
governance statements is carried out by
the Board, in accordance with the Schedule
of Matters Reserved for the Board.
The Audit Committee has challenged the
executive and senior management on the
following matters:
• Viability / Going concern – In accordance
with legal requirements and best
practices, this remains a key focus for
the Audit Committee. The committee
assessed the appropriateness of the
viability and going concern evaluation
and recommended that the Directors
collectively approve and sign the
statements on page 155.
• Climate change/ESG – The Audit
Committee independently evaluates the
risks and opportunities associated with
climate change and other ESG matters.
It has also collaborated with the ESG
Committee on the Group’s approach to
carbon emissions reporting.
• Information security – The Audit
Committee continues to oversee
information security risks, holding
regular meetings with the IT Security
Manager and the Head of Internal Audit
and Risk. These updates cover the
technology risk environment, ongoing
system controls, monitoring, and
emerging threats. Based on these
insights, the committee instructs
third-party assurance as needed
throughout the year.
• Impairment testing – The Group’s
impairment review requires significant
judgement in estimating the recoverable
amount of its intangible assets, property,
plant and equipment, and the IFRS 16
right-of-use asset. The Audit Committee
reviews the independent property
valuations that management uses in
order to support its approach to
impairment reviews. Additionally the
Committee engaged in a thorough
discussion with the Chief Financial Officer
regarding the methodology used for
these reviews.
• Alternative Performance Measures
(APMs) – In reviewing the Annual Report
and Accounts, the Audit Committee has
challenged management on the
completeness, as well as the use and
definitions of Alternative Performance
Measures (APMs).
• Additionally, other significant issues
typically considered include the
complexity of the financial statements,
given the Group’s size and its multiple
legal entities.
Stephanie Coxon
Chair of the Audit Committee
ESG Committee report
Letter from the Chair of the
ESG Committee
Dear Stakeholder,
2024 has been my first full year as Chair of
the ESG Committee, taking over from Ken
Bradley. ESG is an extremely fast-moving
area, and the business has sought to rise to
the challenges posed by this. We are very
aware of the increased need for information
about ESG from all of our stakeholders,
as well as the regulatory requirements,
especially regarding reporting, for listed
businesses. The business has made a
comprehensive ESG report on pages 68 to
89. We are excited by the progress we have
made in 2024, as well as some upcoming
milestones in 2025.
Role of the ESG Committee
The role of the ESG Committee is unlike those
of the other Committees of the Board, which
are mandated by regulation and good
corporate governance. The ESG Committee
reviews its own existence on an ongoing
basis, as its functions should be absorbed by
the full Board and the other Committees of
the Board as ESG is more and more
embedded in all our operations and oversight
activities. The Committee takes the view that,
as the business is subject to a changing
regulatory environment, it is appropriate for
the ESG Committee to take responsibility for
oversight in this area. In particular,
environmental and social matters were
previously considered ‘non-financial
reporting’ by businesses under previous
legislation. Full integration of ESG strategic
goals into the business strategy and the
replacement of the Non-Financial Reporting
Directive with new reporting frameworks
shifts our reporting from ‘non-financial’
to a core part of the business’s financial
statements. With this in mind, and the
existence of the business’s distinct ESG
strategy, it is appropriate that the Board
maintains a committee to take responsibility
for these matters.
Strategic oversight
A priority of 2024 has been to integrate
and harmonise the ESG strategy across
the regions. To that end, a major workshop
was held in Pula in Croatia in 2024 to look at
the ESG strategy and reporting on metrics
and targets to ensure that our reporting
can be consolidated across the Group. As
a business listed on the Zagreb Stock
Exchange, Arena Hospitality Group is obliged
to undertake its own, separate reporting,
whilst also forming part of the consolidated
financial statements for PPHE Hotel Group. It
is very important, therefore, that reporting
tools are harmonised across all regions in
order to ensure that, region by region, we
are using the same methodologies, or, where
this is not possible, that this is clearly set out
in our reporting.
We have overseen the business’s
approach to carbon reporting and its
journey towards setting science-based
targets. Specifically, we want to see publicly
available, independently validated targets
for net zero, which we expect to submit to
the Science-Based Targets Initiative by the
end of 2025 for validation. To that end, the
business has kept the Committee informed
about the strategic approach to meeting net
zero, including the third party engagements
on our net zero roadmap. The Committee
has looked at the issue of data reliability in
carbon reporting in the context of reliance
on authoritative conversion factors to
determine the tonnes of carbon dioxide
equivalent emitted by the business. The
Committee has tasked the business with
ensuring that data used in reporting is
collected through a reliable process,
auditable and that methodology statements
clearly set out the process used.”
We monitor the progress of the real estate
portfolio in attaining the required building
certifications (for example, the BREEAM
Excellent certification obtained for art’otel
London Hoxton in 2024). This ensures that,
as the business grows, we can be confident
that the asset portfolio is performing within
the risk appetite for carbon performance
accepted by the business.
Marcia Bakker
Chair of the ESG Committee
Membership of the ESG Committee
and meeting attendance
Name of Director
Meetings
attended
Eligible to
attend
Marcia Bakker (Chair)
4
4
Ken Bradley
4
4
Stephanie Coxon
4
4
Nigel Keen
3
3
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ESG Committee report – continued
Looking forward to 2025 and inputs into
our wider decarbonisation strategy, Scope
3 will be an area of engagement. Scope 3
forms the bulk of our carbon emissions, and
therefore we will be focusing on what areas
can provide significant reductions and how
this can be achieved. Only in a collaborative
approach with our suppliers can we set
realistic goals for carbon reduction specific
to the products we require for our business
to function.
Social initiatives
As can be seen in our ESG report, social
initiatives are important to the business.
They are key to good corporate citizenship
of our local communities, and in ensuring
that team members remain fully engaged.
2024 saw the launch of an employee
volunteering scheme, through which team
members can volunteer for an approved
organisation (for example, with a charity
partner) on work time. Monitoring uptake
of this new opportunity will allow us to track
the success of our initiatives and of our
internal communication strategies.
2025 and beyond
It is intrinsic to the activity of the
Committee to be future-focused. More work
on benchmarking, baselining and feeding
the data into targets will continue in 2025.
Further, as part of our three-year cycle,
we are refreshing our double materiality
assessment for ESG.
Marcia Bakker
Chair of the ESG Committee
Remuneration Committee report
Letter from the Chair
of the Remuneration Committee
Dear Stakeholder,
I am pleased to present the Report of the
Remuneration Committee for the year ended
31 December 2024. Alongside the Report, we
are also presenting the new Remuneration
Policy for 2025-2027. Both the Report and the
new Remuneration Policy will be presented
for an advisory vote to shareholders at the
forthcoming Annual General Meeting. The
advisory vote is in line with the standard
of corporate governance expected of
companies listed on the London Stock
Exchange. As a Guernsey-incorporated
company, PPHE Hotel Group is subject to the
requirements of The Companies (Guernsey)
Law, 2008.
Nigel Keen
Chair of the
Remuneration Committee
Membership of the Remuneration
Committee and meeting attendance
Name of Director
Meetings
attended
Eligible to
attend
Nigel Keen (Chair)
5
5
Stephanie Coxon
5
5
Ken Bradley
5
5
Marcia Bakker
5
5
2024 performance
The Group was pleased to report a solid
performance against several of its key
performance indicators in 2024, especially
against a challenging macroeconomic and
geopolitical backdrop. Our teams focused
on continuing to provide an excellent guest
experience, improving our operational
performance, driving efficiencies and
launching new properties from our pipeline,
most notably art’otel London Hoxton. We
expect to see the full fruits of this landmark
investment project, as well as from our
other recent investments and openings
from 2025 onwards. Our exciting new and
forthcoming openings in London and Rome
are prestigious additions to the art’otel
brand, and I would like to thank everyone in
the Company for their focus and hard work
in delivering these new projects as well as
driving the day-to-day performance of our
established properties.
Workforce remuneration
Remuneration decisions for executives
are always made in the context of the
Remuneration Committee’s responsibility
for oversight of remuneration across the
workforce as a whole. The Company reviewed
employee pay, and considered workforce pay
increases. In addition, looking forward to
2025, a full regrading of employee pay to
rationalise and simplify our structures is
intended to lead to more transparent, fairer
outcomes for everyone. More details on
workforce pay are set out in the tables on
page 146.
Considerations applicable to workforce pay
assessment include ongoing inflation and
cost-of-living pressures. These can vary in
intensity across our markets but require us
to focus on pay awards and other benefits
available to lower-paid workers. Recruitment
and retention across the spectrum remain a
challenge in the hospitality industry, notably
so in the UK, and our benchmarking and
review exercised are intended to ensure that
we are an attractive proposition, competitive
and capable of fulfilling employee needs.
As well as pay, we also take seriously our
responsibility to support team members
with non-pay benefits. This takes a wellbeing-
based approach and seeks to provide
services aimed at the necessities of life.
Benefithub, comprising online tools
accessible to employees to assist them with
accessing state benefits, debt counselling
and financial wellbeing, is part of this, as well
as more traditional forms of support, such
as the provision of two meals a day to all
employees, regardless of whether they are
working that day, and support with travel to
work. We are pleased that travel allowances
in the Netherlands are at the maximum
level permissible.
Our Annual Pay Review exercise analyses the
UK and Netherlands as applicable comparator
regions for executive pay, reflective of the
structure of the Group. It requires us to look
at local inflationary, legislative and market
conditions, and make pay awards accordingly.
In 2024, the UK government adjusted National
Insurance payments for employers, which
have increased the costs to the Company of
employing team members. In the Netherlands,
annual pay review increases are in line with
collective labour agreements by law. Pay
outcomes in each region for 2024 were
as follows:
UK
Pay has been increased in line with the
National Minimum Wage (NMW), with
adjustments made for all pay bands in a
decreasing scale. Employees currently paid
the NMW received an increase of 9.5%. The
average pay award across all brackets sits
at 7.3%.
Pay Bracket
Avg. % of Increase
<=30k
7.90%
>30k <=45k
6.50%
>45k <=60k
5%
>60k <=85k
3%
>85k
3%
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Remuneration Committee report – continued
Netherlands
Pay has been increased in line with the
HORECA Collective Labour Agreement for
2024, with an average pay award of 10.2%.
Please see below the % increase per pay scale.
Salaries for employees that are currently
being paid above the salary scales received
an increase of an average rate of 4%.
Function Group (Scale)
% of Increase
II
9.5%
III
10.5%
IV
12%
V
12%
VI
9%
VII – XI
8%
ESG
Year-on-year, the ways in which we are
accountable to stakeholders for ESG
performance are increasing. 2024 was the
first year in which I served as a member of
the ESG Committee of the Board, which is
responsible for our oversight of our
strategic objectives and targets.
Stakeholder engagement increasingly
focuses on ESG, and KPIs for this are being
rolled out. Often, strong performance on
vital ESG metrics such as carbon emissions
goes hand-in-hand with operational cost
minimisation, so both financial and ESG
objectives are served by good performance
in this area. More detail on carbon emissions
is to be found in the ESG report and in the
report of the ESG Committee.
Remuneration Policy implementation
The Committee has seen good
performance with the majority of KPIs in
2024. The Committee recognises that the
total reward package for executives is below
its peer group; however, the Committee is
comfortable that, in the circumstances,
the total reward package is sufficiently
incentivising to retain senior talent.
A detailed analysis of the implementation
of the Policy is set out below.
Base salary
Base salaries for executive Board members
were adjusted in 2023 and remained stable in
2024 with inflationary increases. Looking
forward to 2025 (see the new Remuneration
Policy on page 148), as of 1 April 2025, the
President & Co-CEO will receive an increase
of 2.7% in line with CPI. The Co-CEO and the
CFO will each receive an increase of 2.5%.
This is below the increase provided to the
wider workforce.
The Remuneration Committee is satisfied
that base pay for the Co-CEOs remains
aligned with the wider market, and that
therefore an increase to base pay is
consistent with market benchmarking and
the goal of retaining talent. By comparing
base pay with comparable roles for
executives, and with the workforce as a
whole, the Committee has concluded that
the base pay levels, as shown in the table
below, are correct to ensure alignment with
the workforce, with stakeholder feedback,
and with the goal of retaining talent.
Year-on-year base salary figures:
Boris
Ivesha
Greg
Hegarty
Daniel Kos
2023
550,000
496,125
479,736
2024
573,100
511,009
485,889
2025
588,574
523,784
498,036
Pension
Only base salary is pensionable. The
Remuneration Committee has, year-on-
year, sought to adjust historic pension
arrangements to ensure that these are now
fully aligned with governance requirements
and with workforce pensions. Pensions are
aligned with the workforce as a whole.
Executive Directors’ pension allowances are
further governed by the local rules in the
region of employment. Subject to these
rules, they can be taken as a cash
supplement or a contribution to the Group
Personal Pension Plan or a combination
of both.
In 2024, the pension contributions for the
President & CEO and Co-CEO were 5% of their
base salaries. Executive pension contributions
are all aligned to or below the Group’s wider
workforce in the country of employment.
Average pension contributions for the wider
workforce in the relevant regions were as
follows:
UK
Netherlands
3%
8.4%
Annual bonus performance measures
The annual bonus for 2024 included a cash
element and a share element, using the
performance metrics outlined below. The
cash bonus had a maximum entitlement of
six monthly salaries.
Cash bonus
Financial metrics were revenue and gross
operating profit with the executive achieving
94.5% on the revenue target and 95.9%
on the GOP target. As a result, with the
maximum potential of the financial criteria
being 70% of the cash bonus, and based
on the outcome, the Executives had been
awarded 35% of the maximum cash
bonus entitlement.
Non-financial metrics were targets
of guest satisfaction and employee
engagement. Guest satisfaction reached
87.8%, representing a continuing trend
of year-on-year improvement since 2021.
Employee engagement, reached 84.5%,
again, representing year-on-year
improvement since 2022. Please see
page 39 for further information.
With the executives achieving 100% on guest
satisfaction target and 100% on employee
engagement target, entitling the executives to
15% of the maximum cash bonus entitlement.
The non-financial targets further comprised
individual targets per executive as follows:
Personal targets of Boris Ivesha
• Advancement of ESG Strategic Target
Setting: Lead the development and
integration of a robust ESG framework,
ensuring alignment with global
sustainability standards, regulatory
expectations, and investor priorities. This
includes setting measurable ESG targets
across operations, development, and
supply chain initiatives.
• Successful Co-CEO Transition: Ensure
a seamless leadership transition by
maintaining business continuity, driving
strategic initiatives, and fostering strong
stakeholder engagement. Key objectives
include knowledge transfer, leadership
alignment, and maintaining investor
confidence throughout the process.
• Substantial Progress on Pending
Planning Approvals: Drive forward
critical development projects by securing
planning approvals in key markets,
ensuring that regulatory milestones are
met in a timely manner to enable future
growth and expansion.
• Expansion and Development of the
art’otel Brand: Accelerate the expansion
and positioning of the art’otel brand
across strategic locations, ensuring
brand differentiation, operational
readiness, and commercial success
through effective partnerships
and execution.
Personal targets of Greg Hegarty
• Implementation of a New F&B
Operating Model to Enhance Restaurant
Performance: Oversee the rollout of a
refined food and beverage strategy aimed
at optimizing restaurant operations,
increasing profitability, and enhancing
guest experience. This includes improving
cost control measures, menu engineering,
and operational efficiencies across
the portfolio.
• Reduction of Gas Consumption Across
Hotel Operations: Implement targeted
initiatives to drive energy efficiency and
sustainability in hotel operations, with
a focus on reducing gas consumption
through technology adoption, process
optimization, and renewable energy
solutions where feasible.
• Strengthening Alignment and Efficiency
Across Commercial Functions in the
Hospitality Management Platform:
Enhance collaboration and integration
across revenue management, sales,
marketing, and digital functions to drive
a more data-led, performance-driven
commercial strategy that maximizes
topline growth and profitability.
• Successful Openings of the 2024 Pipeline:
Ensure the timely and seamless opening
of new hotels in the 2024 pipeline,
focusing on operational readiness, brand
positioning, and commercial ramp-up to
achieve strong early performance and
guest satisfaction
Personal targets of Daniel Kos
• Implementation of Real-Time Carbon
Reporting Tools: Develop and integrate a
robust carbon tracking system to provide
ongoing visibility into the company’s
environmental impact, enabling better
decision-making and compliance with
sustainability commitments.
• Enhancing Operational Efficiency
Through Robotics and AI in Finance:
Leverage automation, AI, and robotics to
drive efficiency in the central finance
function, streamlining processes such as
accounts payable, revenue reconciliation,
and forecasting to improve accuracy and
reduce manual workload.
• Optimizing Housekeeping Efficiencies to
Lower Cost per Occupied Room:
Implement productivity-enhancing
measures in housekeeping operations,
including labor optimization, technology
adoption, and process improvements to
reduce costs while maintaining high
service standards.
• Successful Refinancing of the Dutch
Facility: Lead the refinancing strategy for
the Dutch asset portfolio, securing
favorable terms to optimize capital
structure, enhance financial flexibility,
and support long-term investment in
key assets.
Share bonus
The 2024 annual bonus included a share
element. This award will be granted following
publication of the Report.
In total, the 2024 annual bonus for
executives, including the cash and share
elements, was within a range of 28% to
60% of base salary and well within the cap
permitted under the Remuneration Policy.
The Group’s annual bonus programme was
well under the maximum amount permitted
under the Remuneration Policy. Outcomes
for each Director for 2024 were as follows:
Boris
Ivesha
Greg
Hegarty
Daniel
Kos
Cash award
160,538 160,538 160,538
Share award*
– 147,544 147,544
Total award
160,538 308,082 308,082
* Calculation is based on a three months average
share price to on 31 December 2024 (£12.3
per share).
Long-Term Incentive Plan (LTIP)
No LTIP is awarded for the year.
After the balance sheet date, the 2022
awards have vested. The Committee
recognises that the LTIP performance
target in relation to the Total Shareholder
Return (TSR), which equites to 50% of the
awards (46,500 options), was not met during
the performance period. However, after
thorough consideration of the broader
context, including macroeconomic
challenges such as rising interest rates,
inflationary pressures, and a volatile real
estate environment, in 2025 the Committee
concluded that it is appropriate to exercise
discretion and grant the full LTIP allocation.
What follows is a full Report on remuneration
in 2024, and Policy table for the new
Remuneration Policy, which I very much look
forward to presenting to shareholders at
our Annual General Meeting for 2025.
Nigel Keen
Chair of the Remuneration Committee
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Remuneration Report 2024
Remuneration Committee membership and meeting attendance
The Committee is composed of four independent Non-Executive Directors. No member of the Remuneration Committee is considered to have
a personal financial interest in matters to be decided by the Committee. As the Chair, I satisfy the independence and service requirements of
Provision 32 of the Corporate Governance Code.
The Co-CEOs, CFO and Chief Corporate & Legal Officer are invited to attend meetings as appropriate depending on the items on the agenda.
The Committee considers their views when reviewing the remuneration of Executive Directors and other senior executives; however, no
Directors are involved in the consideration of their own remuneration and only members of the Committee have the right to vote at
Committee meetings.
The Committee seeks independent advice as appropriate.
Remuneration Committee activities and focus in 2024
Function
Actions in 2024
Remuneration Policy
• Drafted a new Remuneration Policy for advisory shareholder vote at 2025 AGM.
• Implemented remuneration in line with Remuneration Policy, judging against the following criteria:
• Individual performance against targets set at beginning of 2024;
• Link to strategy;
• Overall performance of the business as a whole;
• ESG performance; and
• Stakeholder interest in long-term sustainable value creation.
Executive Director and senior
management remuneration
review
Review of Executive Director remuneration by assessing basic pay, pensions, benefits and other incentives
against performance criteria and alignment to workforce, culture and objectives.
Set targets and
incentive schemes
• Review of incentive schemes to ensure that outcomes are not formulaic, but appropriate to the
objectives and to shareholder interest.
• Set targets for 2025
Workforce remuneration and
benefits policies
• Review of workforce remuneration with objective of ensuring that executive Director remuneration is
properly aligned.
• Review of workforce gender pay gap and senior executive to average worker pay ratios.
Role of the Remuneration Committee
The key responsibilities of the Committee are:
• putting in place and periodically reviewing the Policy for the remuneration of the Chairman, Executive Directors and senior management
to ensure fair and responsible rewards and incentives with a clear and proportionate link to corporate and individual performance;
• ensuring that the Policy is clear, transparent, predictable, simple and therefore suitable for publication for the purpose of shareholder
inspection and informing the advisory vote at the Annual General Meeting;
• within the terms of the Policy, determining the individual remuneration of each Executive Director and C-Suite, ensuring that
implementation of the Policy does not create formulaic results, but that outcomes are instead clearly proportionate to objective
performance and within the reasonable expectation of shareholders;
• reviewing remuneration levels, including pension arrangements, bonuses and other benefits across the Group to ensure alignment
between executive remuneration and the workforce as a whole and between remuneration and creation of shareholder value;
• reviewing the alignment of incentives and rewards with culture, taking these into account when setting the policy for Executive Director
remuneration;
• consulting with the CEO in setting the levels of remuneration for the C-Suite;
• approving the design of, and determining targets for and conditions attached to, any long-term incentive schemes operated by the Group,
including pension arrangements, bonuses and other benefits; and
• the engagement and determining the independence of any external remuneration advice that might be considered necessary from time
to time.
The Committee’s terms of reference are annually reviewed to ensure compliance with the Code and ongoing strategic alignment with the
Company, with the latest updated terms of reference approved in 2024 and available on our website.
Remuneration Policy 2022-2024
Introduction
The Policy under which executive Director
remuneration was made in 2024 came into
effect on 1 January 2022 for a period of three
years. It was authorised by an advisory vote
of shareholders at the Annual General
Meeting in April 2022. In each year of its
operation, the Committee has undertaken
responsibility to keep the Policy under review
and ensure that implementation is in line with
the purpose of the Policy’s design, and with
the culture, values and strategy of the
business. The Policy was designed with
the interests of employees, shareholders
and other stakeholders in mind, and was
proposed mindful of the impact of the
Company’s operations on the community and
the environment. The Committee and the
Board considered the Company’s reputation
and relationships with the places in which
the Company operates before proposing
the Policy.
Purpose of the Policy
• Promote the long-term sustainable success
of the Company and support its strategy
• Ensure that the Company’s remuneration
structures are aligned to the Company’s
purpose, strategy and entrepreneurial
culture
• Provide an appropriate balance to utilise
remuneration to attract, retain and
motivate the Company’s leadership to
drive the strategic vision of the
Group successfully
Policy table
(1) Base salary
1. Purpose and link to strategy
To provide a market competitive salary that will retain, attract and incentivise executives with the right expertise who are
instrumental in driving and growing the business and delivering the Company’s strategic goals.
2. Operation
The salary payable to Executive Directors will normally be capped at the upper quartile of the relevant market benchmark for the role
under review. This maximum salary represents the highest end of the range at which the Committee would expect the base salary to
be set, rather than the actual amount to be paid. There is no separate cap on the annual increase to base salaries. However, the
Committee will normally determine the appropriate level of increase for Executive Directors taking into account the general level of
increase for the broader workforce, but on occasion may need to make a more significant increase to recognise additional
responsibilities, or an increase in the scale or scope of the role.
(2) Benefits
1. Purpose and link to strategy
To provide market competitive benefits consistent with role.
2. Operation
Benefits vary between regions and would typically include annual leave, wellbeing day, occupational sick pay, health screening,
personal accident insurance, and participation in all employee share schemes. In the UK, these would include in addition medical
insurance and life assurance, and in the Netherlands, car allowances. In line with business requirements, other expenses may be paid,
such as relocation expenses, together with related tax liabilities.
3. Maximum potential value
We do not consider it appropriate to set a maximum benefits value as this may change periodically and by region.
(3) Pension
1. Purpose and link to strategy
To attract and retain talent by enabling long-term pension saving.
2. Operation
Executives can choose to participate in a defined contribution arrangement or may receive a cash equivalent. A salary supplement
may also be paid as part of a pension allowance arrangement.
4) Annual
bonus plan
1. Purpose and link to strategy
To incentivise and reward the delivery of near-term business targets and objectives.
2. Operation
The annual bonus scheme is a discretionary scheme and is reviewed prior to the start of each financial year to ensure that it
appropriately supports the business strategy. Performance measures and stretching targets are set by the Committee. Bonuses are
normally paid in cash but may also be awarded in deferred share awards. Actual bonus amounts are determined by assessing
performance against the agreed targets typically after year end. The results are then reviewed by the Committee to ensure that any
bonus paid accurately reflects the underlying performance of the business.
Where share awards are granted as part of the annual bonus plan, they are held by the individual for one year subject to clawback
provisions. Circumstances include: a material misstatement, serious misconduct, a material failure of risk management, restatement
of prior year results, corporate failure, or serious reputational damage to any Group company.
3. Maximum potential value
150% of base salary.
4. Performance metrics
Performance measures are selected to focus executives on strategic priorities, providing alignment with shareholder interests and
are reviewed annually. Weightings and targets are reviewed and set at the start of each financial year.
The Committee may at its discretion adjust the outcome under the formulaic measures where it considers it is appropriate to do so to
better reflect overall Company performance.
Remuneration Committee report – continued
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
138
139
Strategic Report
Corporate Governance
Financial Statements
Appendices
Policy table – continued
5) Long-term
share
incentive plan
1. Purpose and link to strategy
The LTIP scheme adopted in 2022 allows for a framework for the award of market value options, salary-related options, deferred
bonus awards and performance share awards to all employees. The long-term and phased vesting of these awards, along with the
ability of the Committee to apply additional holding periods, are designed to:
• drive and reward sustainable performance over the long term;
• align the interests of executives and shareholders; and
• support talent retention.
2. Operation
The LTIP allows for the award of the following options which are subject to the rules of the LTIP:
• Market value options – options that are linked to the market value of the shares in the Company;
• Salary-related options – whereby employees agree to a reduction in their base salary in exchange for the right to acquire shares
at nil-cost. These options normally vest after 12 months subject to an additional six-month holding period;.
• Performance share awards – options which are granted subject to specified performance targets.
Notwithstanding the extent to which any performance target is satisfied, the number of vested award shares may be adjusted by the
Committee to ensure that the number of vested award shares is appropriate taking into account the underlying business
performance of the Group.
These awards are subject to the rules of the scheme which may include: long-term vesting periods prescribed by the Committee upon
grant; good-leaver and bad-leaver provisions allowing the Committee to exercise discretion as to when it might be appropriate for an
award to vest in spite of the relevant employee leaving the Group; post vesting holding periods determined by the Committee at the
time of the award; and share capital dilution limits. The plan allows dividends or dividend equivalents to accrue, subject to the
Remuneration Committee’s discretion.
3. Maximum potential value
The aggregate market value (as determined by the Committee at or prior to the award date) of shares in respect of which
performance share awards and/or restricted stock awards are made to an employee in any financial year are capped at 150% of the
employee’s annual base salary at the award date.
4. Performance metrics
The performance measures applied to LTIP awards are reviewed annually to ensure that they remain relevant to strategic priorities
and aligned to shareholder interests. Weightings and targets are reviewed and set prior to each award. Performance measures will
include long-term performance targets, of which financial and/or share price-based metrics will comprise at least two-thirds of the
award. Quantifiable non-financial metrics, key to business performance, will be used for any balance.
Any material changes to the performance measures from year to year would be subject to prior consultation with the Company’s
controlling shareholders. The Committee may adjust the number of shares realised if it considers such adjustment is justified based on:
(a) the performance of the Company, any business area or team;
(b) the conduct, capability or performance of the participant; or
(c) the occurrence of unforeseen events or of events outside the participant’s control.
Notes to the Policy table
The Committee may make minor amendments to the Policy set out above (for regulatory, exchange control, tax or administrative purposes, or to take account of a change in
legislation). As the Company is registered in Guernsey, shareholders’ approval is not required in connection with the Policy.
The Executive Directors may request, and the Company may grant, salary and bonus sacrifice arrangements.
The LTIP rules permit the substitution or variance of performance conditions to produce a fairer measure of performance as a result of an unforeseen event or transaction.
They include discretions for upwards adjustment to the number of shares to be realised in the event of a takeover, and scheme of arrangement or voluntary winding up.
Non-significant changes to the performance metrics may be made by use of discretion under the performance conditions. Awards are normally satisfied in shares, although
there is flexibility to settle in cash.
The Committee reserves the right to make remuneration payments and payments for loss of office (including exercising any discretions available to it in connection with such
payments) that are not in line with the Policy table set out above where the terms of the payment were set out and approved prior to the date the Policy came into effect. For
these purposes, ‘payments’ include the Committee determining and paying short-term and long-term incentive awards of variable remuneration.
2022-2024 Remuneration Policy – continued
Non-Executive Directors’ fees
Base fee
The Non-Executive Director fees are decided
by the Board in accordance with the
Company’s articles of incorporation. This fee
is the same for each Non-Executive Director.
The Committee approved an increase of 2.5%
in line with the wider workforce in Q1 2025.
Chairman fee
The Chairman receives a set fee which is set
by the Remuneration Committee and agreed
by the Board. The Chairman’s fee is
determined by taking into account the time
commitment and responsibilities of the role,
as well as the role holder’s skills, gravitas
and qualifications to lead the Board. No
Director may participate in the decision-
making relating to their own remuneration.
Additional fees
Non-Executive Directors are paid a set
additional fee for being Senior Independent
Director, a member of a Board Committee
and for chairing a Board Committee. This
fee is the same for each Non-Executive
Director, with exception of the Deputy Chair,
who attracts an additional fee for the role,
and the Senior Independent Director who
attracts an additional fee for the role.
Appointment term and other matters
The Non-Executive Chairman was appointed
to a term ending at the Annual General
Meeting in 2028. All other Non-Executive
Directors are appointed to terms ending at
the Annual General Meeting in 2028 (all are
subject to annual re-election), unless
terminated sooner.
All Directors retire and are offered
re-election each year at the Annual General
Meeting.
Non-Executive Directors are not entitled to
bonuses, benefits or pension scheme
contributions or to participate in any share
scheme operated by the Company.
In addition to any remuneration payable,
a Non-Executive Director may be paid
reasonable travel, hotel and other expenses
properly incurred in discharging the
Director’s duties.
Fees cease immediately in the event the
Non-Executive Director ceases to be
a Director.
Directors are entitled to the benefits
afforded by the Group’s Directors and
Officers Insurance.
The maximum potential value is prescribed by
the Articles of Association of the Company.
Term and termination
• Boris lvesha has a contract which may
be terminated on 12 months’ notice by
the Group or on six months’ notice by
Boris lvesha.
• Daniel Kos has a contract which may be
terminated on six months’ notice by the
Group or on three months’ notice by
Daniel Kos.
• Greg Hegarty has a contract which may
be terminated on 12 months’ notice by the
Group or on six months’ notice by Greg
Hegarty. There are provisions for earlier
termination by the Group in certain
specific circumstances.
• Each Non-Executive Director has specific
terms of appointment. The Chairman’s
letter of appointment provides for an
indefinite term terminable on three
months’ prior notice by either side or
immediately upon the Board passing a
resolution to remove the Chairman as
a Director.
• The Non-Executive Directors’ terms
of appointment currently end at the
Annual General Meeting held in 2025.
• All the Non-Executive Directors’
appointment letters (including the
Chairman’s) are subject to termination
by either side on three months’ notice.
• Other than salary and benefits in relation
to the notice period, the letters of
appointment contain provisions for
termination by the Group in certain
specific circumstances. The letters of
appointment are available for inspection
at the Company’s registered office.
Dates of the Directors’ service contracts are as follows:
Director
Date of appointment
Term of appointment
Subject to annual
re-election
Notice period
Eli Papouchado
26-Jun-07
Indefinite
Yes
3 months
Boris Ivesha
14-Jun-07
Indefinite
Yes
12 months from Group; 6 months from
Boris Ivesha to the Group
Daniel Kos
27-Feb-18
Indefinite
Yes
6 months from Group; 3 months from
Daniel Kos to the Group
Greg Hegarty
23-May-23
Indefinite
Yes
12 months from Group; 6 months from
Greg Hegarty to the Group
Ken Bradley
04-Sep-19
Annual General Meeting 2028
Yes
3 months
Nigel Keen
20-Feb-20
Annual General Meeting 2028
Yes
3 months
Stephanie Coxon
07-Aug-20
Annual General Meeting 2028
Yes
3 months
Marcia Bakker
06-Dec-22
Annual General Meeting 2028
Yes
3 months
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
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141
Strategic Report
Corporate Governance
Financial Statements
Appendices
The Executive Directors’ service contracts
do not contain specific provision for
compensation in the event of removal at an
Annual General Meeting. In the event of early
termination, some Directors may be eligible
for payments in lieu of notice. When
determining exit payments, the Committee
would take account of a variety of factors,
including individual and business
performance, the obligation for the Director
to mitigate loss (for example, by gaining new
employment), the Director’s length of service
and any other relevant circumstances, such
as ill health. A departing Director may also be
entitled to a payment in respect of statutory
rights. The Committee would distinguish
between types of leaver in respect of
incentive plans. ‘Good leavers’ (death, ill
health, agreed retirement, redundancy or
any other reason at the discretion of the
Committee) may be considered for a bonus
payment having completed the full year, and
part-year bonus payments may be paid and
LTIP awards may vest at the usual time taking
into account performance conditions and
pro-rating for time in employment during the
performance period, unless the Committee
determines otherwise.
The LTIP rules include discretion, in
exceptional circumstances, for acceleration
of the realisation date and upwards
adjustment to the number of shares to be
realised for ‘good leavers’ in such a situation.
In all other leaver circumstances, the
Committee would decide the approach taken,
which would ordinarily mean that leavers
would not be entitled to consideration for a
bonus and LTIP awards would lapse. Any
vested LTIP award that is subject to a holding
period at the time of the executive’s cessation
of employment will not lapse except in the
case of the executive’s gross misconduct.
The Committee reserves the right to make
any other payments in connection with a
Director’s cessation of office or employment
where the payments are made in good faith
in discharge of an existing legal obligation (or
by way of damages for breach of such an
obligation) or by way of settlement of any
claim arising in connection with the cessation
of a Director’s office or employment.
In addition, the Committee reserves the
right, acting in good faith, to pay fees for
outplacement assistance and/or the
Director’s legal and/or professional advice
fees in connection with his or her cessation
of office or employment.
The appointment of each of the Non-
Executive Directors is for an initial period of
three years, or for the period between the
date of appointment and the Annual General
Meeting in 2024, whichever is the shorter.
The appointment of each Non-Executive
Director is renewable for further terms, and
is terminable by the Non-Executive Director
(as applicable) or the Company on three
months’ notice. No contractual payments
would be due on termination. There are no
specific provisions for compensation on
early termination for the Non-Executive
Directors, with the exception of entitlement
to compensation equivalent to three months’
fees (as applicable) or, if less, the balance of
appointment, in the event of removal at an
Annual General Meeting.
Reward packages for new Executive
Directors will be consistent with the above
Remuneration Policy. Fixed remuneration
elements would be paid only from the date of
employment and any bonus will be pro-rated
to reflect the proportion of the year
employed to the maximum stated in the
Policy table.
The Committee retains discretion to make
appropriate remuneration decisions outside
the standard Remuneration Policy to meet
the individual circumstances when an interim
appointment is made to a fill an Executive
Director role on a short-term basis. For
Non-Executive Directors, the Board would
consider the appropriate fees for a new
appointment taking into account the existing
level of fees paid to the Non-Executive
Directors, the experience and ability of the
new Non-Executive Director and the time
commitment and responsibility of the role.
This Report will be submitted alongside the
accompanying 2025-2027 Remuneration
Policy for an advisory vote of shareholders
at the Annual General Meeting taking place
in 2025.
We believe that the Remuneration Policy
works to ensure that the Company is able
to attract, retain and correctly incentivise
management. Its framework ensures the
long-term success of the Company, and
encourages actions which align with the
purpose, values and culture of the Company.
Feedback on remuneration from
shareholders is a prime concern for the
Remuneration Committee. Considerations
relevant in 2025 are likely to be:
(1) the stabilisation of the newly opened
hotels in the portfolio;
(2) macroeconomic conditions including
inflation and energy costs; and
(3) year-on-year ESG data reporting
allowing KPIs.
The remuneration in 2024 was awarded in
accordance with the Remuneration Policy
approved at the 2022 AGM (see above).
The Committee is satisfied that the
implementation of the Policy indicates the
correct operation of the decision-making
processes of the Committee.
Single total figure of remuneration (audited)
The following table sets out the details of all
Directors’ remuneration for the financial
year ending 31 December 2024. Figures for
2023 are included for comparison.
Total remuneration for PPHE Hotel Group Board in 20241
Base salary and fees2
Bonus3
Pension
contributions
LTIP4
Other benefits
Total
Name
Position
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
Boris Ivesha
President & Co-CEO
573,100
550,000
160,538
157,500
28,655
27,500
–
–
17,116
15,135
779,409
750,135
Greg Hegarty
Co-CEO
511,009
496,125
308,082
157,500
25,550
23,625 270,497
–
4,521
3,860 1,119,659 681,110
Daniel Kos
CFO
485,889
479,736
308,082 157,500
19,283
16,076 270,497
–
–
– 1,083,751 653,312
Eli Papouchado
Non-Executive Chairman
250,000
200,000
N/A
–
N/A
–
N/A
N/A
N/A
N/A
250,000
200,000
Ken Bradley
Non-Executive Deputy Chair
87,000
62,158
N/A
–
N/A
–
N/A
N/A
N/A
N/A
87,000
62,158
Nigel Keen
Senior Independent Director
72,000
61,300
N/A
–
N/A
–
N/A
N/A
N/A
N/A
72,000
61,300
Stephanie Coxon
Non-Executive Director
65,000
59,900
N/A
–
N/A
–
N/A
N/A
N/A
N/A
65,000
59,900
Marcia Bakker
Non-Executive Director
65,000
59,900
N/A
–
N/A
–
N/A
N/A
N/A
N/A
65,000
59,900
Kevin McAuliffe
Former Non-Executive
Deputy Chairman
–
39,656
–
–
–
–
–
–
–
–
–
39,656
Total
2,108,998 2,008,775
776,702
472,500
73,488
67,201 540,994
–
21,637
18,995 3,521,819 2,567,471
Notes
1. All fees are shown in GBP. Daniel Kos’s salary is paid in EUR, and converted for comparison purposes at a rate of €1.18:£1.
2. Base salary / fees represent all amounts received by the Director from the Company for the financial year.
3. Figure includes the share element of the annual bonus which was calculated using the 3 months average price to 31 Dec 2024
4. Figure includes the full LTIP for performance in 2022-2024 which was as calculated using the 3 months average price to 31 Dec 2024.
2024 Remuneration Report
2022-2024 Remuneration Policy – continued
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
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143
Strategic Report
Corporate Governance
Financial Statements
Appendices
2024 Remuneration Report – continued
2024 Bonus outcomes
Annual bonus performance measures
The annual bonus for 2024 included a cash
element and a share element, using the
performance metrics outlined below.
The cash bonus had a maximum entitlement
of six monthly salaries.
Cash bonus
Financial metrics were revenue and gross
operating profit, with the executive Directors
achieving 94.5% on the revenue target and
95.9% on the GOP target. As a result, with the
maximum potential of the financial criteria
being 70% of the cash bonus, and based on
the outcome, the executives had been
awarded 35% of the maximum cash
bonus entitlement.
Non-financial metrics were the annual
improvement of guest rating score and
employee engagement KPIs. Further details
of these, including the methodology and
outcome for 2024 and previous years,
are included on page 39. The executives
achieved 100% on both targets, entitling
the executives to 15% of the maximum
cash bonus entitlement.
The non-financial targets further comprised
individual targets per executive as follows:
Personal targets of Boris Ivesha
• Progress on ESG strategic target setting
• Successful Co-CEO transition
• Substantial progress on pending planning
approvals
• Substantial progress on art’otel brand
development and roll out
Personal targets of Greg Hegarty
• Implementation of new Food & Beverage
model to improve performance of
restaurants
• Reduction of gas consumption
in the hotels
• Creating further alignment and efficiency
between commercial functions in the
hospitality management platform
• Successful openings of 2024 pipeline
Personal targets of Daniel Kos
• Implementation of reporting tools
for constant carbon reporting
• Enhancement of efficiency by implementing
robotics and AI throughout centralised
finance function
• Improvement of housekeeping
efficiencies to reduce cost per
occupied room
• Successful refinancing of the
Dutch facility
Overall, in terms of non-financial metrics, the
Executive Directors achieved 100%, which
has awarded them 30% of the maximum
bonus entitlement.
Share bonus
The 2024 annual bonus included a share
element. This award will be granted following
publication of the Report.
In total, the 2024 annual bonus for
executives, including the cash and share
elements, was within a range of 28% to 60%
of base salary and well within the cap
permitted under the Remuneration Policy.
The Group’s annual bonus programme was
well under the maximum amount permitted
under the Remuneration Policy. Outcomes
for each Director for 2024 were as follows:
Boris
Ivesha
Greg
Hegarty
Daniel
Kos
Cash award
160,538
160,538
160,538
Share
award*
–
147,544
147,544
Total award
160,538
308,082
308,082
* Calculation is based on a three months average
share price to on 31 December 2024 (£12.3
per share).
2024 LTIP outcomes
No LTIP awards were made in 2024.
The Committee granted an LTIP award
in June 2022, subject to the rules of the
Long-Term Incentive Plan, and within the
framework set by the Policy. The award was
subject to performance metrics based on
Total Shareholder Return (TSR) and adjusted
EPRA earnings per share*. The award
carried a three-year vesting period, which
matured in December 2024, and two-year
holding requirement. As a significant
shareholder in the Company, Boris Ivesha
waived his entitlement to participate in the
2022 LTIP. Daniel Kos, the CFO and Greg
Hegarty, Co-CEO, were each awarded a
conditional LTIP award of 22,000 NIL
Price Options.
The Committee recognises that the LTIP
performance targets, particularly TSR, were
not met in full during the performance period.
However, after thorough consideration of the
broader context, including macroeconomic
challenges such as rising interest rates,
inflationary pressures, and a volatile real
estate environment, the Committee believes
it is appropriate to exercise discretion and
grant the full LTIP allocation.
Despite these external headwinds, the
Company has delivered a strong operational
performance, achieving EPRA EPS of 1.18
compared with the target of 1.25 and
demonstrating resilience in its strategic
execution. Furthermore, the Company’s
re-entry into the FTSE 250 and the EPRA Index,
alongside its top quartile performance within
the REITs peer group, highlights its significant
progress in enhancing shareholder value and
market positioning. The Committee is
confident that this decision reflects the
exceptional efforts of the management team
and appropriately rewards their leadership
during an extraordinarily challenging period,
ensuring alignment with long-term
stakeholder interests.
TSR benchmark group
Our unique business model in owning
and operating our hotels makes us both a real
estate and a hospitality business. For this
reason, the Committee developed a specific
benchmark for remuneration purposes. The
Committee uses a blend of listed companies in
the hospitality management and hotel real
estate sectors and as peer comparators as
well as hotel businesses in order to ensure
that our asset-holding real estate business
model and our hotel operations business
model are properly reflected in our
comparator group.
Comparator Group
Name
Ticker
Market
Sector
PPHE Hotel Group
PPH-GB
UK
Leisure & Hospitality
Dalata
DAL-GB
UK
Leisure & Hospitality
InterContinental Hotels Group
IHG-GB
UK
Leisure & Hospitality
Whitbread
WTB-GB
UK
Leisure & Hospitality
Accor
AC-FR
France
Leisure & Hospitality
NH Hotel Group
NHH-ES
Spain
Leisure & Hospitality
Melia Hotels International
MEL-ES
Spain
Leisure & Hospitality
Pandox
PNDX.B-SE
Sweden
Leisure & Hospitality
Scandic Hotels Group
SHOT-SE
Sweden
Leisure & Hospitality
Aroundtown
AT1-DE
Germany
Leisure & Hospitality
Marriot
MAR-US
USA
Leisure & Hospitality
Hilton
HLT-US
USA
Leisure & Hospitality
Wyndham Hotels
WH-US
USA
Leisure & Hospitality
Choice Hotels International
CHH-US
USA
Leisure & Hospitality
Hyatt Hotels
H-US
USA
Leisure & Hospitality
Ashford Hospitality Trust
AHT-US
USA
REIT
Host Hotels & Resorts
HST-US
USA
REIT
Park Hotels & Resorts
PK-US
USA
REIT
Apple Hospitality
APLE-US
USA
REIT
Pebblebrook Hotel Trust
PEB-US
USA
REIT
RLJ Lodging Trust
RLJ-US
USA
REIT
Sunstone Hotel Investors
SHO-US
USA
REIT
Diamondrock Hospitality
DRH-US
USA
REIT
Summit Hotel Properties
INN-US
USA
REIT
Chatham Lodging Trust
CLDT-US
USA
REIT
Braemar Hotels & resorts
BHR-US
USA
REIT
Hersha Hospitality Trust
HT-US
USA
REIT
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
144
145
Strategic Report
Corporate Governance
Financial Statements
Appendices
Stakeholder engagement
The Committee is obliged to consider shareholder interest in making the awards set out above. Further, workforce engagement in
remuneration practices is a requirement of strong corporate governance. The ratio of total Co-CEO Remuneration to those of average
employees is set out using quartile comparators:
Salary of the Co-CEOs compared with average UK workforce remuneration
Calculated as the ratio between the average of both Co-CEO’s
remuneration to the 50th percentile.
Total
remuneration
of President &
Co-CEO Boris
Ivesha
Total
remuneration
of Co-CEO Greg
Hegarty
Average UK
employee (25th
percentile)
Average UK
employee (50th
percentile)
Average UK
employee (75th
percentile)
Total
779,409
1,119,659
26,077
31,467
40,470
Ratio of mean of Co-CEOs’ total remuneration to average
UK employee
–
–
36.4:1
30.2:1
23.5:1
Additional disclosures
Directors and Company Secretary share interests
Name
Shares beneficially owned as at
31 December
Options fully
vested to
acquire shares
as at 31
December
2024
Conditional LTIP
share awards
subject to
performance
conditions
2024
2023
Boris Ivesha
4,636,974
4,636,974
–
–
Greg Hegarty
–
–
27,308
22,000
Daniel Kos
30,000
30,000
–
22,000
Eli Papouchado
13,760,260
13,760,260
–
–
Ken Bradley
–
–
–
–
Nigel Keen
–
–
–
–
Stephanie Coxon
–
–
–
–
Marcia Bakker
–
–
–
–
Shares beneficially owned include those of connected persons and include shares held in trust, which are subject to deferral or holding periods.
Relative spend on pay
The following table shows the Group’s aggregate actual spend on pay (for all employees) and dividends in respect of the current and previous
financial year.
2024
2023
Change
Dividend
15,544,953
11,896,668
30.7%
Aggregate employee remuneration
150,147,075
136,547,587
10.0%
Percentage change in remuneration
The following analysis summarises the annual change in remuneration for each individual Director over five years in comparison to the
annual change in average employee remuneration.
Directors’ remuneration
2021v20203
2022v2021
2023v2022
2024v2023
2024 total
Executive Directors
Boris Ivesha1
29%
2%
33%
3.9%
779,409
Daniel Kos2
3%
164%
34%
65.9%
1,083,751
Greg Hegarty
N/A
N/A
N/A
64.4%
1,119,659
Non-Executive Directors
Eli Papouchado
33%
0%
0%
25.0%
250,000
Ken Bradley
32%
8%
4%
40.0%
87,000
Nigel Keen
54%
5%
0%
17.5%
72,000
Stephanie Coxon
218%
8%
0%
8.5%
65,000
Marcia Bakker
N/A
N/A
N/A
8.5%
65,000
Kevin McAuliffe
29%
0%
60%
N/A
N/A
Nigel Jones
100%
N/A
N/A
N/A
N/A
Dawn Morgan
100%
N/A
N/A
N/A
N/A
Notes to the table:
1: Boris Ivesha waived his rights for annual bonus in years 2019-2022.
2: In 2022, the annual bonus of the CFO included a 23,000 share award. 2024 figure includes the LTIP for 2022-2024 and the share bonus.
3: In 2020, under pandemic conditions, the Directors sacrificed a portion of their salary and were not entitled to variable benefits.
Additional payments to Directors and past Directors
No payments to past Directors were made in 2024. There were no payments for loss of office in 2024.
The Committee is grateful to shareholders for their confidence in our work and decision-making. We are, as always, committed to full
shareholder engagement and transparency in our approach to our work.
Remuneration Committee and advisers
The Co-CEOs and the Company Secretary attended Committee meetings at the invitation of the Committee Chair (but were not present for
discussions on their own remuneration).
The members of the Committee have no financial interest and no potential conflicts of interest, other than as shareholders, in the matters to
be decided and no day-to-day involvement in the running of the business.
In carrying out its duties, the Committee considers any relevant legal requirements, the recommendations in the UK Corporate Governance
Code and the Listing Rules of the London Stock Exchange and associated guidance and investor guidelines on executive remuneration. In
2024, the Committee did not seek external support from remuneration consultants or advisers.
The Board approves the remuneration of the Non-Executive Directors.
2024 Remuneration Report – continued
PPHE Hotel Group
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Annual Report and Accounts 2024
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Strategic Report
Corporate Governance
Financial Statements
Appendices
Remuneration Policy 2025-2027
Introduction
This Policy has been prepared by the
Committee in 2024, and is proposed to apply
for three years commencing on 1 January
2025. As a Guernsey-registered company,
PPHE Hotel Group is not subject to the
Companies Act 2006 in the UK. It is our
intention to seek advisory shareholder
approval for the Policy at the 2025 Annual
General Meeting.
This Policy is designed to maximise
openness and transparency with regard
to remuneration. It is the Committee’s
responsibility to ensure that implementation
of the Policy is not simply formulaic.
Committee members individually and
collectively exercise their independent
judgment and discretion to ensuring that,
in any given year, appropriate consideration
is given to the performance of the business
and other relevant circumstances in
determining remuneration. Other relevant
considerations for the Remuneration
Committee include:
• the impact of the Company’s strategy and
operations on the community and the
environment;
• the Company’s reputation and
relationships in its locations of operation;
• shareholder and investor feedback on
previous Remuneration Reports;
• The remuneration of the business’s
workforce as a whole;
• ensuring that management incentives
support the long-term, sustainable
success of the business;
• alignment to Company purpose
and values;
• the business’s need to recruit and retain
talent; and
• ensuring that remuneration is in line
with shareholder expectation and
market practice.
Creating the new Policy
The Remuneration Committee has
dedicated time in its meetings throughout
2024 to designing a Policy that promotes the
interests of employees, shareholders and
other stakeholders.
In designing the Remuneration Policy, no
external third parties were required.
Conflict of interest management
In line with the requirements of the UK
Corporate Governance (the ‘Code’)
published in 2024 no individual is permitted
to participate in decision-making regarding
their own remuneration outcome.
Executive Director remuneration
The elements of the remuneration package
which may apply to Executive Directors are:
(1) base salary;
(2) benefits;
(3) pension;
(4) annual bonus; and
(5) Long-Term Incentive Plan (‘LTIP’).
Policy table
Purpose, link to strategy and operation
Maximum opportunity
Performance metrics
(1) Base salary
Salary shall be market competitive, and shall
serve the purpose of retaining talent, and, where
necessary, attracting new talent to roles. Skills,
length of service, experience and wider
workforce alignment shall be relevant
considerations when determining the fixed
portion of executives’ remuneration.
A cap shall be applied in line with the upper quartile
of the relevant market benchmark for the role.
This cap shall be a maximum figure, and not reflect
the actual amount to be paid.
The level of increase applied annually to base
salary shall be determined by the Committee at
its discretion; however, annual increases for
executives ought to be transparently in line with
increases applicable to the wider workforce,
with any deviation from this explained in the
appropriate report of the Remuneration
Committee. Circumstances that might require
the Committee to apply an increased base salary
greater than that applied to the workforce as a
whole include an increase in the scale or scope
of a role.
There shall be no performance metrics applied
to base salary.
Policy table – continued
Purpose, link to strategy and operation
Maximum opportunity
Performance metrics
(2) Benefits
Benefits shall be consistent with market practice,
and competitive for the purpose of attracting
and retaining talent.
Benefits typically include annual leave above
statutory requirements, wellbeing days, sick
pay and other health benefits, car allowance and
insurance. Benefits may be an annual component
of executive remuneration, such as employee
share schemes, or ad-hoc payments related
to business strategy, for example relocation
expenses.
In order to ensure alignment with the workforce,
benefits may vary from region to region.
We do not consider it appropriate to set a
maximum benefits value as this may change
periodically and by region.
Access to employee share schemes is on the
same basis as for the leadership team.
There shall be no performance metrics applied
to benefits.
(3) Pension
Accrual of pension savings is in line with
attraction and retention of talent.
Executives can choose to participate in a defined
contribution arrangement, or may receive a cash
equivalent. A salary supplement may also be paid
as part of a pension allowance arrangement.
Pension contributions might vary by region.
Pension allowances shall align to workforce
contributions based on place of employment.
Only basic salary shall be pensionable.
There shall be no performance metrics applied
to pensions.
(4) Annual bonus plan
Annual bonuses shall incentivise and reward
performance on near-term strategic targets and
business performance overall.
Bonuses shall be discretionary, and based on
performance against agreed targets set at the
beginning of the financial year. The Committee
shall determine if any bonus shall be payable
by reviewing performance against targets
after year end. The Committee shall exercise
discretion in making payments based on the
overall performance of the business.
Where share awards are granted as part of the
annual bonus plan, they normally vest on the first
anniversary of grant and are subject to clawback
provisions within three years of the individual
becoming entitled to the shares. Circumstances
include: a misstatement of financial results,
miscalculation of the number of shares awarded,
corporate failure, gross misconduct or serious
reputational damage to any Group company.
These provisions also applied in the previous
reporting period.
150% of base salary.
Performance measures are selected to focus
executives on strategic priorities, providing
alignment with shareholder interests, and are
reviewed annually. Weightings and targets
are reviewed and set at the start of each
financial year.
The Committee may at its discretion adjust the
outcome under the formulaic measures where
it considers it is appropriate to do so to better
reflect overall Company performance.
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Financial Statements
Appendices
Policy table – continued
Purpose, link to strategy and operation
Maximum opportunity
Performance metrics
(5) Long-term share incentive plan
The LTIP scheme is designed to provide a
framework for the award of the following to all
employees, including executives:
• Performance share awards (granted subject
to specified performance targets);
• Restricted share awards;
• Deferred bonus awards; and
• Market value share options (share options
linked to the market value of the Company
shares).
The Committee imposes long-term holding
and phased vesting conditions to awards. The
LTIP contains malus and clawback provisions.
Incentive awards awarded under the LTIP
scheme may be cancelled (prior to vesting),
reduced, or clawed back for three years post
vesting in the event of a misstatement of financial
results, miscalculation of the number of shares
awarded, corporate failure, gross misconduct or
serious reputational damage to any Group
company. These provisions also applied in the
previous reporting period.
The Committee may adjust the number of shares
realised if it considers in its discretion that such
adjustment is justified, based on factors such as:
(a) ensuring that the number of shares is reflective
of the underlying business performance of the
Company, any business area or team;
(b) the conduct, capability or performance of the
participant; or
(c) wider circumstances.
The rules of the award scheme provide for:
• long-term vesting periods;
• post vesting holding periods (determined by
the Committee at the time of the award);
• good leaver and bad leaver provisions allowing
the Committee to ensure that the vesting of
awards suitably reflects the purpose of
long-term talent retention; and
• share-capital dilution limits.
Dividend equivalents may accrue subject to the
discretion of the Remuneration Committee.
Performance related awards and/or restricted
stock awards are capped at 200% of base
salary as calculated by assessment of the
aggregate market value of the shares calculated
by the Committee at the time of or prior to the
award date.
Performance targets are measured annually
to ensure that they correctly incentivise
behaviours in line with the strategy, and
are appropriate, with due regard to
shareholder interest.
Weightings and targets are set at the beginning
of the financial year, and performance is
assessed against them prior to any award being
made. A minimum of two-thirds of performance
metrics refer to share price and/or financial
targets (for example, Total Shareholder Return
(TSR)). Quantifiable non-financial targets
(such as those related to ESG performance)
shall form part of the metrics of performance.
The Company’s controlling shareholders retain
a right of consultation on any year-on-year
material changes to performance metrics.
The Committee will consider the Group’s overall
performance before determining the final
vesting level. The Committee retains discretion
to adjust the vesting level to ensure that it is
appropriately aligned to the underlying financial
or non-financial performance of the participant
or the Group over the relevant period.
Committee discretion also exists to ensure that
total remuneration is appropriate in the event of
unexpected or unforeseen circumstances
unknown when the targets were set.
Notes to the Policy table
•
The Committee may make minor amendments to the Policy set out above (for regulatory, exchange control, tax or administrative purposes, or to take account of a change in
legislation). As the Company is registered in Guernsey, shareholders’ approval is not required in connection with the Policy.
•
The LTIP rules permit the substitution or variance of performance conditions to produce a fairer measure of performance as a result of an unforeseen event or
transaction. They include discretions for upwards adjustment to the number of shares to be realised in the event of a takeover, and scheme of arrangement or voluntary
winding up.
•
Non-significant changes to the performance metrics may be made by use of discretion under the performance conditions. Awards are normally satisfied in shares,
although there is flexibility to settle in cash.
•
The Committee reserves the right to make remuneration payments and payments for loss of office (including exercising any discretions available to it in connection with
such payments) that are not in line with the Policy table set out above where the terms of the payment were set out and approved prior to the date the Policy came into
effect. For these purposes, ‘payments’ include the Committee determining and paying short-term and long-term incentive awards of variable remuneration.
Non-Executive Directors’ fee
Base fee
The Non-Executive Director fees are decided
by the Board in accordance with the
Company’s articles of incorporation. This fee
is the same for each Non-Executive Director.
Chairman fee
The Chairman receives a set fee which is set
by the Remuneration Committee and agreed
by the Board. The fees for the Chairman and
are reflective of his experience and skills,
as well as the time commitment and
responsibilities of these roles. No Director
may participate in the decision-making
relating to their own remuneration.
Additional fees
Non-Executive Directors are paid a set
additional fee for being Senior Independent
Director, a member of a Board Committee
and for chairing a Board Committee.
This fee is the same for each Non-Executive
Director, with exception of the Chairman (see
above) and the Senior Independent Director,
who attracts an additional fee for the role.
Appointment term and other matters
• The Non-Executive Chairman and all other
Non-Executive Directors are appointed to
terms ending at the Annual General
Meeting in 2028 (all are subject to annual
re-election), unless terminated sooner.
• All Directors retire and are offered
re-election each year at the Annual
General Meeting.
• Non-Executive Directors are not entitled
to bonuses, benefits or pension scheme
contributions or to participate in any
share scheme operated by the Company.
• In addition to any remuneration payable,
a Non-Executive Director may be paid
reasonable travel, hotel and other
expenses properly incurred in
discharging the Director’s duties.
• Fees cease immediately in the event the
Non-Executive Director ceases to be
a Director.
• Directors are entitled to the benefits
afforded by the Group’s Directors and
Officers Insurance.
Maximum potential value
Prescribed by the Articles of Association of
the Company.
Term and termination
The Executive Directors’ service contracts
do not contain specific provision for
compensation in the event of removal at an
Annual General Meeting.
In the event of early termination, some
Directors may be eligible for payments in lieu
of notice. When determining exit payments,
the Committee would take account of a
variety of factors, including individual and
business performance, the obligation for
the Director to mitigate loss (for example,
by gaining new employment), the Director’s
length of service and any other relevant
circumstances, such as ill health. A
departing Director may also be entitled to a
payment in respect of statutory rights. The
Committee would distinguish between types
of leaver in respect of incentive plans. ‘Good
leavers’ (death, ill health, injury or disability,
redundancy, the employing company leaving
the Group, agreed retirement, termination
by the employer other than due to poor
performance or misconduct or any other
reason at the discretion of the Committee)
may be considered for a bonus payment
having completed the full year, and
part-year bonus payments may be paid and
LTIP awards may vest at the usual time
taking into account performance conditions
and pro-rating for time in employment
during the performance period, unless the
Committee determines otherwise.
The LTIP rules include discretion, in
exceptional circumstances, for acceleration
of the realisation date and upwards
adjustment to the number of shares to be
realised for ‘good leavers’ in such a situation.
In all other leaver circumstances, the
Committee would decide the approach taken,
which would ordinarily mean that leavers
would not be entitled to consideration for
a bonus and LTIP awards would lapse. Any
vested LTIP award that is subject to a holding
period at the time of the executive’s cessation
of employment will not lapse except in the
case of the executive’s gross misconduct.
The Committee reserves the right to make
any other payments in connection with a
Director’s cessation of office or employment
where the payments are made in good faith
in discharge of an existing legal obligation (or
by way of damages for breach of such an
obligation) or by way of settlement of any
claim arising in connection with the cessation
of a Director’s office or employment. In
addition, the Committee reserves the
right, acting in good faith, to pay fees for
outplacement assistance and/or the
Director’s legal and/or professional advice
fees in connection with his or her cessation
of office or employment.
The appointment of each of the Non-
Executive Directors is for the period
between the date of appointment and the
Annual General Meeting in 2028 (subject to
annual re-election at each Annual General
Meeting). The appointment of each Non-
Executive Director is renewable for further
terms, and is terminable by the Non-
Executive Director (as applicable) or the
Company on three months’ notice. No
contractual payments would be due on
termination. There are no specific
provisions for compensation on early
termination for the Non-Executive
Directors, with the exception of entitlement
to compensation equivalent to three
months’ fees (as applicable) or, if less, the
balance of appointment, in the event of
removal at an Annual General Meeting.
Reward packages for new Executive
Directors will be consistent with the above
Remuneration Policy. Fixed remuneration
elements would be paid only from the date of
employment and any bonus will be pro-rated
to reflect the proportion of the year
employed. The maximum level of variable
remuneration is as stated in the Policy table.
The Committee retains discretion to make
appropriate remuneration decisions
outside the standard Remuneration Policy
to meet the individual circumstances when
an interim appointment is made to a fill an
Executive Director role on a short-term
basis. For Non-Executive Directors, the
Board would consider the appropriate fees
for a new appointment taking into account
the existing level of fees paid to the Non-
Executive Directors, the experience and
ability of the new Non-Executive Director
and the time commitment and responsibility
of the role.
Remuneration Policy 2025-2027 – continued
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Corporate Governance
Financial Statements
Appendices
Directors’ report
The Directors present their report and the
audited financial statements of the Company
for the year ended 31 December 2024.
The Strategic Report and Directors’ report
together are the Management Report for
the purposes of Rule 4.1.8R of the DTR.
Section 248(2) of The Companies (Guernsey)
Law, 2008 (the ‘Guernsey Law’) requires the
principal activities to be stated in the
Directors’ report. The following matters
have been included in the Strategic Report
but are incorporated by reference into this
Directors’ report.
Appointment and replacement of Directors
Pursuant to the Articles, the Board has the
power to appoint any person to be a
Director. All Directors are required to
submit to annual election by shareholders
at the Annual General Meeting. At every
Annual General Meeting, a minimum of
one-third of the Directors (or the number
nearest to and less than one-third in the
event that the number of Directors is not
three or any multiple of three) shall retire
from office. If there are fewer than three
Directors on the board, they shall all retire.
No person, other than a Director retiring
at a general meeting, shall, unless
recommended by the Directors, be eligible
for election at a general meeting as a
Director unless notice has been received
from such person. In accordance with the
Code and good Corporate Governance
practice, the entire Board will stand for
re-election at the forthcoming Annual
General Meeting.
Topic
Section of the report
Page
Fair view of the Company’s
business
Strategic Report
28
Principal risks and
uncertainties
Risk management
90
Strategy
Strategic Report
28
Business model
Strategic Report
36
Important events impacting
the business
Strategic Report, Chairman’s statement,
Co-CEOs Review
14,18,50
Likely future developments
Strategic Report
28
Financial key performance
indicators
Key performance indicators
38
Non-financial key
performance indicators
Environmental, Social and Governance
68
Environmental matters
Environmental, Social and Governance
68
Company’s employees
Stakeholder engagement, Environmental, Social
and Governance
65
Social, community and
human rights issues
Stakeholder engagement, Environmental, Social
and Governance
76
s.172 and relationship with
suppliers, customers
and others
Stakeholder engagement, Introduction to
governance
66, 103
Greenhouse gas emissions
Environmental, Social and Governance
87
The following matters have been included in the corporate governance report but are
incorporated by reference into this Directors’ report.
Directors’ induction and
training
Nomination Committee report
121
Diversity report of Board
membership (ethnicity and
gender)
Nomination Committee report
123
Pursuant to the Articles, Euro Plaza Holdings
B.V. (‘Euro Plaza’) may:
• nominate two Non-Executive Directors to
the Board for so long as Euro Plaza and its
associates directly or indirectly control at
least 30% of the issued shares in the
Company; and
• nominate one Non-Executive Director to
the Board for so long as Euro Plaza and
its associates control at least 10% but
less than 30% of the issued shares of
the Company.
This power was exercised on 9 January
2025 to appoint Roni Hirsch as Non-
Executive Director.
Pursuant to the Articles, Boris Ivesha may
nominate one Non-Executive Director to the
Board for so long as he and his associates
directly or indirectly control at least 10% of
the issued shares in the Company. The
shareholders may, by ordinary resolution,
resolve to remove any Director before the
expiration of his or her period of office and
appoint a replacement Director.
Share capital
The issued share capital of the Company
together with the details of the movements
in the Company’s share capital during the
year are shown in Note 10 to the
consolidated financial statements.
Shares
There is currently only one class of share in
issue (being ordinary shares) which all carry
the same rights as one another. There are
no shares in the Company which carry
special rights with regard to control of
the Company.
The following limitations on voting rights
of shareholders apply:
• The Board may suspend the voting rights
attached to any shares owned directly,
indirectly or beneficially by a Non-
Qualified Holder (as defined in the
Articles); and
• The Directors may at any time make calls
upon the shareholders in respect of any
unpaid shares. No shareholder is entitled
to vote unless all calls due from him or her
have been paid.
The following deadlines for exercising voting
rights apply:
• A written resolution will state a date by
which the resolution must be passed.
Guernsey Law imposes a default lapse
date of 28 days from circulation of the
written resolution if no lapse date is
specified; and
• In the case of resolutions passed at
general meetings of shareholders, voting
rights may only be exercised at the time
the resolution is proposed at the meeting.
Any arrangements by which the financial
rights to shares are held by a person other
than the registered shareholder would be by
agreement between the shareholder and the
beneficiary. The Company is not obliged to
recognise any such trust arrangements and
shall pay any dividends to the registered
shareholder.
With the prior approval of the shareholders
by ordinary resolution, the Board may
exercise all powers of the Company to allot
and issue, grant rights to subscribe for, or
to convert any securities into, an unlimited
number of shares of each class in the
Company. Unless such shares are to be
wholly or partly paid otherwise than in cash
or are allotted or issued pursuant to an
employee share scheme, any shares to be
allotted and issued must first be offered to
the existing shareholders on the same or
more favourable terms.
The Company may from time to time acquire
its own shares subject to the requirements
of UK and Guernsey legislation (for example,
the Guernsey Law), the UK Listing Rules the
UK Market Abuse Regulation and the
Takeover Code (the ‘UK Law’). Prior approval
of any share buy-back by way of ordinary
resolution of the shareholders is required by
UK Law and a certification by the Board that
the Company satisfies the solvency test set
out in UK Law.
Articles
The Articles may be amended at any time
by passing a special resolution of the
shareholders pursuant to the Guernsey
Law. A special resolution is passed by a
majority of not less than 75% of the votes of
the shareholders entitled to vote and voting
in person or by attorney or by proxy at a
meeting or by 75% of the total voting rights
of eligible members by written resolution.
Substantial share interest
This table shows shareholders holding 5% or
more of the issued share capital (excluding
treasury shares) as at 31 December 2024.
No further interests have been disclosed to
the Company in accordance with DTR 5 in
the period between the end of the financial
year and 31 January 2025.
Number of issued shares
44,347,410
Shares held in treasury
by the Group
2,558,086
Number of issued shares
(excluding treasury)
41,789,324
Concert
Party member
Number of
Ordinary
Shares
Percentage
of the issued
Ordinary
share capital
(excluding
treasury
shares)
Boris Ivesha
4,636,974
11.10%
Red Sea Parties
13,760,260
32.93%
Euro Plaza
12,207,843
29.21%
Red Sea Club
Limited
22,417
0.05%
AA Papo Trust
Company
Limited1
1,530,000
3.66%
Total
18,397,234
44.02%
1 A.A. Papo Trust Company Limited is the trustee of
a second endowment created by Eli Papouchado
under Israeli law in 2008. Eli Papouchado was the
owner of these Ordinary Shares and granted those
shares to the second endowment in 2015.
The primary beneficiary of the second endowment is
Eli’s daughter, Eliana, and the secondary beneficiaries
are Eli Papouchado and his divorcee, Sigal Gross.
Shareholder
Number of
Ordinary
Shares
Percentage
of the issued
Ordinary
share capital
(excluding
treasury
shares)
Aroundtown
Property
Holdings
3,270,345
7.83%
Clal Insurance
Enterprises
Holdings
3,493,945
8.36%
Harel Insurance
Investments
and Financial
Services
3,811,757
9.12%
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Financial Statements
Appendices
Directors’ report – continued
Controlling shareholders
The Company’s immediate controlling
shareholders are Euro Plaza Holdings B.V.
and Boris Ivesha. Euro Plaza is ultimately
controlled by Eli Papouchado, acting in his
capacity as trustee of an endowment
created under Israeli law (the ‘Endowment’).
The Company has entered into separate
relationship agreements with:
(i)
Euro Plaza and Eli Papouchado
(acting in his capacity as trustee of
the Endowment); and
(ii) Boris Ivesha, which as a concert party
hold 43.25% of the issued share capital
of the Company.
The Company has complied with (i) the
undertakings in UK Listing Rule 6.2.5R; and
(ii) UKLR6.6.1R(13) whereby the Company
continues to comply with the requirement in
UKLR6.2.3R (carrying on its main business
activity independently from the controlling
shareholders).
In accordance with the relationship
agreements entered into the Company’s
controlling shareholders, each of Euro
Plaza and Boris Ivesha is entitled to
appoint representatives to the Board
of the Company.
DTR disclosures
The Articles may be amended at any time
by passing a special resolution of the
shareholders pursuant to the Guernsey
Law. A special resolution is passed by a
majority of not less than 75% of the votes of
the shareholders entitled to vote and voting
in person or by attorney or by proxy at a
meeting or by 75% of the total voting rights
of eligible members by written resolution.
Eli Papouchado is deemed to be interested
in 13,760,260 ordinary shares, which
constitutes 32.93% of the issued share
capital (excluding treasury shares) of
the Company:
• 12,207,843 ordinary shares held by Euro
Plaza;
• Euro Plaza is an indirect wholly owned
subsidiary of A.P.Y. Investments & Real Estate
Ltd (‘APY’). 98% of the shares in APY are held
by Eli Papouchado;
• 22,417 ordinary shares held by Red Sea Club
Limited, a subsidiary of APY; and
• 1,530,000 ordinary shares held by A.A. Papo
Trust Company Limited, which is wholly
owned by Eli Papouchado.
Boris Ivesha holds 4,636,974 ordinary
shares, which constitutes 11.10% of the
issued share capital (excluding treasury
shares) of the Company.
Eli Papouchado, Euro Plaza, APY and A.A.
Papo Trust Company Limited and other
parties related to him (together, the ‘Red Sea
Parties’) and Boris Ivesha and other parties
related to him (together, the ‘Ivesha Parties’)
are a party to a shareholders agreement
dated 14 March 2013 (as amended from time
to time) (the ‘Shareholders Agreement’).
Pursuant to the Shareholders Agreement, it
has been agreed that for so long as, inter
alia, the combined interests of the Ivesha
Parties and the Red Sea Parties in the
Company are not less than 30% and the Red
Sea Parties’ interest in the Company is at
least 20% of the share capital then in issue
(excluding, in both cases, shares held in
treasury), on any shareholder resolution
all shares held by the Ivesha Parties shall be
voted in a manner which is consistent with
the votes cast by, or on behalf of, the Red
Sea Parties in respect of that resolution.
As a result, the Red Sea Parties are all
considered to be interested in the shares
in which the Ivesha Parties are interested.
Rule
Disclosure
DTR 4.1.11R(6)
As announced to the
market on 9January 2025,
Eli Papouchado stepped
down from the Board, and
Roni Hirsch was appointed
to the Board as Non-
Executive Director as a
representative of Euro
Plaza, with Ken Bradley
succeeding Eli Papouchado
as Chairman of the Board.
DTR 4.1.11R(1)
Likely future developments
are announced in the
Strategic Report, including
information on pipeline on
page 31.
DTR 4.1.11R(2)
Details of the Share
Buy-Back programme in
place during 2024 are
provided on p.155.
DTR 4.1.11R(5)
The worldwide operations
of PPHE Hotel Group are
set out on p.8.
DTR7.2.1R
Details of the Corporate
Governance Code are set
out on p. 103.
DTR 7.2.8
Pursuant to DTR 7.2.8,
the annual review of the
Board Diversity Policy is
found in the report of the
Nomination Committee at
page 123.
Article 19 of the Market Abuse Regulation
The interests of each Director disclosed to
the Company under Article 19 of the Market
Abuse Regulation as at the end of the
financial year are set out above and on
pages 104-105. There have been no changes
in the interests of each Director in the
period between the end of the financial
year and 31 January 2025.
Share repurchase
At the Annual General Meeting (‘AGM’) held
on 22 May 2024, the Company obtained
shareholder authorisation for the buy-back
of up to 2,118,165 ordinary shares of nil par
value, being approximately 10% of the issued
share capital of the Company (the ‘Buy-Back
Authority’). This authority renewed and
replaced the authority granted at the AGM
held on 23 May 2023. The Buy-Back
Authority will expire 15 months after the
resolution was passed on 22 May 2024
unless modified or terminated earlier by
shareholder vote at a general meeting.
During the period 1 January 2024 to
31 December 2024, a total of 616,966
shares were purchased.
UK Listing Rule 6.6.4R
The following table is disclosed pursuant to
UK Listing Rule 6.6.4R. The table sets out only
those sections of Listing Rule 6.6.1R which
are applicable to the Company.
The information required to be disclosed
can be located in the Annual Report at the
references set out below:
Section
Information
Location
3
Details of
long-term
incentive
schemes
Note 11 to the
consolidated
financial
statements
9
Contracts of
significance
Note 12 to the
consolidated
financial
statements
10
Provision of
services by a
controlling
shareholder
Note 28 to the
consolidated
financial
statements
13
Controlling
shareholder
statement
Directors’
report
Environmental, Social and Governance
reporting
UK Streamlined Energy and Carbon Reporting
In line with market practice for UK listed
businesses, our Streamlined Energy and
Carbon Reporting, UK Scope 1, Scope 2 and
Scope 3 emissions, intensity ratio and yearly
comparisons are provided in the ESG Report
at page 87, including information as to
quantification and reporting methodology.
TCFD
The Company has included in its annual
financial report climate-related financial
disclosures consistent with the TCFD
Recommendations and Recommended
Disclosures. In accordance with UK Listing
Rule 6.6.6(8)R, the TCFD Report on pages 84
of this Annual Report and Accounts
document represents the disclosure
required under the TCFD recommendations.
Energy efficiency action
For energy efficiency actions, please see the
ESG section (including the TCFD Report) on
page 88.
Auditors
Brightman Almagor Zohar & Co. (a Firm in
the Deloitte Global Network) have acted as
auditors in the 2024 financial year before
the issue of a new audit tender. This is the
first year of appointment for this auditor.
The Audit Committee report sets out the
appointment and onboarding process on
page 128. These processes are in line with
the Financial Reporting Council’s document
‘Audit Committees and the External Audit:
Minimum Standard’, which was published in
2023. The re-appointment of the auditors
will be included in the agenda of the
Company’s Annual General Meeting.
Going concern
The Board has an obligation under the
Code to state whether it believes that the
Company and the Group will be able to
continue in operation and meet their
liabilities as they fall due over a specified
period determined by the Board, taking
account of the current position and the
principal and emerging risks of the
Company and the Group. The Board
believes it is taking all appropriate steps
to support the sustainability and growth
of the Group’s activities The Viability
Statement on page 100 and the report of
the Audit Committee contain the necessary
information to determine viability over a
three-year time horizon.
In determining the assumptions used
in cash flow forecasts, the Directors
considered various third party market
predictions and considered the current
principal and emerging risks facing the
Group while focusing specifically on
macro-economic market disruptions
and inflation, and the impact this could
have on future performance and liquidity
of the Group. Based on these cash flow
forecasts, the Directors confirm they have
a reasonable expectation that the Group
has adequate resources to continue in
operational existence for at least 12 months
from the date of signing these financial
statements. This, taken together with their
conclusions in Note 1 to the consolidated
financial statements, has led the Directors
to conclude that it is appropriate to prepare
the 2024 consolidated financial statements
on a going concern basis.
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
154
155
Strategic Report
Corporate Governance
Financial Statements
Appendices
Financial risk management objectives
and policies
The consolidated financial statements
include the Company’s objectives, policies
and processes for managing its capital,
its financial risk management objectives,
details of its financial instruments and
hedging activities, and its exposure to
credit risk and liquidity risk.
Directors’ responsibilities
The Directors are required to prepare
the Annual Report and the consolidated
financial statements for each financial
year to give a true and fair view of the
state of affairs of the Company and the
undertakings included in the consolidation
taken as a whole as at the end of the
financial year, and of the profit or loss for
that year. In preparing the consolidated
financial statements, the Directors should:
• select suitable accounting policies and
apply them consistently;
• make judgements and estimates that are
reasonable;
• state whether applicable accounting
standards have been followed, subject to
any material departures disclosed and
explained in the consolidated financial
statements; and
• prepare the consolidated financial
statements on a going concern basis
unless it is inappropriate to presume that
the Company will continue in business.
The Directors confirm that they have
complied with the above requirements
in preparing the consolidated financial
statements. The Directors are responsible
for keeping proper accounting records
which disclose with reasonable accuracy
at any time the financial position of the
Company and enable them to ensure that the
consolidated financial statements have been
properly prepared in accordance with
applicable Guernsey laws and such UK laws
and regulations as are applicable. The
Directors are responsible for safeguarding
the assets of the Group and hence for taking
reasonable steps for the prevention and
detection of fraud and other irregularities.
Directors’ declaration
So far as each of the Directors, who is a
Director at the time the Directors’ Report
is approved, is aware, there is no relevant
audit information of which the Company’s
auditors are unaware and each has taken all
the steps he or she ought to have taken as a
Director to make himself or herself aware
of any relevant audit information and to
establish that the Company’s auditors
are aware of that information.
Directors’ responsibility statement
Each of the Directors named on pages
104-105 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; and
(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
26 February 2025
Greg Hegarty
Co-CEO & Executive Director
26 February 2025
Daniel Kos
Chief Financial Officer & Executive
Director
26 February 2025
Directors’ report – continued
INDEPENDENT AUDITOR'S REPORT
To the Shareholders of PPHE Hotel Group Limited
Opinion
We have audited the consolidated financial
statements of PPHE Hotel Group Limited and
its subsidiaries (the Group), which comprise
the consolidated statement of financial
position as at 31 December 2024, and the
consolidated income statement, consolidated
statement of comprehensive income,
consolidated statement of changes in equity
and consolidated statement of cash flows
for the year then ended, and notes to the
consolidated financial statements, including
material accounting policy information.
In our opinion, the accompanying
consolidated financial statements:
• give a true and fair view of the financial
position of the Group as at 31 December
2024 and of its financial performance and
its cash flows for the year then ended;
• have been properly prepared in
accordance with International Financial
Reporting Standards (IFRS® Accounting
Standards) as adopted by the European
Union; and
• have been prepared in accordance with
the requirements of the Companies
(Guernsey)Law, 2008.
Basis for Opinion
We conducted our audit in accordance with
International Standards on Auditing (ISAs).
Our responsibilities under those standards
are further described in the Auditor’s
Responsibilities for the Audit of the
Consolidated Financial Statements section
of our report. We are independent of the
Group in accordance with the International
Ethics Standards Board for Accountants’
International Code of Ethics for Professional
Accountants (including International
Independence Standards) (IESBA Code),
including the UK FRC’s Ethical Standard
as applied to listed public interest entities,
and we have fulfilled our other ethical
responsibilities in accordance with these
requirements. We believe that the audit
evidence we have obtained is sufficient
and appropriate to provide a basis for
our opinion.
Key Audit Matters
Key audit matters are those matters that,
in our professional judgment, were of most
significance in our audit of the consolidated
financial statements of the current period.
These matters were addressed in the
context of our audit of the consolidated
financial statements as a whole, and in
forming our opinion thereon, and we
do not provide a separate opinion on
these matters.
We have fulfilled the responsibilities
described in the Auditor’s responsibilities
for the audit of the consolidated financial
statements section of our report, including
in relation to this matter. Accordingly,
our audit included the performance of
procedures designed to respond to
our assessment of the risks of material
misstatement of the consolidated financial
statements. The results of our audit
procedures, including the procedures
performed to address the matter below,
provide the basis for our audit opinion
on the accompanying consolidated
financial statements.
Key Audit Matter
Impairment of property, plant, and equipment
and right of use assets
The Group is an international hospitality real
estate entity that owns, co-owns, leases and
develops hotels, resorts, and campsites.
The carrying value of property, plant, and
equipment and right-of-use assets as at
31 December 2024 was £1,421,376K and
£225,265K, respectively.
As noted in Note 2(d) and 2(k), property,
plant, and equipment and right-of-use assets
are measured at cost, less accumulated
depreciation and impairment losses. For the
results of management’s impairment testing
of property, plant, and equipment as of
31 December 2024 refer to Note 4b.
At each reporting date, the Group
reviews the carrying amounts of its
non-financial assets to determine whether
there is any indication that those assets
may be impaired. If any such indication
exists, the recoverable amount of the
asset is estimated. The Group engages
independent external experts to
perform property valuations.
The impairment assessment process
requires management to make judgments
and consider factors related to historical
experience, market conditions, and
property-specific information available at
the time of the assessment. Performing
audit procedures to evaluate the
reasonableness of such information
involved a high degree of auditor judgment
and an increased extent of effort. As such
we have identified impairment of property,
plant, and equipment and right-of-use assets
as a key audit matter.
How our audit addressed the matter
Our audit procedures included among
others:
• Understanding management’s process
for identifying indicators of impairment
of property, plant, and equipment and
right-of-use assets and for performing
their impairment assessment and
related valuations;
• Obtaining the third-party valuations for
properties with impairment indicators
and with the assistance of our valuation
experts testing the data used in the
valuation. Our focus included evaluating
the methodology used, reviewing the
reasonableness of key assumptions,
including capitalisation rates, revenue
and expense growth rates, and
discount rates.
• Testing the details and mathematical
accuracy of the valuations.
• Evaluating the adequacy of the Group’s
disclosures in relation to property, plant
and equipment and right-of-use assets.
PPHE Hotel Group
Annual Report and Accounts 2024
157
Strategic Report
Corporate Governance
Financial Statements
Appendices
PPHE Hotel Group
Annual Report and Accounts 2024
156
Other Matter
The consolidated financial statements of the
Group for the year ended 31 December
2023 were audited by another auditor who
expressed an unmodified opinion on those
financial statements on 28 February 2024.
Other Information
The other information comprises the
information included in the annual report,
other than the consolidated financial
statements and our auditor’s report
thereon. The directors are responsible
for the other information contained within
the annual report. Our opinion on the
consolidated financial statements does not
cover the other information and we do not
express any form of assurance conclusion
thereon. Our responsibility is to read the
other information and, in doing so, consider
whether the other information is materially
inconsistent with the consolidated financial
statements or our knowledge obtained in
the course of the audit, or otherwise
appears to be materially misstated. If we
identify such material inconsistencies or
apparent material misstatements, we are
required to determine whether this gives
rise to a material misstatement in the
consolidated financial statements
themselves. If, based on the work we
have performed, we conclude that there
is a material misstatement of this other
information, we are required to report
that fact. We have nothing to report in
this regard.
Responsibilities of Management and
Those Charged with Governance for
the Consolidated Financial Statements
Management is responsible for the
preparation and fair presentation of the
consolidated financial statements in
accordance with IFRS Accounting
Standards as adopted by the European
Union, and for such internal control as
management determines is necessary to
enable the preparation of consolidated
financial statements that are free from
material misstatement, whether due to
fraud or error.
In preparing the consolidated financial
statements, management is responsible for
assessing the Group’s ability to continue as
a going concern, disclosing, as applicable,
matters related to going concern and using
the going concern basis of accounting
unless management either intends to
liquidate the Group or to cease operations,
or has no realistic alternative but to do so.
Those charged with governance are
responsible for overseeing the Group’s
financial reporting process.
Auditor’s Responsibilities for the Audit of
the Consolidated Financial Statements
Our objectives are to obtain reasonable
assurance about whether the consolidated
financial statements as a whole are free from
material misstatement, whether due to fraud
or error, and to issue an auditor’s report
that includes our opinion. Reasonable
assurance is a high level of assurance but is
not a guarantee that an audit conducted in
accordance with ISAs will always detect
a material misstatement when it exists.
Misstatements can arise from fraud or error
and are considered material if, individually or
in the aggregate, they could reasonably be
expected to influence the economic decisions
of users taken on the basis of these
consolidated financial statements.
As part of an audit in accordance with ISAs,
we exercise professional judgment and
maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material
misstatement of the consolidated financial
statements, whether due to fraud or error,
design and perform audit procedures
responsive to those risks, and obtain audit
evidence that is sufficient and appropriate
to provide a basis
• for our opinion. The risk of not detecting
a material misstatement resulting from
fraud is higher than for one resulting
from error, as fraud may involve
collusion, forgery, intentional omissions,
misrepresentations, or the override of
internal control.
• Obtain an understanding of internal
control relevant to the audit in order
to design audit procedures that are
appropriate in the circumstances, but not
for the purpose of expressing an opinion
on the effectiveness of the Group’s
internal control.
• Evaluate the appropriateness of
accounting policies used and the
reasonableness of accounting estimates
and related disclosures made by
management.
• Conclude on the appropriateness of
management’s use of the going concern
basis of accounting and, based on the
audit evidence obtained, whether a
material uncertainty exists related to
events or conditions that may cast
significant doubt on the Group’s ability
to continue as a going concern. If we
conclude that a material uncertainty
exists, we are required to draw attention
in our auditor’s report to the related
disclosures in the consolidated financial
statements or, if such disclosures are
inadequate, to modify our opinion. Our
conclusions are based on the audit
evidence obtained up to the date of our
auditor’s report. However, future events
or conditions may cause the Group to
cease to continue as a going concern.
• Evaluate the overall presentation,
structure, and content of the
consolidated financial statements,
including the disclosures, and whether
the consolidated financial statements
represent the underlying transactions
and events in a manner that achieves
fair presentation.
• Plan and perform the group audit to
obtain sufficient appropriate audit
evidence regarding the financial
information of the entities or business
units within the group as a basis for
forming an opinion on the group financial
statements. We are responsible for the
direction, supervision and review of the
audit work performed for purposes of
the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged
with governance regarding, among other
matters, the planned scope and timing of
the audit and significant audit findings,
including any significant deficiencies in
internal control that we identify during
our audit.
We also provide those charged with
governance with a statement that we
have complied with relevant ethical
requirements regarding independence, and
to communicate with them all relationships
and other matters that may reasonably be
thought to bear on our independence, and
where applicable, actions taken to eliminate
threats or safeguards applied.
From the matters communicated with those
charged with governance, we determine
those matters that were of most significance
in the audit of the consolidated financial
statements of the current period and are
therefore the key audit matters. We describe
these matters in our auditor’s report unless
law or regulation precludes public disclosure
about the matter or when, in extremely rare
circumstances, we determine that a matter
should not be communicated in our report
because the adverse consequences of doing
so would reasonably be expected to outweigh
the public interest benefits of such
communication.
Report on Other Legal and
Regulatory Requirements
Pursuant to Section 9.8.10 (1) and (2)
of the Listing Rules of the Financial
Conduct Authority, we were engaged to
review management’s statement pursuant
to Section 9.8.6 R (6) of the Listing Rules
of the Financial Conduct Authority that
relate to provisions 6 and 24 to 29 of the
UK Corporate Governance Code and the
Management Board’s statement pursuant
to Section 9.8.6 R (3) of the Listing Rules
in the United Kingdom in the financial year
2024 included in the Viability statement
on page 100 and in the section Going
concern on page 155. We have no
exceptions to report.
The engagement partner on the audit
resulting in this independent auditor’s
report is Ronen Cohen.
Ronen Cohen
(For and on behalf of Brightman Almagor
Zohar & Co., a Firm in the Deloitte Global
Network)
Tel Aviv, Israel
26 February 2025
INDEPENDENT AUDITOR'S REPORT
To the Shareholders of PPHE Hotel Group Limited – continued
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
158
159
Strategic Report
Corporate Governance
Financial Statements
Appendices
Consolidated statement of financial position
as at 31 December 2024
Consolidated income statement
for the year ended 31 December 2024
As at 31 December
Note
2024
£’000
2023
£’000
Assets
Non-current assets:
Intangible assets
3
7,632
10,665
Property, plant and equipment
4
1,421,376
1,412,830
Right-of-use assets
17
225,265
229,215
Investment in joint ventures
5
8,233
5,438
Other non-current assets
6
46,993
39,646
Restricted deposits and cash
12(b)
5,826
10,385
Deferred income tax asset
25
12,890
13,833
1,728,215
1,722,012
Current assets:
Restricted deposits and cash
12(b)
16,602
6,909
Inventories
2,703
3,288
Trade receivables
7
18,712
17,880
Other receivables and
prepayments
8
17,683
23,260
Cash and cash equivalents
9
113,225
150,416
168,925
201,753
Total assets
1,897,140
1,923,765
As at 31 December
Note
2024
£’000
2023
£’000
Revenues
19
442,787
414,598
Operating expenses
20
(303,988)
(284,090)
EBITDAR
138,799
130,508
Rental expenses
17
(2,336)
(2,332)
EBITDA
136,463
128,176
Depreciation and amortisation
3, 4, 17
(47,083)
(45,068)
EBIT
89,380
83,108
Financial expenses
21
(42,634)
(36,145)
Financial income
22
5,226
4,758
Other expenses
23(a)
(13,243)
(13,046)
Other income
23(b)
5,048
4,416
Net expenses for financial liability in respect of Income Units sold to private investors
24
(12,896)
(14,156)
Share in results of joint ventures
5
(268)
(113)
Profit before tax
30,613
28,822
Income tax expense
25
(2,881)
(1,677)
Profit for the year
27,732
27,145
Profit (loss) attributable to:
Equity holders of the parent
28,206
22,415
Non-controlling interests
(474)
4,730
27,732
27,145
Basic earnings per share (in Pound Sterling)
26
0.67
0.53
Diluted earnings per share (in Pound Sterling)
26
0.66
0.53
The accompanying notes are an integral part of the consolidated financial statements.
As at 31 December
Note
2024
£’000
2023
£’000
Equity and liabilities
Equity:
10
Issued capital
–
–
Share premium
134,472
133,469
Treasury shares
(14,519)
(6,873)
Foreign currency translation
reserve
4,862
13,903
Hedging reserve
9,995
7,801
Accumulated earnings
177,874
166,281
Attributable to equity holders of
the parent
312,684
314,581
Non-controlling interests
213,374
216,592
Total equity
526,058
531,173
Non-current liabilities:
Borrowings
13
805,057
845,199
Provision for concession fee on
land
14
4,995
5,233
Financial liability in respect of
Income Units sold to private
investors
15
110,565
114,287
Other financial liabilities
16
277,878
280,200
Deferred income taxes
25
5,192
5,878
1,203,687
1,250,797
Current liabilities:
Trade payables
9,088
14,809
Other payables and accruals
18
77,720
79,149
Borrowings
13
80,587
47,837
167,395
141,795
Total liabilities
1,371,082
1,392,592
Total equity and liabilities
1,897,140
1,923,765
The accompanying notes are an integral part of the consolidated
financial statements. Date of approval of the consolidated financial
statements: 26 February 2025. 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
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
160
161
Strategic Report
Corporate Governance
Financial Statements
Appendices
Consolidated statement of comprehensive income
for the year ended 31 December 2024
Consolidated statement of changes in equity
for the year ended 31 December 2024
As at 31 December
2024
£’000
2023
£’000
Profit for the year
27,732
27,145
Other comprehensive income (loss) Items that may be reclassified subsequently to profit or loss:1
Profit (loss) from cash flow hedges
4,315
(5,007)
Foreign currency translation adjustments of foreign operations
(14,344)
(8,463)
Other comprehensive loss
(10,029)
(13,470)
Total comprehensive income
17,703
13,675
Total comprehensive income (loss) attributable to:
Equity holders of the parent
21,238
13,812
Non-controlling interests
(3,535)
(137)
17,703
13,675
1 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.
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 2024
–
133,469
(6,873)
13,903
7,801
166,281
314,581
216,592
531,173
Profit (loss) for the year
–
–
–
–
–
28,206
28,206
(474)
27,732
Other comprehensive income
(loss) for the year
–
–
–
(9,159)
2,191
–
(6,968)
(3,061)
(10,029)
Total comprehensive income (loss)
–
–
–
(9,159)
2,191
28,206
21,238
(3,535)
17,703
Share-based payments
–
1,389
–
–
–
88
1,477
72
1,549
Share buy-back
–
–
(7,864)
–
–
–
(7,864)
–
(7,864)
Dividend distribution2
–
–
–
–
–
(15,549)
(15,549)
–
(15,549)
Dividend paid to non-controlling
interests
–
–
–
–
–
–
–
(1,452)
(1,452)
Exercise of options
–
(386)
218
–
–
–
(168)
–
(168)
Transactions with non-controlling
interests (see Note 5)
–
–
–
118
3
(1,152)
(1,031)
1,697
666
Balance as at 31 December 2024
–
134,472
(14,519)
4,862
9,995
177,874
312,684
213,374
526,058
Balance as at 1 January 2023
–
133,177
(5,472)
20,039
10,950
156,364
315,058
188,187
503,245
Profit for the year
–
–
–
–
–
22,415
22,415
4,730
27,145
Other comprehensive loss for the
year
–
–
–
(6,027)
(2,576)
–
(8,603)
(4,867)
(13,470)
Total comprehensive income (loss)
–
–
–
(6,027)
(2,576)
22,415
13,812
(137)
13,675
Share-based payments
–
442
–
–
–
93
535
87
622
Share buy-back
–
–
(1,621)
–
–
–
(1,621)
–
(1,621)
Dividend distribution2
–
–
–
–
–
(11,897)
(11,897)
–
(11,897)
Dividend paid to non-controlling
interests
–
–
–
–
–
–
–
(1,436)
(1,436)
Exercise of options
–
(150)
220
–
–
–
70
–
70
Transactions with non-controlling
interests (see Note 5)
–
–
–
(109)
(573)
(694)
(1,376)
29,891
28,515
Balance as at 31 December 2023
–
133,469
(6,873)
13,903
7,801
166,281
314,581
216,592
531,173
1 No par value.
2 The dividend distribution comprises a final dividend for the year ended 31 December 2023 of 20.0 pence per share (31 December 2022: 12.0 pence per share) and an interim
dividend of 17.0 pence per share paid in 2024 (2023: 16.0 pence per share).
The accompanying notes are an integral part of the consolidated financial statements.
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Consolidated statement of cash flows
for the year ended 31 December 2024
As at 31 December
Note
2024
£’000
2023
£’000
Cash flows from operating activities:
Profit for the year
27,732
27,145
Adjustment to reconcile profit to cash provided by operating activities:
Financial expenses and expenses for financial liability in respect of Income Units sold to private
investors
21,24
55,530
50,301
Financial income
22
(5,226)
(4,758)
Income tax expense
25
2,881
1,677
Loss on buy-back of Income Units sold to private investors
23
1,486
3,266
Re-measurement of lease liability
23
3,984
3,852
Revaluation of Park Plaza County Hall London Units
23
(450)
(1,600)
Capital loss on sale of fixed assets, net
23
195
29
Share in results of joint ventures
5
268
113
Share appreciation rights revaluation
23, 5(b)(i)
767
(2,816)
Fair value movement derivatives through profit and loss
23
(4,299)
4,553
Depreciation and amortisation
3, 4, 17
47,083
45,068
Share-based payments
1,549
622
103,768
100,307
Changes in operating assets and liabilities:
Decrease (increase) in inventories
468
(152)
Increase in trade and other receivables
(5,694)
(1,803)
Increase (decrease) in trade and other payables
(6,002)
1,795
(11,228)
(160)
Cash paid and received during the period for:
Interest paid
(54,710)
(50,104)
Interest received
4,837
3,721
Taxes paid
(2,436)
(2,558)
(52,309)
(48,941)
Net cash provided by operating activities
67,963
78,351
As at 31 December
Note
2024
£’000
2023
£’000
Cash flows from investing activities:
Investments in property, plant and equipment
4
(74,075)
(115,090)
Investments in intangible assets
3
(280)
(779)
Disposal of property, plant and equipment and intangible assets
3,4
328
–
Loan to joint venture
(2,984)
(888)
Decrease (increase) in restricted cash
(5,572)
960
Net cash used in investing activities
(82,583)
(115,797)
Cash flows from financing activities:
Proceeds from loans and borrowings
46,668
65,265
Buy-back of Income Units previously sold to private investors
(5,287)
(5,609)
Proceeds (payment) of derivatives
29(c)
1,481
(4,080)
Dividend payment
(15,549)
(11,897)
Dividend payment by a subsidiary to non-controlling shareholders
(1,452)
(1,436)
Repayment of loans and borrowings
(41,147)
(31,717)
Repayment of leases
(4,162)
(4,095)
Proceeds from transactions with non-controlling interest
10,444
22,489
Payments in relation to transactions with non-controlling interests
(2,734)
(1,018)
Purchase of treasury shares
(7,864)
(1,621)
Exercise of options settled in cash
(167)
70
Net cash (used in) provided by financing activities
(19,769)
26,351
Decrease in cash and cash equivalents
(34,389)
(11,095)
Net foreign exchange differences
(2,802)
(2,078)
Cash and cash equivalents at beginning of year
150,416
163,589
Cash and cash equivalents at end of year
113,225
150,416
Non-cash items:
Lease additions and lease re-measurement
5,938
11,166
Outstanding payable on investments in property, plant and equipment
8,077
13,934
Receivables in respect of transaction with non-controlling interests
–
7,044
The accompanying notes are an integral part of the consolidated financial statements.
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Notes to consolidated financial statements
for the year ended 31 December 2024
Note 1 General
The consolidated financial statements of
PPHE Hotel Group Limited (the ‘Company’)
and its subsidiaries (together, the ‘Group’)
for the year ended 31 December 2024 were
authorised for issuance in accordance
with a resolution of the Directors on
26 February 2025.
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 (UKLA) and the shares
are traded on the Main Market for listed
securities of the London Stock Exchange.
Contact details of the Group can be found on
the final page of these financial statements.
a.
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.
b.
Assessment of going concern and liquidity:
As part of their ongoing responsibilities,
the Directors have recently undertaken a
thorough review of the Group’s cash flow
forecast and potential liquidity risks.
Detailed budgets and cash flow projections,
which take into account the current trading
environment and the industry-wide cost
pressures, have been prepared for 2025
and 2026, and show that the Group’s
hotel operations are expected to be cash
generative during this period. Furthermore,
under those cash flow projections it is
expected that the Group will comply with
its loan covenants. Having reviewed those
cash flow projections, the Directors have
determined that the Company is likely
to continue in business for at least
12 months from the date of approval of
the consolidated financial statements.
Note 2 Accounting policies
a.
Basis of preparation
The consolidated financial statements
of the Group have been prepared on a
historical cost basis, except for derivative
financial instruments, income units in Park
Plaza County Hall London and investments in
marketable securities which are measured
at fair value. The consolidated financial
statements are presented in Pound
Sterling and all values are rounded to the
nearest thousand (£’000) except where
otherwise indicated.
Statement of compliance
The consolidated financial statements of the
Group have been prepared in accordance
with International Financial Reporting
Standards (IFRS® Accounting Standards),
which comprise standards and
interpretations issued by the International
Accounting Standards Board (IASB) and
International Financial Reporting Standards
Interpretations Committee (IFRIC) as
adopted by the European Union.
The accounting policies used in preparing
the consolidated financial statements are
set out below. These accounting policies
have been consistently applied to the
periods presented, except where
otherwise indicated.
b.
Significant accounting judgements, estimates
and assumptions
The preparation of the Group’s consolidated
financial statements requires management
to make judgements, estimates and
assumptions that affect the reported
amounts of revenues, expenses, assets and
liabilities, and the disclosure of contingent
liabilities, at the reporting date. However,
uncertainty about these assumptions and
estimates could result in outcomes that
require a material adjustment to the
carrying amount of the asset or liability
affected in future periods.
Judgements
In the process of applying the Group’s
accounting policies, management has made
the following judgements, which have the most
significant effect on the amounts recognised
in the consolidated financial statements.
Financial liability in respect of Income
Units sold to private investors
In 2010, the construction of Park Plaza
London Westminster Bridge was completed
and the hotel opened to customers. Out of
1,019 rooms, 535 rooms (‘Income Units’)
were sold at that time to private investors
under 999-year lease agreements. The
sales transactions are accounted for as a
transaction in which the investors, in return
for the upfront consideration paid (which is
accounted for as financial liability) for the
Income Units, receive 999 years of net
income from a specific revenue-generating
portion of an asset (contractual right to a
stream of future cash flows) (see more
details in Note 2(e)).
Management applied the following
professional judgement in determining the
accounting treatment for the amounts
received upfront.
As the liability to pay future cash flows
includes a component that is based on
the future net operating income (NOI)
generated by the room, management
considered whether this component meets
the definition in IFRS 9 of an embedded
derivative which needs to be accounted
for separately. According to IFRS 9, if the
changes in value arise from a non-financial
variable that is specific to a party to the
contract, then the component does not
meet the definition of a derivative. As the
NOI is generated by a specific room and
the NOI can be affected by non-financial
factors, management concluded that this
component does not meet the definition
of an embedded derivative.
Based on its analysis of IFRS 9 and relevant
professional publications, management
considers a floating-rate liability as an
instrument with variable cash flow amounts
arising from changes in market variables. Due
to the variability of the periodic NOI cash flows,
which reflect primarily market conditions
such as occupancy and the price charged for
the room, management views the liability in
respect of Income Units as a floating-rate
financial liability. Pursuant to IFRS 9.B5.4.5 in
respect of floating-rate financial instruments,
changes in future estimated cash flows from
the Income Units are recognised prospectively
in the period in which they occur. As the Group
is not exposed to any risk nor receives any
benefit in respect of future changes in NOI,
management is of the view that the application
of IFRS 9.B5.4.5 is the appropriate accounting
treatment. It also faithfully represents the
substance of the transaction from which it
has arisen and reflects the economics of
the transaction with the investors in the
Income Units.
Estimates and assumptions
Management did not identify any critical
estimates included in the Group’s
consolidated financial statements for which
there is a significant risk of resulting in a
material adjustment to the carrying
amounts of assets and liabilities within the
next financial year.
c.
Foreign currency translation
The functional currency of the Company
is Pound Sterling. The consolidated financial
statements are also presented in
Pound Sterling.
Each entity of the Group determines its own
functional currency and items included in
the financial statements of each entity are
measured using that functional currency.
Foreign currency exchange differences in
respect of loans denominated in foreign
currency which were granted by the
Company to its subsidiaries are reflected
in the foreign currency translation reserve
in equity, as these loans are, in substance,
a part of the Group’s net investment in the
foreign operation.
The following exchange rates in relation
to Pound Sterling were prevailing at
reporting dates:
As at 31 December
2024
In Pound
Sterling
2023
In Pound
Sterling
Euro
0.830
0.869
Hungarian Forint
0.002
0.002
US Dollar
0.797
0.786
Percentage increase (decrease) in exchange
rates at year end compared with the
previous year:
As at 31 December
2024
In % versus
Pound
Sterling
2023
In % versus
Pound
Sterling
Euro
(4.5)
(1.8)
Hungarian Forint
(11.1)
2.8
US Dollar
1.4
(5.2)
d.
Property, plant and equipment
Property, plant and equipment are
measured at cost, less accumulated
depreciation and impairment losses.
Depreciation is calculated using the
straight-line method, over the shorter of the
estimated useful life of the assets which are
mainly as follows:
Years
Hotel buildings
50 to 95
Furniture and equipment
2 to 25
e.
Impairment of non-financial assets
At each reporting date, the Group
reviews the carrying amounts of its
non-financial assets to determine whether
there is any indication that those assets
may be impaired. If any such indication
exists, the recoverable amount of the
asset is estimated. Where it is not possible
to estimate the recoverable amount of an
individual asset, the Group estimates the
recoverable amount of the cash-generating
unit to which the asset belongs.
Recoverable amount is the higher of an
asset’s fair value less costs of disposal and
its value in use. In assessing value in use, the
estimated future cash flows are discounted
to their present value using a pre-tax
discount rate that reflects current market
assessments of the time value of money
and the risks specific to the asset.
If the recoverable amount of an asset (or
cash-generating unit) is estimated to be
less than its carrying amount, the asset
is considered impaired and the carrying
amount of the asset (cash-generating unit)
is reduced to its recoverable amount.
Impairment losses are recognised as an
expense immediately.
f.
Financial instruments
i)
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial
recognition, as subsequently measured at
amortised cost or fair value through profit
or loss.
The Group initially measures a financial
asset at its fair value plus, in the case of
a financial asset not at fair value through
profit or loss, transaction costs.
Subsequent measurement
For purposes of subsequent measurement,
financial assets are classified in two
categories:
• financial assets at amortised cost (debt
instruments); and
• financial assets at fair value through
profit or loss.
Cash and cash equivalents
Cash and cash equivalents in the
statement of financial position comprise
cash at banks and on hand and short-term
highly liquid investments with a maturity
of three months or less, that are held for
the purpose of meeting short-term cash
commitments and are readily convertible
to a known amount of cash and subject to
an insignificant risk of changes in value.
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Financial assets at amortised
cost (debt instruments)
The Group measures financial assets at
amortised cost if both of the following
conditions are met:
• the financial asset is held within a
business model with the objective of
holding financial assets in order to collect
contractual cash flows; and
• the contractual terms of the financial
asset give rise on specified dates to cash
flows that are ‘solely payments of
principal and interest’ (SPPI) on the
principal amount outstanding.
Financial assets at amortised cost are
subsequently measured using the effective
interest rate (EIR) method and are subject
to impairment. Gains and losses are
recognised in profit or loss when the asset
is derecognised, modified or impaired.
The Group’s financial assets at amortised
cost include trade receivables and loans to
joint ventures.
Financial assets at fair value
through profit or loss
Financial assets at fair value through profit
or loss include financial assets held for
trading. Financial assets are classified as
held for trading if they are acquired for the
purpose of selling or repurchasing in the
near term. Derivatives, including separated
embedded derivatives, are also classified as
held for trading unless they are designated
as effective hedging instruments.
Financial assets at fair value through profit
or loss are carried in the statement of
financial position at fair value with net
changes in fair value recognised in the
income statement.
This category includes derivative
instruments, investments in money market
funds and Income Units in Park Plaza County
Hall London (Note 6).
Impairment of financial assets
For trade receivables the Group applies
a simplified approach in calculating the
expected credit loss (ECL). Therefore, the
Group does not track changes in credit risk,
but instead recognises a loss allowance based
on lifetime ECLs at each reporting date.
The Group considers a financial asset
to be in default when internal or external
information indicates that the Group
is unlikely to receive the outstanding
contractual amounts in full. A financial asset
is written off when there is no reasonable
expectation of recovering the contractual
cash flows.
ii)
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial
recognition, as financial liabilities at fair
value through profit or loss, as measured at
amortised cost (borrowings and payables)
or as derivatives designated as hedging
instruments in an effective hedge,
as appropriate.
All financial liabilities are recognised initially
at fair value and, in the case of loans and
borrowings and payables, net of directly
attributable transaction costs.
The Group’s financial liabilities include trade
and other payables, loans and borrowings
including bank overdrafts, lease liabilities
and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities
depends on their classification, as
described below:
Financial liabilities at fair
value through profit or loss
Financial liabilities at fair value through
profit or loss include financial liabilities
held for trading.
Financial liabilities are classified as held for
trading if they are incurred for the purpose
of repurchasing in the near term. This
category also includes derivative financial
instruments entered into by the Group that
are not designated as hedging instruments in
hedge relationships as defined by IFRS 9.
Separated embedded derivatives are also
classified as held for trading unless they are
designated as effective hedging instruments.
Gains or losses on liabilities held for trading
are recognised in the income statement.
Financial liability in respect of
Income Units sold to private investors
In 2010, the construction of Park Plaza
London Westminster Bridge was completed
and the hotel opened to paying customers.
Out of 1,019 rooms, 535 rooms were sold at
that time to private investors under 999-year
lease agreements. The sales transactions
are accounted for as a transaction in which
the investors, in return for the upfront
consideration paid (which is accounted for as
financial liability) for the Income Units, receive
999 years of net income from a specific
revenue-generating portion of an asset
(contractual right to a stream of future cash
flows). The amounts received upfront are
accounted for as a floating rate financial
liability pursuant to IFRS 9. B5.4.5 and are
being recognised as income over the term of
the lease (i.e. 999 years). Changes in future
estimated cash flows from the Income Units
are recognised prospectively in the period in
which they occur. Since November 2014, the
Company has bought back 92 Income Units
from private investors. Upon buy-back of a
unit, the financial liability relating to that unit
is derecognised and any difference between
the purchase price and the liability
derecognised is recorded in profit and loss.
The entire hotel is accounted for at cost less
accumulated depreciation.
The replacement costs for the Income
Units are fully reimbursed by the private
investors. An amount of 4% of revenues is
paid by the investors on an annual basis
(‘FF&E reserve’) and is accounted for in
profit and loss. The difference between the
actual depreciation cost and the FF&E
reserve is a timing difference which is
recorded in the statement of financial
position as a receivable or liability to the
investor in each respective year.
Modification
When the group exchanges with the
existing lender one debt instrument into
another one with substantially different
terms, such exchange is accounted for as
an extinguishment of the original financial
liability and the recognition of a new financial
liability. Similarly, the group accounts for
substantial modification of terms of an
existing liability or part of it as an
extinguishment of the original financial
liability and the recognition of a new liability.
It is assumed that the terms are substantially
different if the discounted present value
of the cash flows under the new terms,
including any fees paid net of any fees
received and discounted using the original
effective interest rate is at least 10 per cent
different from the discounted present value
of the remaining cash flows of the original
financial liability. If the modification is not
substantial, the difference between: (1) the
carrying amount of the liability before the
modification; and (2) the present value of the
cash flows after modification is recognised
as profit or loss in the income statement.
Derecognition
A financial liability is derecognised when the
obligation under the liability is discharged
or cancelled or expires. When an existing
financial liability is replaced by another from
the same lender on substantially different
terms, or the terms of an existing liability are
substantially modified, such an exchange or
modification is treated as the derecognition
of the original liability and the recognition of a
new liability. The difference in the respective
carrying amounts is recognised in the
statement of profit or loss.
g.
Inventories
Inventories include china, food and
beverages and are valued at the lower of
cost and net realisable value. Cost includes
purchase cost on a first-in, first-out basis.
h.
Derivative financial instruments and
hedge accounting
The Group uses derivative financial
instruments such as interest rate swaps
to hedge its risks associated with interest
rate fluctuations. Such derivative financial
instruments are initially recognised at fair
value on the date on which a derivative
contract is entered into and are
subsequently re-measured at fair value.
Derivatives are carried as assets when the
fair value is positive and as liabilities when
the fair value is negative.
Any gains or losses arising from changes in
fair value on derivatives that do not qualify
for hedge accounting are taken directly to
the income statement.
For the purpose of hedge accounting,
hedges are classified as cash flow hedges
when hedging the exposure to variability in
cash flows that is either attributable to a
particular risk associated with a recognised
asset or liability or a highly probable
forecast transaction.
At the inception of a hedge relationship, the
Group formally designates and documents
the hedge relationship to which the Group
wishes to apply hedge accounting and the
risk management objective and strategy for
undertaking the hedge. The documentation
includes identification of the hedging
instrument, the hedged item or transaction,
the nature of the risk being hedged and how
the Group will assess the effectiveness of
changes in the hedging instrument’s fair
value in offsetting the exposure to changes
in the hedged item’s fair value or cash flows
attributable to the hedged risk. Such hedges
are expected to be highly effective in
achieving offsetting changes in fair value or
cash flows and are assessed on an ongoing
basis to determine that they actually have
been highly effective throughout the
financial reporting periods for which
they were designated.
The effective portion of the gain or loss
on the hedging instrument in a cash flow
hedge is recognised directly in other
comprehensive income, while the ineffective
portion is recognised in profit or loss.
Amounts taken to other comprehensive
income are transferred to the income
statement when the hedged transaction
affects profit or loss, such as when the
hedged financial income or financial
expense is recognised.
i.
Revenue from contracts with customers
Revenue from contracts with customers
is recognised when control of the goods or
services are transferred to the customer at
an amount that reflects the consideration to
which the Group expects to be entitled in
exchange for those goods or services.
Owned, co-owned and leased hotels
Revenues are primarily derived from hotel
operations, including the rental of rooms,
food and beverage sales and other services
from owned, co-owned and leased hotels
operated under the Group’s brand names.
Revenue is recognised when rooms are
occupied, food and beverages are sold and
services are performed.
Campsites and mobile homes
Revenues are primarily derived from short-
term rentals of campsite pitches and mobile
homes operated under the Group’s brand
names. Revenue is recognised when campsite
pitches and/or mobile homes are occupied.
Management fees
Management fees are earned from hotels
managed by the Group, under long-term
contracts with the hotel owner.
Management fees include a base fee, which
is generally a percentage of hotel revenue,
and an incentive fee, which is based on the
hotel’s profitability. Revenue is recognised
when earned and realised or realisable
under the terms of the agreement.
Franchise and reservation fees
Franchise and reservation fees are received
in connection with a licence of the Group’s
brand names, under long-term contracts
with the hotel owner. The Group charges
franchise and reservation fees as a
percentage of hotel revenue. Revenue is
recognised when earned and realised or
realisable under the terms of the agreement.
Marketing fees
Marketing fees are received in connection
with the sales and marketing services
offered by the Group, under long-term
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
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contracts with the hotel owner. The Group
charges marketing fees as a percentage of
hotel revenue. Revenue is recognised when
earned and realised or realisable under the
terms of the agreement.
Customer loyalty programme
The Group participates in the Radisson
RewardsTM customer loyalty programme
to provide customers with incentives to
buy room nights. This customer loyalty
programme is owned and operated by the
Radisson Hotel Group and therefore the
entity retains no obligations in respect of
the award credits other than to pay
Radisson Hotel Group for the award credits
purchased and granted to customers. The
customers are entitled to utilise the awards
as soon as they are granted.
The Group purchases these award credits
from Radisson Hotel Group and issues these
to its customers in order to enhance its
customer relationships rather than to earn
a margin from the sale of these award
credits. The Group concluded that it is
acting as principal in this transaction and,
in substance, is earning revenue from
supplying these awards to its customers.
The Group measures these revenues at fair
value and recognises these gross from the
costs of participating in the programme.
Contract balances
Trade receivables
A receivable represents the Group’s
right to an amount of consideration that
is unconditional (i.e. only the passage of
time is required before payment of the
consideration is due).
Advance payments received –
contract liabilities
A contract liability is the obligation to transfer
goods or services to a customer for which
the Group has received consideration (or an
amount of consideration is due) from the
customer. If a customer pays consideration
before the Group transfers goods or
services to the customer, a contract liability
(advance payments received) is recognised
when the payment is made or the payment is
due (whichever is earlier). Contract liabilities
are recognised as revenue when the Group
performs under the contract.
j.
Alternative Performance Measures
EBITDAR
Earnings before interest (Financial income
and expenses), tax, depreciation and
amortisation, impairment loss, rental
expenses, share in results of joint ventures
and exceptional items presented as other
income and expense.
EBITDA
Earnings before interest (Financial income and
expenses), tax, depreciation and amortisation,
impairment loss, share in results of joint
ventures and exceptional items presented
as other income and expense.
EBIT
Earnings before interest (Financial income
and expenses), tax, share in results of joint
ventures and exceptional items presented
as other income and expense.
Net debt
Borrowings less cash and cash equivalents
long-term and short-term restricted cash.
k.
Leases
The Group as lessee
The Group applies a single recognition
and measurement approach for all leases,
except for short-term leases and leases of
low-value assets. The Group recognises
lease liabilities to make lease payments and
right-of-use assets representing the right
to use the underlying assets.
Right-of-use assets
Right-of-use assets are measured at cost,
less any accumulated depreciation and
impairment losses, and adjusted for any
re-measurement of lease liabilities. The cost
of right-of-use assets includes the amount of
lease liabilities recognised, initial direct costs
incurred, and lease payments made at or
before the commencement date less any
lease incentives received. Right-of-use
assets are depreciated on a straight-line
basis over the shorter of the lease term and
the estimated useful lives of the assets,
which are mainly as follows:
Years
Land
50 to 200
Hotel buildings
5 to 95
Offices and storage
1 to 12
Furniture and equipment
2 to 25
Lease liabilities
At the commencement date of the lease,
the Group recognises lease liabilities
measured at the present value of lease
payments to be made over the lease term.
The lease payments include the expected
payments of penalties for terminating the
lease, if the lease term reflects the Group
exercising the option to terminate.
In calculating the present value of lease
payments, the Group uses its incremental
borrowing rate at the lease commencement
date because the interest rate implicit in the
lease is not readily determinable. The
carrying amount of lease liabilities is
re-measured if there is a modification, a
change in the lease term, a change in the
lease payments (e.g. changes to future
payments resulting from a change in an
index or rate used to determine such lease
payments) or a change in the assessment of
an option to purchase the underlying asset.
The Group’s lease liabilities are included in
Other financial liabilities (see Note 16).
Variable lease payments that depend on an
index or rate
On the commencement date, the Company
uses the index or rate prevailing on the
commencement date to calculate the future
lease payments.
For leases in which the Company is the
lessee, the aggregate changes in future
lease payments resulting from a change
in the index or rate (including changes
following a market rent review) are
discounted (without a change in the discount
rate applicable to the lease liability) and
recorded as an adjustment of the lease
liability and the right-of-use asset, only when
there is a change in the cash flows resulting
from the change in the index or rate (that is,
when the adjustment to the lease payments
takes effect).
Variable lease payments
Variable lease payments that do not depend
on an index or interest rate but are based on
performance or usage are recognised as
rent expense as incurred when the Company
is the lessee, and are recognised as income
as earned when the Company is the lessor.
Lease extension and termination options
A non-cancellable lease term includes both
the periods covered by an option to extend
the lease when it is reasonably certain that
the extension option will be exercised and
the periods covered by a lease termination
option when it is reasonably certain that the
termination option will not be exercised.
Short-term leases and leases
of low-value assets
The Group applies the short-term lease
recognition exemption to its short-term
leases of furniture and equipment (i.e. those
leases that have a lease term of 12 months
or less from the commencement date and
do not contain a purchase option). It also
applies the lease of low-value assets
recognition exemption to leases of office
equipment that are considered to be low
value. Lease payments on short-term
leases and leases of low-value assets are
recognised as expense on a straight-line
basis over the lease term.
l.
Employee benefits
Share-based payments
The Board has adopted a share option plan,
under which employees and Directors of the
Group receive remuneration in the form of
share-based payment transactions,
whereby employees render services as
consideration for equity instruments
(equity‑settled transactions).
The cost of equity-settled transactions with
employees is measured by reference to the
fair value at the date on which they are
granted. The fair value is determined by
using an appropriate pricing model, further
details of which are given in Note 11.
Pension
The Group has a defined contribution
pension plan where the employer is liable
only for the employer’s part of the
contribution towards an individual’s
pension plan.
The Group will have no legal obligation
to pay further contributions. The
contributions in the defined contribution
plan are recognised as an expense and no
additional provision is required in the
consolidated financial statements.
m. Provisions
Provisions are recognised when the Group
has a present obligation (legal or constructive)
as a result of a past event, it is probable that
an outflow of resources embodying economic
benefits will be required to settle the obligation
and a reliable estimate can be made of the
amount of the obligation.
n.
Borrowing costs for qualifying assets
Borrowing costs directly attributable to the
acquisition, construction or production of
an asset that necessarily takes a substantial
period of time to get ready for its intended
use or sale are capitalised as part of the
cost of the asset. All other borrowing costs
are expensed in the period in which they
occur. Borrowing costs consist of interest
and other costs that an entity incurs in
connection with the borrowing of funds.
o.
Taxation
Deferred income tax
Deferred income tax is provided using the
liability method on temporary differences at
the reporting date between the tax bases of
assets and liabilities and their carrying
amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all
taxable temporary differences, except in
respect of taxable temporary differences
associated with investments in subsidiaries,
associates and jointly controlled entities,
where the timing of the reversal of the
temporary differences can be controlled
and it is probable that the temporary
differences will not reverse in the
foreseeable future.
Deferred tax assets are recognised to the
extent that it is probable that taxable profit
will be available against which the deductible
temporary differences and the carry
forward of unused tax losses can be utilised.
The carrying amount of deferred income
tax assets is reviewed at each reporting
date and reduced to the extent that it is no
longer probable that sufficient taxable
profit will be available to allow all or part of
the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets
are re-assessed at each reporting date
and are recognised to the extent that it
has become probable that future taxable
profit will allow the deferred tax asset to
be recovered.
Deferred tax assets and liabilities are
measured at the tax rates that are expected
to apply in the year when the asset is realised
or the liability is settled, based on tax rates
(and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax assets and deferred tax
liabilities are offset, if a legally enforceable
right exists to set off current tax assets
against current tax liabilities and the
deferred taxes relate to the same taxable
entity and the same taxation authority.
p.
Changes in accounting policies and disclosures
The Group applied for the first time
certain standards and amendments, which
are effective for annual periods beginning
on or after 1 January 2024. Several other
amendments and interpretations apply
for the first time in 2024, but do not have
an impact on the consolidated financial
statements of the Group. The Group has
not early adopted any other standard,
interpretation or amendment that has
been issued but is not yet effective.
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
PPHE Hotel Group
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Annual Report and Accounts 2024
Annual Report and Accounts 2024
170
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Strategic Report
Corporate Governance
Financial Statements
Appendices
Amendments to IAS 1: Classification of
Liabilities as Current or Non-current
The amendments to IAS 1 clarify the
requirements for classifying liabilities
as current or non-current:
• What is meant by a right to defer
settlement
• That a right to defer must exist at the
end of the reporting period
• That classification is unaffected by the
likelihood that an entity will exercise its
deferral right
• That only if an embedded derivative in
a convertible liability is itself an equity
instrument would the terms of a liability
not impact its classification
In addition, a requirement has been
introduced to require disclosure when a
liability arising from a loan agreement is
classified as non-current and the entity’s
right to defer settlement is contingent on
compliance with future covenants within
12 months.
The amendments had no impact on the
Group’s consolidated financial statements.
q.
Standards issued but not yet applied
Standards issued but not yet effective, or
subject to adoption by the European Union,
up to the date of issuance of the
consolidated financial statements are listed
below. This listing of standards issued are
those that the Group reasonably expects
that might have an impact on disclosures,
financial position or performance when
applied at a future date. The Group intends
to adopt these standards when they
become mandatory.
The following standards have been issued
by the IASB and are not yet effective or are
subject to adoption by the European Union:
Lack of exchangeability – Amendments
to IAS 21
In August 2023, the IASB issued
amendments to IAS 21 The Effects of
Changes in Foreign Exchange Rates to
specify how an entity should assess
whether a currency is exchangeable and
how it should determine a spot exchange
rate when exchangeability is lacking. The
amendments also require disclosure of
information that enables users of its
financial statements to understand how the
currency not being exchangeable into the
other currency affects, or is expected to
affect, the entity’s financial performance,
financial position and cash flows.
The amendments will be effective for annual
reporting periods beginning on or after
1 January 2025. Early adoption is permitted,
but will need to be disclosed. When applying
the amendments, an entity cannot restate
comparative information.
The amendments are not expected to have a
material impact on the Group’s financial
statements.
IFRS 18 Presentation and Disclosure in
Financial Statements
In April 2024, the IASB issued IFRS 18, which
replaces IAS 1 Presentation of Financial
Statements. IFRS 18 introduces new
requirements for presentation within the
statement of profit or loss, including
specified totals and subtotals. Furthermore,
entities are required to classify all income
and expenses within the statement of profit
or loss into one of five categories: operating,
investing, financing, income taxes and
discontinued operations, whereof the first
three are new.
It also requires disclosure of newly defined
management-defined performance measures,
subtotals of income and expenses, and
includes new requirements for aggregation
and disaggregation of financial information
based on the identified ‘roles’ of the primary
financial statements and the notes.
In addition, narrow-scope amendments
have been made to IAS 7 Statement of Cash
Flows, which include changing the starting
point for determining cash flows from
operations under the indirect method,
from ‘profit or loss’ to ‘operating profit
or loss’ and removing the optionality
around classification of cash flows from
dividends and interest. In addition, there
are consequential amendments to several
other standards.
IFRS 18, and the amendments to the other
standards, is effective for reporting periods
beginning on or after 1 January 2027, but
earlier application is permitted and must be
disclosed. IFRS 18 will apply retrospectively.
The Group is currently working to identify all
impacts the amendments will have on the
primary financial statements and notes to
the financial statements.
IFRS 19 Subsidiaries without Public
Accountability: Disclosures
In May 2024, the IASB issued IFRS 19, which
allows eligible entities to elect to apply its
reduced disclosure requirements while still
applying the recognition, measurement and
presentation requirements in other IFRS
accounting standards. To be eligible, at the
end of the reporting period, an entity must
be a subsidiary as defined in IFRS 10, cannot
have public accountability and must have
a parent (ultimate or intermediate) that
prepares consolidated financial statements,
available for public use, which comply with
IFRS accounting standards.
IFRS 19 will become effective for reporting
periods beginning on or after 1 January
2027, with early application permitted.
As the Group’s equity instruments are
publicly traded, it is not eligible to elect to
apply IFRS 19.
IFRS IC Decision ‘Disclosure of Revenue
and Expenses for Reportable Segments’
In July 2024, the IASB approved the IFRS
Interpretations Committee’s (IFRS IC)
agenda decision ‘Disclosure of Revenue
and Expenses for Reportable Segments’
(hereinafter: the agenda decision).
The agenda decision considers the application of the disclosure requirements set out in paragraph 23 of IFRS 8 “Operating Segments” and
clarifies that disclosure is required for “material items of income and expense” if they are included in the measure of segment profit or loss
reviewed by the chief operating decision maker (CODM), even if they are not separately provided to or reviewed by the CODM. It also clarifies
that “material items of income and expense” are not limited only to unusual or non-recurring items.
In addition, the agenda decision clarifies that in determining the information to disclose for each reportable segment, an entity should apply
judgement and consider the entity’s specific facts and circumstances, the core principle of IFRS 8 and the principles of materiality and
aggregation in IAS 1“Presentation of Financial Statements”.
The Group applies the agenda decision retrospectively in these financial statements. As a result, the Group has added a disclosure regarding
operating expenses in the segment note, see Note 27.
Note 3 Intangible assets
Park Plaza®
Hotels &
Resorts
management
rights (a)1
£’000
Park Plaza®
Hotels &
Resorts
franchise
rights (a)2
£’000
art’otel®
franchise
rights (b)
£’000
Other
intangible
assets (c)
£’000
Total
£’000
Cost:
Balance as at 1 January 2024
20,805
21,268
3,777
4,501
50,351
Additions
–
–
–
271
271
Disposals
–
–
–
(125)
(125)
Adjustment for exchange rate differences
(943)
(964)
(171)
(211)
(2,289)
Balance as at 31 December 2024
19,862
20,304
3,606
4,436
48,208
Accumulated amortisation:
Balance as at 1 January 2024
17,139
17,571
2,374
2,602
39,686
Disposals
–
–
–
(85)
(85)
Amortisation
1,018
1,025
183
607
2,833
Adjustment for exchange rate differences
(794)
(814)
(111)
(139)
(1,858)
Balance as at 31 December 2024
17,363
17,782
2,446
2,985
40,576
Net book value as at 31 December 2024
2,499
2,522
1,160
1,451
7,632
Cost:
Balance as at 1 January 2023
21,195
21,667
3,849
3,859
50,570
Additions
–
–
–
771
771
Reclassification
–
–
–
(58)
(58)
Adjustment for exchange rate differences
(390)
(399)
(72)
(71)
(932)
Balance as at 31 December 2023
20,805
21,268
3,777
4,501
50,351
Accumulated amortisation:
Balance as at 1 January 2023
16,393
16,827
2,226
2,319
37,765
Amortisation
1,048
1,055
189
391
2,683
Reclassification
–
–
–
(58)
(58)
Adjustment for exchange rate differences
(302)
(311)
(41)
(50)
(704)
Balance as at 31 December 2023
17,139
17,571
2,374
2,602
39,686
Net book value as at 31 December 2023
3,666
3,697
1,403
1,899
10,665
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
PPHE Hotel Group
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Annual Report and Accounts 2024
Annual Report and Accounts 2024
172
173
Strategic Report
Corporate Governance
Financial Statements
Appendices
a.
Acquisition of Park Plaza® Hotels & Resorts management and franchise rights and lease rights
(1) Management rights – rights held by the Group relating to the management of Park Plaza® Hotels & Resorts in Europe, the Middle East and
Africa. The management rights are included in the consolidated financial statements at their fair value as at the date of acquisition and
are being amortised over a 20-year period based on the terms of the existing contracts and management estimation of their useful life.
The remaining amortisation period is 2.5 years.
(2) Franchise rights relating to the brand ‘Park Plaza® Hotels & Resorts’ are included in the consolidated financial statements at their fair
value as at the date of acquisition and are being amortised over a 20-year period based on management’s estimation of their useful life.
The remaining amortisation period is 2.5 years.
b.
Acquisition of art’otel® rights
In 2007, the Group acquired from CCS Capital Concept Services Gmbh (the ‘vendor’) the worldwide rights to use the art’otel® brand name for
an unlimited period of time. The rights are being amortised over a 20-year period based on management’s estimation of their useful life. The
remaining amortisation period is 2.5 years. In December 2020, the Group acquired certain rights which were assigned to the vendor under
the original agreement for a cash consideration of €0.3 million (£0.2 million) and 80,000 shares of the Company. The additional rights are
amortised based on management’s estimation of their useful life.
c.
Other intangible assets
These mainly include the brand name and internal domain obtained in the acquisition of Arena, which are being amortised over 20 years
based on management’s estimation of their useful life, and software which are amortised over 4 years.
d.
Amortisation
Amortisation of intangible assets is calculated using the straight-line method over the estimated useful life of the intangible assets.
e.
Impairment
In 2024, there were no indicators of impairment.
Note 4 Property, plant and equipment
Land
£’000
Hotel
buildings
£’000
Property &
assets under
construction
£’000
Income Units
sold to private
investors1
£’000
Furniture,
fixtures and
equipment
£’000
Total
£’000
Cost:
Balance as at 1 January 2024
358,345
810,680
232,887
128,148
233,373
1,763,433
Additions during the year
–
17,525
16,021
916
36,749
71,211
Disposal
(17)
(1,222)
(441)
–
(728)
(2,408)
Buy-back of Income Units sold to private investors
471
3,411
–
(4,266)
384
–
Reclassification2
–
156,808
(198,733)
–
42,039
114
Adjustment for exchange rate differences
(7,209)
(18,366)
(416)
–
(6,142)
(32,133)
Balance as at 31 December 2024
351,590
968,836
49,318
124,798
305,675
1,800,217
Accumulated depreciation and impairment:
Balance as at 1 January 2024
16,911
143,889
–
23,529
166,274
350,603
Provision for depreciation
312
18,263
–
1,266
16,735
36,576
Disposal
–
(1,212)
–
–
(713)
(1,925)
Reclassification
–
92
–
–
22
114
Buy-back of Income Units sold to private investors
–
513
–
(811)
298
–
Adjustment for exchange rate differences
(109)
(3,173)
–
–
(3,245)
(6,527)
Balance as at 31 December 2024
17,114
158,372
–
23,984
179,371
378,841
Net book value as at 31 December 2024
334,476
810,464
49,318
100,814
126,304
1,421,376
Cost:
Balance as at 1 January 2023
362,830
779,763
154,027
134,719
222,883
1,654,222
Additions during the year
–
23,289
91,209
1,276
9,800
125,574
Disposal
–
(423)
–
–
(399)
(822)
Buy-back of Income Units sold to private investors
873
6,316
–
(7,847)
658
–
Reclassification2
–
9,607
(11,992)
–
2,217
(168)
Adjustment for exchange rate differences
(5,358)
(7,872)
(357)
–
(1,786)
(15,373)
Balance as at 31 December 2023
358,345
810,680
232,887
128,148
233,373
1,763,433
Accumulated depreciation and impairment:
Balance as at 1 January 2023
17,099
125,289
–
23,765
152,885
319,038
Provision for depreciation
321
18,487
–
1,181
15,219
35,208
Disposal
–
(420)
–
–
(352)
(772)
Reclassification
–
915
–
–
(1,083)
(168)
Buy-back of Income Units sold to private investors
–
878
–
(1,417)
539
–
Adjustment for exchange rate differences
(509)
(1,260)
–
–
(934)
(2,703)
Balance as at 31 December 2023
16,911
143,889
–
23,529
166,274
350,603
Net book value as at 31 December 2023
341,434
666,791
232,887
104,619
67,099
1,412,830
1 This includes 443 rooms (2023: 459) in Park Plaza London Westminster Bridge, for which the cash flows, derived from the net income generated by these Income Units, were
sold to private investors (see Note 2(e)). The proceeds from the purchases have been accounted for as a variable rate financial liability (see Note 15).
2 In 2024, the reclassification mainly relates to the completion of the construction of art’otel London Hoxton. In 2023, the reclassification mainly relates to the completion of
the construction of art’otel Zagreb and the refurbishment of Park Plaza Budapest.
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
PPHE Hotel Group
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Annual Report and Accounts 2024
Annual Report and Accounts 2024
174
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Strategic Report
Corporate Governance
Financial Statements
Appendices
a.
For information regarding liens, see Note 12
b.
Impairment
In 2024, the Group faced a volatile real estate environment impacting its property operations. The recoverable amount of property, plant and
equipment had been determined based on third party valuations received for 31 December 2024. The third party valuers based their cash
flow forecast from operations on management and market expectation. The discount rates applied to cash flow projections was determined
by the third party valuator and ranges between 7.75%–11%. The recoverable amounts of property, plant and equipment exceeded the
carrying amounts, and no impairment loss was recorded for the year ended 31 December 2024.
c.
Capitalised borrowing costs
On 7 April 2020, the Group entered into a building contract to develop art’otel London Hoxton on a site located by Old Street, Rivington Street,
Great Eastern Street and Bath Place, London EC1, which was partially opened in April 2024 (see Note 28(c)(i)). The cumulative expenditure for
this project as at 31 December 2024 was £235.8 million (2023: £199.8 million). The amount of borrowing costs capitalised related to this project
during the year ended 31 December 2024 was £6.1 million (2023: £8.1 million). The rate used to determine the amount of borrowing costs
eligible for capitalisation was 5.2%, which is the effective interest rate of the specific borrowing.
Additional borrowing costs were capitalised as part of the refurbishment of the property in Rome, Italy, which is expected to reopen in Q1
2025. The amount of borrowing costs capitalised related to this project during the year ended 31 December 2024 was €1 million (£0.9 million)
(2023: €0.9 million (£0.8 million)). The rate used to determine the amount of borrowing costs eligible for capitalisation was 4.0%, which is the
effective interest rate of the specific borrowing.
Note 5 Investment in joint ventures and subsidiaries with significant non-controlling interests
a.
Investment in joint ventures
The Group holds, through its subsidiary Arena Hospitality Group d.d., 50% interest in ABM Hotel Holding B.V., art’otel Berlin Mitte/Park Plaza
betriebsgesellschaft mbH, PPBK Hotel Holding B.V. and Park Plaza betriebsgesellschaft mbH (the ‘ABM and PPBK JV’). The ABM and PPBK JV
own and operate the Raddison RED Berlin Kudamm and the art’otel Berlin Mitte hotels in Germany. The Group’s interest in the ABM and PPBK
JV is accounted for using the equity method in the consolidated financial statements.
As at 31 December
2024
£’000
2023
£’000
Loans to joint ventures1
9,535
6,515
Share of net assets under equity method
(1,302)
(1,077)
Investment in joint ventures
8,233
5,438
1 The loans to joint ventures amount includes a euro loan bearing an interest of Euribor +2.5% per annum.
The share in net loss amounts to £268 thousand (2023: net loss of £113 thousand).
b.
Summarised financial information of subsidiary with material non-controlling interests
(i)
Signature Top Ltd
Long-term partnership for 49% of Park Plaza London Riverbank and art’otel London Hoxton development project
On 23 June 2021, a wholly owned subsidiary of PPHE Hotel Group entered into a sale and purchase agreement with Clal Insurance (‘Clal’), one
of Israel’s leading insurance and long-term savings companies. As part of this agreement, Clal became a non-controlling interest partner and
owner of 49% of the shares of Signature Top Ltd, a wholly owned subsidiary of the Group (‘Signature Top’) which indirectly holds the real
estate and operations of both the 646-room Park Plaza London Riverbank (‘Riverbank’) and the 357-room art’otel London Hoxton hotel
(‘Hoxton’), which was opened in 2024.
As part of this agreement, Clal was granted five million share appreciation rights (SAR) of the Company which has a seven-year maturity with
a strike price of £16 per share and a cap of £21 per share. The SAR will vest as follows:
• 500,000 SAR Units shall vest and become exercisable on the first anniversary of the completion of the sale and purchase agreement
(‘Completion’)
• 500,000 SAR Units shall vest and become exercisable on the date being 18 months after Completion
• The remaining four million SAR Units shall vest and become exercisable on the second anniversary of Completion
Upon exercise, the Company will have a right to determine whether an amount equal to the SAR Value as of the date of the exercise will be
satisfied by a payment of cash or by the issuance of the Company’s shares.
The SAR instrument, which is included in Level 3 in the fair value hierarchy, was valued internally at an amount of £3.5 million (2023: £2.7 million)
using the Black–Scholes model and is included in current liabilities under Other payables and accruals in the Group’s consolidated balance
sheet. The following lists the inputs used for the fair value measurement:
Dividend yield
3.252%
Expected volatility of the share price
24.95%
Risk-free interest rate
4.695%
Years to expiration
3.5 years
During the reporting period, the expected construction costs of art’otel London Hoxton have increased, mainly due to the interest to be
incurred throughout the construction phase. On 27 April 2023, both the Group and Clal mutually agreed that the sharing of the cost referred
to above, with a cap of £25.7 million, which is the expected amount of the overruns, would be funded by 65% from the Group and 35% from Clal.
In 2024 and in 2023, the parties contributed £9.7 million and £16.0 million respectively. The excess consideration of £1.4 million in 2024 and
£2.2 million in 2023 paid by the Group was recognised as a reduction in the equity of the parent company. The Group has chosen to recognise
this amount in accumulated earnings.
As at 31 December 2024, the Group owned 51% (2023: 51%) of Signature Top Ltd. The amount of accumulated non-controlling interests
as at 31 December 2024 amounts to £103,616 thousand (2023: £98,518 thousand) and the income and comprehensive income allocated
to the non-controlling interests in 2024 amounts to a loss of £2,058 thousand (2023: £3,449 thousand) and £338 thousand (2023: £1,281
thousand) respectively.
Below is selected financial information relating to the long-term partnership with Clal, as at 31 December 2024 and 2023, and for the years
ended 31 December 2024 and 31 December 2023.
2024
£’000
2023
£’000
Non-current assets
493,221
456,094
Current assets
31,259
26,577
Non-current liabilities
285,495
260,928
Current liabilities
27,525
20,686
Revenue
58,969
46,273
EBITDA
13,353
14,862
(Loss) profit for the year
(4,201)
7,040
Total comprehensive income
689
2,614
(ii) Arena Hospitality Group d.d.
As at 31 December 2024, the Group owned approximately 54.9% (2023: 53.8%) of Arena Hospitality Group d.d. (‘Arena’). During 2024, the
Company purchased 33,363 shares of Arena for a consideration of €1.1 million (£0.9 million) and Arena purchased 66,114 of its own shares
for a consideration of €2.2 million (£1.8 million). During 2024, Arena reissued a total of 22,515 out of treasury shares to employees who
exercised options. The difference between the adjustment of the non-controlling interests and the net consideration paid of approximately
€0.4 million (£0.3 million) was recorded in retained earnings. As a result of those transactions, the Group’s share in Arena increased to 54.9%.
The amount of accumulated non-controlling interests as at 31 December 2024 amounts to £89,249 thousand (2023: £95,496 thousand) and
the income and comprehensive income allocated to the non-controlling interests in 2024 amounts to a profit of £2,468 thousand (2023: £1,775
thousand) and loss of £1,805 thousand (2023: loss of £495 thousand) respectively.
In 2024 Arena paid a dividend of €3.8 million to its shareholders (2023: €3.5 million).
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
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Appendices
Below is selected financial information relating to Arena, as of 31 December 2024 and 2023, and for the years ended 31 December 2024
and 2023.
As at 31 December
2024
£’000
2023
£’000
Non-current assets
354,705
382,010
Current assets
37,297
49,645
Non-current liabilities
156,797
180,281
Current liabilities
37,266
44,787
Revenue
120,109
109,927
EBITDA
29,574
24,371
Profit for the year
5,538
3,776
Total comprehensive loss
(3,808)
(1,093)
(iii) European Hospitality Real Estate Fund
In March 2023, the Group launched a new European Hospitality Real Estate Fund (the ‘Fund’) with a target size of up to €250 million. Clal
Insurance (‘CLAL’), one of Israel’s leading insurance and long-term savings companies, participated as a cornerstone investor, committing up
to €75 million (limited to 49% of total participation). The Group also committed to invest up to €50 million in the Fund. As part of the agreement
signed with Clal, it was decided to incorporate the Fund under Signature Top II Ltd (‘Signature Top II’), a UK incorporated company, with a 51%
ownership by the Group and 49% by Clal, until additional investors join. At the inception of the Fund, PPHE contributed the shares of Società
Immobiliare Alessandro De Gasperis S.r.l., the owner of the Londra & Cargill Hotel in Rome, Italy (‘Londra’), valued at €29.3 million (£25.8 million),
for its 51% participation in Signature Top II. Clal made an initial cash contribution of €28.1 million (£24.8 million), payable at the Group’s request,
for its 49% participation. In 2023, Clal transferred €20 million out of the €28.1 million and the additional €8.1 million was transferred in 2024.
The Group has assessed the transaction and determined that it exercises control over Signature Top II. Consequently, the change in the
ownership interest of Londra does not trigger a change of control and is therefore accounted for as an equity transaction in accordance
with IFRS 10 Consolidated Financial Statements. The excess of consideration received over the carrying amount of the non-controlling
interests (net of £0.8 million in transaction costs) amounting to £0.4 million is recognised in the parent company’s equity. The Group has
chosen to recognise this amount in accumulated earnings. Additionally, £0.7 million was reclassified from the foreign currency translation
reserve and hedging reserve to accumulated earnings.
PPHE was focussed on sourcing additional opportunities throughout the year. Under the terms of the investment agreement, the investment
period is due to end on 12 April 2025 but may be extended for a further year with shareholder consent.
As at 31 December 2024, the Group owned 51% (2023: 51%) of Signature Top II. The amount of accumulated non-controlling interests as at
31 December 2024 amounts to £20,500 thousand (2023: £22,578 thousand) and the loss and comprehensive loss allocated to the non-
controlling interests in 2024 amounts to £884 thousand (2023: £495 thousand) and £2,069 thousand (2023: £923 thousand) respectively.
Note 6 Other non-current assets
As at 31 December
2024
£’000
2023
£’000
Income Units in Park Plaza County Hall London1
18,150
17,700
Rent security deposits
346
363
Derivative financial instruments (see Note 29(a))
28,398
21,300
Other non-current assets
99
283
46,993
39,646
1 On 14 July 2017, the Group acquired an ownership interest in Park Plaza County Hall London through its purchase of 44 aparthotel units and the associated shares in the
management company of the hotel, South Bank Hotel Management Company Limited. The purchase price was £16.0 million. In October 2017, an additional two units were
purchased for £0.7 million. Upon initial recognition, the investment was designated in the consolidated financial statements at fair value through profit and loss. In return
for the consideration paid, the Company receives 999 years of net income from specific revenue-generating units of the hotel (contractual right to a stream of future cash
flows). This investment is managed and its performance is evaluated by the Group management on a fair value basis in accordance with the Group investment strategy. As
the cash flows from this investment are not solely payments of principal and interest, under IFRS 9 the investment is classified and measured at fair value through profit or
loss. The fair value of the Income Units as of the reporting date was £18.2 million based on an independent valuation prepared by Savills using a discount rate of 10% and a
cap rate of 7.5%.
Note 7 Trade receivables
a.
Composition:
As at 31 December
2024
£’000
2023
£’000
Trade receivables
19,270
18,417
Less – loss allowance
(558)
(537)
18,712
17,880
Trade receivables are non-interest bearing. The Group’s policy provides an average of 30 days’ payment terms.
b.
Movements in the allowance for expected credit losses of trade receivables were as follows:
2024
£’000
As at 1 January 2024
(537)
Write-off
115
Additions
(157)
Exchange rate differences
21
As at 31 December 2024
(558)
As at 1 January 2023
(681)
Write-off
261
Additions
(124)
Exchange rate differences
7
As at 31 December 2023
(537)
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
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c.
As at 31 December, the ageing analysis of trade receivables is as follows:
Past due
2024
Total
£’000
Not
past due
£’000
< 30 days
£’000
31 to
60 days
£’000
61 to
90 days
£’000
> 90 days
£’000
Trade receivables
19,270
6,467
9,816
1,130
683
1,174
Loss allowance
(558)
(558)
18,712
6,467
9,816
1,130
683
616
Past due
2023
Total
£’000
Not
past due
£’000
< 30 days
£’000
31 to
60 days £’000
61 to
90 days
£’000
> 90 days
£’000
Trade receivables
18,417
9,788
7,082
697
148
702
Loss allowance
(537)
(537)
17,880
9,788
7,082
697
148
165
Note 8 Other receivables and prepayments
As at 31 December
2024
£’000
2023
£’000
Prepaid expenses
10,403
8,066
VAT
6,239
5,930
Current tax receivable
109
190
Related parties
74
65
Funds to be received from Clal (see Note 5 (iii))
–
7,044
Derivative financial instruments short term
–
1,677
Others
858
288
17,683
23,260
Note 9 Cash and cash equivalents
As at 31 December
2024
£’000
2023
£’000
Cash at banks and on hand
78,244
117,374
Money market funds
34,981
33,042
113,225
150,416
Cash at banks earns interest at floating rates based on daily bank deposit rates. In addition, the Group invests in money market funds that
invests in highly liquid financial instruments such as treasury bills, commercial papers, and certificates of deposit and are available for
immediate drawdown depending on the immediate cash requirements of the Group. Money market funds are measured at fair value and the
gains are recorded in the income statement under Financial income.
Note 10 Equity
a.
Share capital
The authorised share capital of the
Company is represented by an unlimited
number of ordinary shares with no
par value.
As at 31 December 2024, the number of
ordinary shares issued and fully paid was
44,347,410 (2023: 44,347,410), 2,558,086
of which were held as treasury shares
(2023: 1,984,110).
The Company’s shares are admitted to the
Premium Listing segment of the Official List
of the UK Listing Authority and to trading on
the Main Market for listed securities of the
London Stock Exchange.
b.
Treasury shares
During 2024, the Company issued 42,990
of its ordinary shares from its treasury
account for nil consideration in order to
satisfy an exercise of options. As a result,
the cost of the treasury shares (£219
thousand) was charged to the share
premium account.
In March 2024, the Company completed
a purchase of 300,000 shares for a total
consideration of £3.8 million, representing
an average price of 1,281 pence per share.
In addition, the Company’s Board of
Directors approved the commencement of
a share buy-back programme, to buy up to
a maximum of 400,000 ordinary shares for
an aggregate consideration (excluding
expenses) of up to a maximum of £4 million.
Under this programme the Company
purchased 316,966 ordinary shares for a
total consideration of £4 million, representing
an average price of 1,257 pence per share.
On 28 June 2022, the Company’s Board of
Directors approved the commencement of
a share buy-back programme to buy up to
a maximum of 300,000 ordinary shares for
an aggregate consideration (excluding
expenses) of up to a maximum of £1.7 million.
On 18 November 2022, this share buy-back
programme was further extended to buy up
to a maximum of 500,000 ordinary shares
for an aggregate consideration (excluding
expenses) of up to a maximum of £3.7 million.
In 2022 and 2023, the Company completed a
purchase of 295,707 shares under this
programme for a total consideration of
£3.7 million, representing an average price
of 1,257 pence per share.
The total number of treasury shares as at
31 December 2024 is 2,558,086
(2023: 1,984,110).
c.
Nature and purpose of reserves
Foreign currency translation reserve
The foreign currency translation reserve
is used to record exchange differences
arising from the translation of the financial
statements of foreign operations.
Hedging reserve
This reserve comprises the gain or loss on
a hedging instrument in a cash flow hedge
that is determined to be an effective hedge.
Note 11 Share-based payments
The Company operates two option plans for
the benefits of employees of the Group: the
first was adopted in 2007 and the second
was adopted in 2020.
2007 Option Plan
The 2007 Plan has two types of options:
Option A and Option B. The exercise price
of both options will not be less than the
closing price of a share on the dealing day
immediately preceding the grant date (as
published in the Daily Official List of the
London Stock Exchange). Option A vests
over a period of three years from the grant
date and Option B vests at the end of three
years from the grant date. Unexercised
options expire ten years after the grant
date. The plan does not include any
performance conditions.
As at 31 December 2024, there were 37,500
exercisable options outstanding under the
2007 Option Plan. These options were
granted to employees of the Company in
past years. No further grants can be made
under this plan.
2020 PPHE Executive Share Option Plan
The Board has adopted a ‘2020 PPHE
Executive Share Option Plan’, under
which employees of the Company and its
subsidiaries receive remuneration in the
form of share-based compensation. The
plan has the following principal terms:
The plan has four types of options:
• Option A: market value options – options
that are linked to the market value of the
shares in the Company.
• Option B: salary related options –
whereby employees agree to a reduction
in their base salary in exchange for the
right to acquire shares at nil-cost. These
options normally vest after 12 months
subject to an additional six-month
holding period.
• Option C: deferred bonus awards –
allowing the award of the number of
shares determined by the Remuneration
Committee in lieu of some or all of the
annual bonus.
• Option D: performance share awards –
options which are granted subject to
specified performance targets.
Notwithstanding the extent to which any
performance target is satisfied, the
number of vested award shares may be
reduced by the Committee to ensure that
the number of vested award shares is
appropriate taking into account the
underlying business performance of
the Group.
• Option E: Restricted Stock Award-
Contingent Share Award or Nil-Cost
Option Award.
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
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These awards are subject to the rules of the PPHE Executive Incentive Plan 2020, which may include: long-term vesting periods prescribed
by the Committee upon grant; good-leaver and bad-leaver provisions allowing the Committee to exercise discretion as to when it might
be appropriate for an award to vest in spite of the relevant employee leaving the Group; post vesting holding periods determined by the
Committee at the time of the award; performance conditions; and share capital dilution limits. The plan allows dividends or dividend
equivalents to accrue, subject to the Committee’s discretion.
At any time, the total number of shares issued and/or available for grant (in a ten-year period) under the 2007 Share Option Plan, the 2020
PPHE Executive Incentive Plan and under any other employee share scheme which the Company may establish in the future may not exceed
5% of the Company’s issued share capital at that time.
2022 Long-Term Incentive Plan
In June 2022, the Remuneration Committee approved a Long-Term Incentive Plan (‘LTIP’) conditional grant of 93,000 options with a nil
exercise price (Option D under the 2020 Option Plan). The grant was subject to performance conditions determined by the Remuneration
Committee in accordance with the 2020 Option Plan rules and the Company’s Remuneration Policy, and had a vesting period of 36 months
starting 1 January 2022 with a 24-month holding period. After the balance sheet date, The Remuneration committee recognised that LTIP)
performance target in relation to the Total Shareholder Return (TSR), which equites to 50% of the awards (46,500 options), was not met during
the performance period. However, after thorough consideration of the broader context, including macroeconomic challenges such as rising
interest rates, inflationary pressures, and a volatile real estate environment, in 2025 the Committee concluded that it is appropriate to
exercise discretion and grant the full LTIP allocation.
Grants in the period
In March 2024, a Restricted Stock Award grant had been approved of 207,500 options with a nil exercise price (Option E under the 2020 Option Plan).
This grant was given in part in exchange of forfeiting 190,000 fully vested options with an exercise price of £13 that were granted to employees in
2020. The grant has a vesting period of 36 months starting 1 March 2024 with no holding period. In line with IFRS 2, the fair value of this grant was
determined based on the difference between the fair value of the options that were granted and the fair value of the options that were forfeited.
The following lists the inputs to the binomial model used for the fair value measurement of the 207,500 options granted:
Strike price (exercise price)
Nil
Dividend yield
2.8%
Expected volatility of the share prices
41.4%
Risk-free interest rate
3.9051%
Expected life of share options
5 years
Weighted average share price at the grant date
1,295.0 pence
Fair value per option
1,193.0 pence
The following lists the inputs to the binomial model used for the fair value measurement of the 190,000 forfeited options:
Strike price (exercise price)
1,300.0 pence
Dividend yield
2.8%
Expected volatility of the share prices
41.4%
Risk-free interest rate
3.9051%
Expected life of share options
4 years
Weighted average share price at the grant date
1,295.0 pence
Fair value per option
393.0 pence
Furthermore, in 2024, the Remuneration Committee approved a three year annual bonus plan to the Leadership Team, including a deferred
bonus awards of a total of 153,000 options with a nil exercise price (Option C under the 2020 Option Plan), which will be granted subject to
performance conditions for each of 2024, 2025, 2026. Employees were offered to participate in the annual bonus plan in part in exchange of
forfeiting 153,000 fully vested options with an exercise price of £14.3 that were granted in 2018. The performance conditions will be examined
in respect of each financial year of 2024, 2025, 2026. The performance conditions for 2024 had been fulfilled. In line with IFRS 2, the fair value
of this grant was determined based on the difference between the fair value of the options that were granted and the fair value of the options
that were forfeited.
The following lists the inputs to the binomial model used for the fair value measurement of the 153,000 options granted:
Strike price (exercise price)
Nil
Dividend yield
2.8%
Expected volatility of the share prices
41.4%
Risk-free interest rate
3.9051%
Expected life of share options
5 years
Weighted average share price at the grant date
1,295.0 pence
Fair value per option
1,226.0 pence
The following lists the inputs to the binomial model used for the fair value measurement of the 153,000 forfeited options:
Strike price (exercise price)
1,430.0 pence
Dividend yield
2.8%
Expected volatility of the share prices
41.4%
Risk-free interest rate
3.9051%
Expected life of share options
2 years
Weighted average share price at the grant date
1,295.0 pence
Fair value per option
249.0 pence
The expected life of the share options is based on historical data, current expectations and empirical data. It is not necessarily indicative of
exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility of the Company’s share price
over a period similar to the life of the options is indicative of future trends, which may not be reflective of the actual outcome.
d. The expense arising from equity-settled share-based payment transactions during 2024 was £1,389 thousand (2023: £442 thousand).
Total exercisable options under the 2020 option plan at 31 December 2024 were 97,998 (2023: 343,721).
Movements during the year
The following table illustrates the number (No.) and weighted average exercise prices (EP) of, and movements in, share options during 2023
and 2024:
No. of
options A
(2007
Option Plan)
No. of
options A
(2020
Option Plan)
No. of
options B
(2020
Option Plan)
No. of
options C
(2020
Option Plan)
No. of
options D
(2020
Option Plan)
No. of
options E
(2020
Option Plan)
EP
Outstanding as at 1 January 2024
190,500
227,000
46,721
70,000
93,000
–
£9.05
Options forfeited during the year
(153,000)
(190,000)
–
–
–
(6,750)
£13.3
Options exercised in the year1
–
–
(8,723)
(47,000)
–
–
nil
Options granted during the year
–
–
–
153,000
–
207,500
nil
Outstanding as at 31 December 2024
37,500
37,000
37,998
176,000
93,000
200,750
£1.75
Outstanding as at 1 January 2023
220,500
227,000
51,223
99,000
93,000
–
£8.32
Options forfeited during the year
–
–
–
–
–
–
–
Options exercised in the year1
(30,000)
–
(4,502)
(29,000)
–
–
£1.10
Options granted during the year
–
–
–
–
–
–
–
Outstanding as at 31 December 2023
190,500
227,000
46,721
70,000
93,000
–
£9.05
1 Out of the options exercised in the year 33,502 were cashless.
As at 31 December 2024, the number of exercisable options was 135,498 (2023: 534,221) with an EP of £7.5 (2023: £10.62).
The weighted average remaining contractual life for the share options outstanding as at 31 December 2024 is 7.9 years (2023: 6.5 years).
The range of exercise prices for options outstanding at the end of the year was nil to £14.3 (2023: nil to £14.3).
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
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Appendices
Note 12 Pledges, contingent liabilities and commitments
a.
Pledges, collateral and securities
Substantially all of the Group’s assets and all of the rights connected or related to the ownership of the assets (including shares of subsidiaries
and restricted deposits) are pledged in favour of banks and financial institutions as security for loans received. For most of the loans, specific
assets are pledged as the sole security provided.
b.
Restricted cash
Under certain facility agreements, funds need to be held in restricted deposit accounts in order to pay the debt service for a subsequent
period. The total deposits held amount to £22.4 million and are presented as restricted in the financial statements.
c.
Commitments
(i)
Management and franchise agreements
1.
The Group entered into a Territorial Licence Agreement (the ‘Master Agreement’) with Radisson Hotel Group (‘Radisson’). Under the
Master Agreement, the Group, among other rights, is granted an exclusive licence to use the brand ‘Park Plaza® Hotels & Resorts’ in 56
territories throughout Europe, the Middle East and Africa in perpetuity (the ‘Territory’).
The Master Agreement also allows the Group to use, and license others to use, the Radisson systems within the Territory, which right
includes the right to utilise the Radisson systems’ international marketing and reservations facilities and to receive other promotional
assistance. The Group pays Radisson a fee based on a percentage of the hotels’ gross room revenue, which fees are recognized in the
income statement as incurred.
2.
Within the terms of the management agreements, the hotels were granted by the Group a licence allowing them to use, throughout the
term of the management agreements, the ‘Park Plaza® Hotels & Resorts’ and ‘art’otel®’ brand names. See Note 2(h) regarding the
accounting for management and franchise fees received.
(ii) Construction contract commitment
As at 31 December 2024, the Group had capital commitments amounting to £7 million for the construction of the development of art’otel
London Hoxton and £5.7 million for the refurbishment of Londra & Cargill Hotel in Rome, Italy.
(iii) Guarantees
1.
The Company guarantees cost overruns and the practical completion of the art’otel London Hoxton development under the £180 million
construction financing facility agreement granted by Bank Hapoalim B.M and in relation to the long-term partnership with Clal. As of
31 December 2024, the Company does not expect to have additional cost overruns on top of what was already contributed in years 2023
and 2024 (see Note 5b(i)).
Note 13 Borrowings
The borrowings of the Group are composed as follows:
As at 31 December 2024
€
denominated
£’000
£
denominated
£’000
$
denominated
£’000
Total
£’000
Fixed interest rate
282,978
572,232
–
855,210
Weighted average interest rate
2.64%
4.09%
–
Variable interest rate
5,045
18,950
8,968
32,963
Weighted average interest rate
5.18%
4.61%
9.18%
Total
288,023
591,182
8,968
888,173
Weighted average interest rate
2.69%
4.11%
9.18%
3.70%
Maturity analysis 2024
Outstanding
amount
Year 1
Year 2
Year 3
Year 4
Year 5
Thereafter
Total borrowings
888,173
81,514
222,108
51,541
187,621
8,944
336,445
Capitalised transaction costs and other
adjustments
(2,529)
(927)
(724)
(442)
(244)
(34)
(158)
For securities and pledges, see Note 12.
As at 31 December 2023
€
denominated
£’000
£
denominated
£’000
$
denominated
£’000
Total
£’000
Fixed interest rate
318,272
558,192
–
876,464
Weighted average interest rate
2.32%
4.01%
–
Variable interest rate
4,346
3,783
11,797
19,926
Weighted average interest rate
7.01%
6.94%
8.91%
Total
322,618
561,975
11,797
896,390
Weighted average interest rate
2.38%
4.03%
8.91%
3.50%
Maturity analysis 2023
Outstanding
amount
Year 1
Year 2
Year 3
Year 4
Year 5
Thereafter
Total borrowings
896,390
48,681
62,178
363,289
61,223
181,228
179,791
Capitalised transaction costs and other
adjustments
(3,354)
(844)
(844)
(844)
(822)
–
–
For securities and pledges, see Note 12.
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
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Appendices
a.
Finance agreements entered in the years 2024
and 2023:
Aareal Dutch tranche refinance
On 4 September 2024, the Group entered into
an agreement to refinance its existing loan
with Aareal Bank AG (‘Aareal’) in relation to all
six of its Dutch hotels (art’otel Amsterdam,
Park Plaza Victoria Amsterdam, Park Plaza
Vondelpark, Amsterdam, Park Plaza
Amsterdam Airport, Park Plaza Eindhoven,
and Park Plaza Utrecht) (the ‘Dutch Hotels’)
and Holmes Hotel London (‘Holmes’). This
refinancing extends the existing 2016 facility
with Aareal relating to these hotels (the
‘Existing Facility’) from its original maturity
date of June 2026 with a new maturity date
in June 2031.
Under the new terms, the facility will
comprise two tranches, a €160 million
tranche (the ‘EUR Tranche’) and a £16 million
tranche (the ‘GBP Tranche’) instead of the
outstanding amounts of €156.5 million and
£15.4 million. The EUR Tranche will bear an
effective interest rate of 4.05% which is
comprised of all-in fixed interest rate of
2.765% until June 2026, following which, an
all-in fixed interest rate of 4.49% will apply
until maturity. The GBP Tranche will bear
an effective interest rate of 5.67% which
comprise of all-in fixed interest rate of
3.9% until June 2026, following which a
competitive floating interest rate will apply.
This compares with an all in fixed interest
rate of 2.165% in respect of the EUR loan and
a fixed interest rate of 3.3% in respect of the
GBP loan that applied under the terms of the
old Facility.
The refinance was accounted as an
extinguishment in line with IFRS9. The
difference between the old loan and new
loan (and the cash that was paid) was
recognized as a gain/loss from modification
(see note 23a).
Amendment of the W29 loan
On 13 September 2024, W29 Owner LLC,
a wholly owned subsidiary of the Company,
amended the loan agreement with Bank
Hapoalim New York. Under the amended
agreement, the maturity date was extended
from 13 September 2024 to 13 September
2028 where the outstanding loan amount of
$12 million will be amortised over the loan
term ($3 million per year). The loan will bear
an interest of SOFR+ 4%.
Park Plaza Hotels (UK) Limited facility
On 1 November 2023, Park Plaza Hotels (UK)
Limited, a wholly owned subsidiary of the
Company, entered into a revolving facility
agreement with Santander UK Plc for up to
£30 million which replaced the previous
Coronavirus Large Business Interruption
Loan Scheme (CLBILS) facility entered in
November 2020. The facility is provided on a
three-year term and bears an interest rate
margin on drawn amounts of 2.5% plus Sonia
during year one, with the margin increasing
to 3% in years two and three.
b.
The following financial covenants must be
complied with by the relevant Group companies:
• Under the UK Aareal facility, for Park
Plaza London Riverbank (the ‘borrower‘),
the borrower must ensure, on a
quarterly basis, that the aggregate
amount of the outstanding facility
(£97.9 million, as at 31 December 2024)
does not exceed 60% of the value of the
Riverbank hotel as set out in the most
recent valuation (loan-to-value). In
addition, the borrower must ensure that,
on each interest payment date, the Debt
Service Coverage Ratio (DSCR) is not less
than 115%.
• Under the Dutch Aareal facility, for all six
of the Group’s Dutch hotels and Grandis
(the ‘borrowers’), the borrowers must
ensure, on a quarterly basis, that the
aggregate amount of the outstanding
facilities (€160 million and £16 million) does
not exceed 60% of the value of the Dutch
hotels and Grandis as set out in the most
recent valuation (loan-to-value). In
addition, the borrowers must ensure
that, on each interest payment date, the
Debt Service Coverage Ratio (DSCR)
is not less than 140%.
• Under the AIG Asset Management
(Europe) Limited facility for Park Plaza
Westminster Bridge London, the
borrower must ensure, on a quarterly
basis, that the aggregate amount of the
outstanding facility (£175.4 million) does
not exceed 70% of the value of the hotel as
set out in the most recent valuation
(loan-to-value). In addition, the borrower
must ensure that, on each interest
payment date, the historical and
projected DSCR are not less than 140%.
The floating rate leg of this loan of
£2.9 million (as at 31 December 2024) has
an associated interest rate cap, hedging
the risk of the all-in rate exceeding 3.5%.
• Under the facility arranged by
Cornerstone Real Estate Advisers Europe
LLP, a member of the MAFF Mutual
Financial Group, for Park Plaza Victoria
London, the borrower must ensure that
the aggregate amount of the outstanding
facility (£87 million) does not exceed 75% of
the value of the hotel as set out in the
most recent valuation (loan-to-value). In
addition, the borrower must ensure that,
on each interest payment date, the
historical and projected DSCR are not less
than 180%.
• Under the Bank Hapoalim Loan for three
of the Group’s UK hotels and the 46 units
owned within Park Plaza County Hall
London, the borrowers must ensure that
the aggregate amount of the outstanding
loan (£36 million) does not exceed 65% of
the value of the properties and units
secured (loan-to-value).
• Under the Bank Hapoalim New York for
an amount of US$12 million, and with an
outstanding amount of $11.25 million,
PPHE Hotel Group must ensure that it
maintains an aggregate net worth of at
least US$33 million and have liquid assets
with a market value of at least
US$5 million.
• Under the Bank Hapoalim Loan relating to
art’otel London Hoxton, the borrower
must ensure that the aggregate amount of
the outstanding facility (£177.3 million) does
not exceed 75% of the value of the hotel as
set out in the most recent valuation. The
borrower must also ensure that the DSCR
is not less than 1.1 on each quarter test
date from 31 December 2025 to
30 September 2026 and 1.2 for the
following quarter test dates. Any breach of
the aforementioned covenants is subject
to an equity cure option. In addition, on
each test date, the total equity of PPHE
Hotel Group must not be less than: (i)
£150 million; and (ii) 20% of its asset value.
• Under the loan agreement granted by
Santander UK Plc to Park Plaza Hotels (UK)
Limited, with an outstanding amount of £0
(zero), the borrower must ensure that at
all times its tangible net worth exceeds
£300 million. In addition, the borrower
must: (i) ensure that the UK borrowings to
aggregate UK asset value does not at any
time exceed 60%; (ii) ensure that on each
test date, the UK interest cover ratio for
the borrower and its subsidiaries is
greater than 1.25; (iii) ensure that the
drawn amount under this facility to the
unencumbered market value of Park
Plaza London Waterloo (determined in
accordance with the most recent
valuation) does not at any time exceed
65%; and (iv) maintain minimum liquidity
of £3 million at all times.
• Under the £1.6 million loan granted by
Santander UK Plc to PPHE Living Limited
dated 29 January 2020, the interest
coverage ratio (ICR) for each 12-month
period must not be less than 125%. In
addition, the borrower must ensure that
the outstanding loan does not exceed 65%
of the value of the borrower’s freehold
property at Acton Lane (based on the
most recent valuation). After the balance
sheet date this loan was fully repaid.
• Under the UniCredit S.p.A. facility for
Società Immobiliare Alessandro De
Gasperis S.r.l. (the “borrower”), the
borrower must ensure throughout the
entire term of the loan that the
outstanding amount (€17.25 million) of the
loan does not exceed 55% of the value of
the property. Furthermore, 31 December
2025 (the ‘first test date‘), the borrower
undertakes to ensure that the ratio
between (i) the EBITDA of the borrower
relating to the 12 month period preceding
the relevant test date and (ii) the finance
costs for the same applicable period (ICR)
and the ratio between (i) the net operating
profit of the borrower generated in the
12 month period preceding each test date
and (ii) the principal amount of all facilities
outstanding under this facilities
agreement at that test date are higher
than 1.8 and 9% respectively for the first
test date and higher than 2.0 and 10%
respectively for each test date
thereafter. As at 31 December 2024, the
borrower was in breach of a non-financial
covenant in relation to the hotel opening
date and therefore this loan was classified
to borrowings under current liabilities. In
January 2025, the borrower received a
waiver for this breach of covenant and
the second tranche under this facility in
the amount of €7.7 million was fully drawn.
• Under the Deutsche Hypothekenbank AG
facility, for Park Plaza Nuremberg the
borrower must ensure throughout the
entire term of the loan that the
outstanding amount (€11.1 million) of the
loan does not exceed 65% of the value of
the property used as collateral and that
the DSCR is not less than 1.35.
• Under the Deutsche Hypothekenbank AG
facility for ACO Hotel Holding B.V. and ABK
Hotel Holding B.V., the borrower must
ensure throughout the entire term of
the loan that the outstanding amount
(€28.3 million) of the loan does not exceed
70% of the value of the properties used as
collateral and that the DSCR is not less
than 1.10.
• Under the Zagrebaka Banka d.d. joint
€32.0 million and HRK 205.0 million
facilities, with outstanding amounts of
€32 million and €9.4 million respectively,
the borrower, Arena Hospitality Group
d.d. must ensure that at year end,
based on audited stand alone financial
statements of the borrower, the DSCR is
equal to or greater than 120% during the
life of the loan and that the Net Debt/
EBITDA (‘net leverage ratio’) is equal to or
lower than 4.5 at year end 2021 and for
each succeeding calendar year during
the remaining life of the loan.
• Under the Zagrebaka Banka d.d.
€10.0 million and HRK 60.0 million facilities,
with outstanding amounts of €6.4 million
and €3.4 million respectively, the
borrower, Arena Hospitality Group d.d.
must ensure that at year end, based on
audited consolidated financial statements
of the borrower, the DSCR is equal to or
greater than 120% during the life of the
loan and that the net leverage ratio is
equal to or lower than 4.5 at year end
2021 and for each succeeding calendar
year during the remaining life of the loan.
Additionally, the borrower undertakes
to maintain the ratio between the net
financial debt increased by the exposure
under guarantees for bank borrowings
and EBITDA to the maximum of 6.0.
Moreover, under the HRK 60 million
facility, the amount of the loan cannot
exceed 70% of the value of the properties.
• Under the Erste Banka d.d. €2.5 million
facility, with an outstanding amount of
€1.5 million, the borrower, Arena
Hospitality Group d.d. has to comply with
the following covenants calculated based
on stand alone financial statements,
tested once a year using audited financial
statements for the preceding year: DSCR
1 is equal to or greater than 3.5. DSCR 2
is equal or greater than 1.2. The net
leverage ratio is equal to or lower than
4.5. Additionally, the borrower
undertakes to maintain the ratio between
the net financial debt increased by the
exposure under guarantees for bank
borrowings and EBITDA to the maximum
of 6.0 until the end of the loan repayment.
The equity ratio has to be at least 30%.
• Under the club deal with Erste Banka d.d.
and Zagrebačka Banka d.d signed in
December 2020 for the purpose of
financing the refurbishment of Hotel
Brioni Pula in the total amount of
€24.0 million, with an outstanding amount
of €20. 2million, the borrower, Arena
Hospitality Group d.d. has to comply with
the following covenants calculated based
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
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Corporate Governance
Financial Statements
Appendices
on stand alone financial statements,
tested once a year using audited financial
statements for the preceding year: DSCR
1 is equal to or greater than 3.5. DSCR 2
is equal or greater than 1.2. Net leverage
ratio is equal to or lower than 4.5.
Additionally, the borrower undertakes
to maintain the ratio between the net
financial debt increased by the exposure
under guarantees for bank borrowings
and EBITDA to the maximum of 6.0 until the
end of the loan repayment. The amount of
the loan cannot exceed 70% of the
property used as collateral.
• Under the OTP Banka d.d. loan signed in July
2020 for the purpose of financing the
purchase and subsequent refurbishment
of Guest House Hotel Riviera Pula in the total
amount of €10.0 million, with an outstanding
amount of €7.8 million, the borrower, Arena
Hospitality Group d.d. has to comply with
the following stand alone covenants, tested
once a year using audited financial
statements for the preceding year: net
leverage ratio is equal to or lower than 4.5.
The equity ratio has to be at least 55%. The
loan consists of two equal tranches in the
amount of €5.0 million each. The loan has a
deposit build up mechanism, subject to
certain conditions.
• Under the AIK Banka a.d. facility for the
purpose of financing the purchase of 88
Rooms Hotel in Belgrade, Serbia, in the
total amount of €4.2 million and with an
outstanding amount of €2.9 million, the
borrower (Arena 88 Rooms Holding d.o.o.)
has to ensure that the value of the
purchased asset is not lower by more
than 35% when compared with the value
of the asset as defined during 2020 by an
external reputable valuator.
• Under the Zagrebaka banka d.d. loan
signed in September 2021 as part of
HBOR’s programme for insurance of
liquidity portfolio for exporters related
with COVID-19 measurements in amount
€20 million (£16.8 million), with an
outstanding amount of €4.4 million, the
borrower, Arena Hospitality Group d.d.
must ensure that DSCR is equal or
greater than 3.5 and that the ratio
between financial debt and EBITDA is
lower than 4.5 starting at December 2023
and onwards. Additionally, the borrower
undertakes to maintain the ratio between
the net financial debt increased by the
exposure under guarantees and EBITDA
to the maximum of 6.0 at the end of 2023
and onwards. Covenants are calculated
based on audited annual stand alone
financial statements. Also, during the loan
period the borrower is not able without
bank confirmation to proceed with
payments of dividends or loans to
third parties.
• Under the Erste Group Bank AG loan
signed in November 2021, for the
purpose of financing the purchase of
hotel FRANZ Ferdinand Mountain Resort
in Nassfeld, Austria, in the total amount
€10.5 million, and with an outstanding
amount of €9.7 million, Arena Franz
Ferdinand GmbH as the borrower has to
comply with following stand alone hard
covenants: projected DSCR is equal or
greater than 1.15 at year end 2021 and
historical DSCR equal or greater than
1.15 from year end 2023 onwards. The
amount of the loan cannot exceed 75% of
the property used as collateral starting
year end 2021 to year end 2023. The
borrower also has to comply with the
following soft covenants: from year end
2024 onwards DSCR (projected and
historical) should be equal to or greater
than 1.35. The amount of the loan cannot
exceed 65% of the property used as
collateral at the year end 2024 until year
end 2026, and 60% from the year end
2026 and onwards.
• Under the Privredna banka d.d. loan
signed in November 2022 for the purpose
of refinancing investments done in Arena
Kazela Campsite in previous years, in the
total amount of €18.5 million, and with an
outstanding amount of €15.2 million, the
borrower, Arena Hospitality Group d.d.
has to comply with following covenants:
the DSCR is equal to or greater than
1.2 during the life of the loan based on
audited stand alone financial statements,
the net leverage ratio based on audited
stand alone financial statements is equal
to or lower than 4.5 from 2022 and for
each succeeding calendar year during
the remaining life of the loan. Additionally,
the borrower undertakes to maintain the
ratio between the net financial debt
increased by the exposure under
guarantees and EBITDA to the maximum
of 6.0 until the end of the loan repayment.
Moreover, the amount of the loan cannot
exceed 70% of the value of the properties
used as collateral.
• Under the HRVATSKA BANKA ZA OBNOVU
I RAZVITAK loan signed in May 2022 for the
purpose of financing the purchase of
mobile homes in Arena Stoja Campsite, in
the total amount of €2.9 million, and with
an outstanding amount of €1.8 million, the
borrower, Arena Hospitality Group d.d.
has to comply with the equity ratio being
at least 30% calculated based on stand
alone financial statements.
• Under the ERSTE&STEIERMÄRKISCHE
BANK d.d. loan signed in March 2022 by
Ulika d.o.o. as borrower for the purpose
of financing investment in the hotel in
Zagreb, in the amount of €12.6 million, and
with an outstanding amount of
€11.4 million, Arena as guarantor has to
comply with following covenants tested
once a year using audited stand alone
financial statements for the preceding
year: DSCR 1 is equal to or greater than
3.5. DSCR 2 is equal or greater than 1.2
throughout the life of the loan. Net
leverage ratio is equal to or lower than 4.5
at each year end during the remaining life
of the loan. Additionally, the guarantor
undertakes to maintain the ratio between
the net financial debt increased by the
exposure under guarantees for bank
borrowings and EBITDA to the maximum
of 6.0 until the end of the loan repayment.
The amount of the loan cannot exceed
100% of the property used as collateral.
The equity ratio has to be at least 30%.
Ulika d.o.o., as borrower, needs to
maintain a DSCR equal to or greater than
1.3 from 2026 onwards.
• Under the OTP Bank Nyrt loan signed
in October 2022 for the purpose of
refurbishment of Park Plaza Budapest,
in the amount of €2 million, and with an
outstanding amount of €1.6 million, the
borrower has to comply with the following
covenant: annual debt service coverage
ratio is equal to or greater than 1.2 during
the life of the loan.
Pursuant to bank loan agreements with
certain subsidiaries, these subsidiaries are
required to retain their cash balances for
use in their hotel operations and are
restricted from transferring the cash to
other entities in the Group without a prior
approval from the lenders.
As at 31 December 2024, other than the
mentioned above, the Group is in
compliance with all of its banking covenants.
Note 14 Provisions
Provision for concession fee on land
In accordance with the provisions of the
Tourist and Other Construction Land Not
Appraised During the Transition and
Privatisation Process Act from 2010 (the
‘TLA’), Arena submitted requests to the
Republic of Croatia and the relevant
municipality for the award of tourist land
concessions in relation to land areas in eight
campsites and three tourist resorts in
Croatia. The TLA failed to produce the
desired impact and to resolve the issues of
the ownership/use of the tourist land. This in
turn caused far reaching consequences in
the form of lack of investments into tourist
land, reduced international competitiveness
of Croatian tourism due to lack of
development and reduced income of the
state and local municipalities. The Croatian
government therefore adopted new
legislation to deal with, inter alia, the
so-called tourist land and proprietary
relationships between the owner of such
land and the owner of the facilities built
thereon. In May 2020, the new Non-
Appraised Construction Land Act (the
‘NCLA’) replaced the TLA and all initiated
requests based on the TLA were
suspended. Pursuant to the NCLA, the
ownership of the land underneath the
facilities in the campsites that were
assessed into the share capital of Arena is
now also legally recognised as ownership of
Arena, while the Republic of Croatia will be
the sole owner of the other land in the
camps. In respect to the tourist resorts,
the ownership of the land underneath
the facilities that have been assessed
into the share capital of Arena is now also
recognised as ownership of Arena, together
with the land surrounding such facilities
that make (together with the relevant
facilities) the technological and functional
unity. Tourist land in the tourist resorts
which was not assessed into the share
capital of Arena, and which serves the
standard usage of the resorts shall be
owned by a local municipality. In relation to
the land in campsites owned by the Republic
of Croatia and the land in tourist resorts
owned by the local municipalities, Arena will,
by operation of law, be deemed long-term
(50 years) lessee and will conclude the lease
agreement with the state/local municipalities
once the procedure envisaged by the NCLA
will be complete.
In February 2024, the Regulation on
determination of the leases for tourist land
on which the hotel and tourist resorts are
built, and the Regulation on determination of
the leases on parts of the camps owned by
the Republic of Croatia, were adopted by
the government.
Based on the Regulation on determination
of the leases on parts of the camps owned
by the Republic of Croatia, Arena received
invoices for 2024 along with invoices for
the period from May 2020 when the new
law was adopted.
As the respective proceedings concerning,
inter alia, the determination of maritime
area as well as borders of the campsites
and ownership of the land below buildings
in the campsites are still ongoing, the
government has charged Arena with rent
only for 50% of the area, while the other
50% will be charged after resolving all
open issues and respective proceedings
are finalised. Additionally, based on the
Regulation and the NCLA, Companies have
opportunities to cap the rent to 4% of the
total revenue of the individual campsite,
what would be applied in all Arena’s
campsites. Since calculation of the expense
based on the cap has an element of variable
payments according to IFRS 16, this standard
was not applied, and lease expenses are still
presented in the income statement as
operating expense.
As the status of the land around hotels and
self-catering apartment complexes is still
not finally resolved, Arena continued with
the previously defined concept of accruing
rent expense, which should be adequate to
cover total expected liabilities.
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
PPHE Hotel Group
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Annual Report and Accounts 2024
Annual Report and Accounts 2024
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Corporate Governance
Financial Statements
Appendices
Management is still assessing the impact of this new regulation on the Company’s financial statements.
2024
£’000
2023
£’000
Balance as at 1 January
5,233
5,331
Exchange rate differences
(238)
(98)
Balance as at 31 December
4,995
5,233
Note 15 Financial liability in respect of Income Units sold to private investors
2024
£’000
2023
£’000
Total liability
129,866
132,995
Due from investors for reimbursement of capital expenditure
(19,301)
(18,708)
110,565
114,287
This liability originated from the proceeds received from the sale to private investors of the future 999-year cash flows, derived from
certain Income Units in Park Plaza London Westminster Bridge. Furthermore, as the investors are required to fund all CAPEX to be made in
connection with these rooms, a receivable is recorded in each period for any excess of depreciation expense over the amounts paid by the
investors on account of CAPEX. This receivable is offset from the liability to the investors.
This liability is amortised over the term of the agreement, that being 999 years (see note 2e).
Note 16 Other financial liabilities
As at 31 December
2024
£’000
2023
£’000
Lease liabilities (see Note 17)
275,224
273,274
Retention liability
808
4,536
Other
1,846
2,390
277,878
280,200
Note 17 Leases
Group as a lessee
The Group has lease contracts for various items which mainly includes hotels, including land, offices and storage buildings. Leases of land
have lease terms between 125 and 199 years while hotel buildings, offices and storage have lease terms between 2 and 95 years. The Group’s
obligations under its leases are secured by the lessor’s title to the leased assets.
The Group also has certain leases with lease terms of 12 months or less and leases with low value. The Group applies the ‘short-term lease’
and ‘lease of low-value assets’ recognition exemptions for these leases.
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
Land
£’000
Hotel
buildings
£’000
Offices and
other
£’000
Furniture,
fixtures and
equipment
£’000
Total
£’000
Cost:
Balance as at 1 January 2024
108,896
135,195
9,170
24,038
277,299
Additions during the year
–
100
1,196
–
1,296
Disposal
–
–
(45)
–
(45)
Re-measurement of right-of-use assets
1,764
2,878
–
–
4,642
Reclassification
85
–
–
–
85
Adjustment for exchange rate differences
(34)
(3,101)
(52)
(7)
(3,194)
Balance as at 31 December 2024
110,711
135,072
10,269
24,031
280,083
Accumulated depreciation and impairment:
Balance as at 1 January 2024
6,563
19,576
4,471
17,474
48,084
Provision for depreciation
687
3,600
905
2,482
7,674
Adjustment for exchange rate differences
(14)
(894)
(32)
–
(940)
Balance as at 31 December 2024
7,236
22,282
5,344
19,956
54,818
Net book value as at 31 December 2024
103,475
112,790
4,925
4,075
225,265
Cost:
Balance as at 1 January 2023
102,684
130,648
9,248
23,873
266,453
Additions during the year
–
185
–
165
350
Disposal
–
–
(58)
–
(58)
Re-measurement of right-of-use assets
6,626
4,375
–
–
11,001
Adjustment for exchange rate differences
(414)
(13)
(20)
–
(447)
Balance as at 31 December 2023
108,896
135,195
9,170
24,038
277,299
Accumulated depreciation and impairment:
Balance as at 1 January 2023
5,897
16,434
3,643
15,036
41,010
Provision for depreciation
669
3,212
858
2,438
7,177
Disposal
–
–
(19)
–
(19)
Adjustment for exchange rate differences
(3)
(70)
(11)
–
(84)
Balance as at 31 December 2023
6,563
19,576
4,471
17,474
48,084
Net book value as at 31 December 2023
102,333
115,619
4,699
6,564
229,215
The amount of borrowing costs capitalised during the year ended 31 December 2024 was nil (2023: £185 thousand).
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
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Annual Report and Accounts 2024
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Financial Statements
Appendices
Details regarding certain long-term lease agreements are as below:
(a) On 29 January 2020, the Group through its subsidiary Arena, entered into a 45-year lease for the development and operation of a
contemporary branded hotel in Zagreb, Croatia. The development, which is subject to obtaining the necessary permits, involves the
conversion of an iconic building in a prime location in the historic heart of the city. This 110-room hotel was opened in Q4 2023 and
included a destination restaurant and bar, wellness and spa facilities, fitness centre, event space and parking. The annual rent amounts
to €414 thousand.
(b) Grandis has a land leasehold interest, expiring in 2095, of Holmes Hotel London. Based on the latest rent review that was signed on
29 September 2022, the annual rent amounts to £1,250 thousand.
Grandis has an option to extend the lease to a total of 125 years, expiring in 2121. The Company also has an option to terminate the lease
in 2059.
(c) Riverbank Hotel Holding B.V. has a land leasehold interest, expiring in 2125, for Park Plaza London Riverbank, subject to rent review every
five years, based on CPI. Based on the latest rent review, with effect from 10 May 2020, the annual rent amounts to £1,135 thousand.
(d) On 18 June 2012, Park Royal Hotel Holding B.V. (‘Park Royal’) completed the purchase of the freehold property at 628 Western
Avenue, Park Royal, London (the ‘Site’), which was a development site on one of the main thoroughfares into London, for £6.0 million.
Simultaneously, Park Royal completed the sale of the Site at a price of £7.0 million and the leaseback of the Site at an initial rent of £306
thousand per year for 170 years, subject to rent review every five years, based on CPI with a cap of 5%. Based on the latest rent review,
with effect from 15 June 2022, the annual rent amounts to £417 thousand.
(e) On 20 July 2017, Waterloo Hotel Holding B.V. completed the sale of Park Plaza London Waterloo for £161.5 million subject to a leaseback
for 199 years. The initial rent of £5.6 million per year will have annual inflation adjustments subject to a cap of 4% and collar of 2%.
The following are the amounts recognised in profit or loss:
As at 31 December
2024
£’000
2023
£’000
Depreciation expense
7,674
7,177
Interest expense on lease liabilities
10,737
10,260
Expense relating to low-value assets and short-term leases (included in operating expenses)
367
227
Expense relating to low-value assets and short-term leases (included in rent expenses)
565
583
Variable lease payments (included in rent expenses)
1,771
1,749
Total amount recognised in profit or loss
21,114
19,996
The Group had total cash outflows for leases of £15,990 thousand in 2024 (2023: £15,327 thousand). The future cash outflows relating to
leases that have commenced are disclosed in Note 29c.
Set out below are the carrying amounts of lease liabilities (included under Other financial liabilities and Other payables) and the movements
during the period:
2024
£’000
2023
£’000
As at 1 January
277,363
267,051
Additions
1,296
165
Disposals
(49)
(31)
Accretion of interest1
10,737
10,445
Payments
(14,899)
(14,355)
Re-measurement of lease liability recorded in other expenses
3,984
3,852
Re-measurement of lease liability adjusted against right-of-use assets
4,642
11,001
Exchange rate differences recorded in profit and loss
1,335
(882)
Adjustments for foreign exchange differences
(2,744)
117
As at 31 December
281,665
277,363
Current
6,441
4,089
Non-current
275,224
273,274
1 The amount of borrowing costs capitalised during the year ended 31 December 2024 was nil (2023: £185 thousand).
Set out below is a split of the lease liabilities, cash payments and effect in the income statement between lease agreements for a period longer
than 40 years (‘enduring leases’) and leases for a period of up to 40 years (‘fixed-term leases’).
Year ended
31 December 2024
£’000
Total
Enduring
leases (>40)
Fixed-term
leases (<40)
Lease liabilities
251,468
30,197
281,665
Fixed lease payments
9,719
5,180
14,899
Accretion of interest
9,962
775
10,737
Depreciation
4,200
3,474
7,674
Year ended
31 December 2023
£’000
Total
Enduring
leases (>40)
Fixed-term
leases (<40)
Lease liabilities
244,437
32,926
277,363
Fixed lease payments
9,408
4,947
14,355
Accretion of interest
9,629
816
10,445
Depreciation
3,857
3,320
7,177
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
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The following provides information on the Group’s variable lease payments, including the magnitude in relation to fixed payments in 2024
and 2023:
As at 31 December 2024
Fixed
payments
£’000
Variable
payments
£’000
Total £’000
Fixed rent
13,694
–
13,694
Variable rent with minimum payment
1,204
–
1,204
Variable rent only1
–
1,771
1,771
1 Relates mainly to the concession fee on land (see Note 14).
As at 31 December 2023
Fixed
payments
£’000
Variable
payments
£’000
Total
£’000
Fixed rent
13,173
–
13,173
Variable rent with minimum payment
1,182
–
1,182
Variable rent only1
–
1,749
1,749
1 Relates mainly to the concession fee on land (see Note 14).
Lease extension and termination options
The Group has leases that include extension and termination options. These options provide flexibility in managing the leased assets and align
with the Group’s business needs. The Group exercises significant judgement in deciding whether it is reasonably certain that the extension
and termination options will be exercised.
Set out below are details of potential future undiscounted lease payments for periods covered by extension options that were not included in
the measurement of the Company’s lease liabilities. As of the end of the reporting period, the Group does not expect to exercise any
termination option.
Up to 5 years
£’000
More than 5
years £’000
Lease payments applicable in extension option periods which, as of the end of the reporting period, are not
reasonably certain to be exercised
7,367
7,078
Note 18 Other payables and accruals
As at 31 December
2024
£’000
2023
£’000
Current portion of lease liabilities (Note 17)
6,441
4,089
Share appreciation rights (Note 5(b))
3,470
2,703
Employees
4,634
5,120
VAT and taxes
12,541
13,748
Accrued interest
3,339
3,361
Corporate income taxes
592
136
Accrued expenses
20,697
22,228
Advance payments received
11,582
9,260
Accrued rent
3,500
6,354
Variable income payment to holders of Income Units
3,824
4,166
Related parties1
7,100
7,984
77,720
79,149
1 Majority of this balance ((£7,050 thousand in 2024 and £7,909 thousand in 2023) relates to an accrual for retention costs of the building contract with Gear Construction UK
Limited for the design and construction of the art’otel London Hoxton (see Note 28).
Note 19 Revenues
As at 31 December
2024
£’000
2023
£’000
Room revenue from owned hotels1
307,963
291,953
Room revenue from leased hotels2
9,216
8,127
Campsites and lodging hire
23,483
23,659
Food and beverage
82,078
74,106
Minor operating (including room cancellation)
8,106
7,003
Management fee (see Note 12(c)(i))
4,003
3,075
Franchise and reservation fee (see Note 12(c)(i))
3,183
2,814
Marketing fee
1,080
1,048
Rent Revenue
3,675
2,813
442,787
414,598
1 Room revenue from owned hotels includes also revenue from hotels that are under a <100 long-term lease.
2 Room revenue from leased hotels includes the revenue from Park Plaza Budapest and Park Plaza Wallstreet Berlin Mitte which are under 20-year lease contracts.
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
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Note 20 Operating expenses
As at 31 December
2024
£’000
2023
£’000
Salaries and related expenses
144,229
131,048
Franchise, reservation and commissions expenses (see Note 12(c)(i))
35,405
31,960
Food and beverage
20,601
20,872
Insurance and property taxes
16,503
16,343
Utilities
21,339
23,094
Administration costs
14,114
12,853
Maintenance
9,227
8,682
Laundry, linen and cleaning
7,507
6,740
Supplies
6,403
6,354
IT expenses
4,736
4,189
Communication, travel and transport
3,743
3,454
Marketing expenses
4,454
4,195
Equipment hire
2,647
2,040
Entertainment
1,635
1,416
Government grants payroll
(142)
250
Government grants fixed costs
–
172
Defined contribution pension premiums
6,060
5,249
Other expenses
5,527
5,179
303,988
284,090
Note 21 Financial expenses
As at 31 December
2024
£’000
2023
£’000
Interest and other finance expenses on bank loans
29,905
25,385
Interest on lease liabilities
10,737
10,260
Foreign exchange differences, net
1,486
–
Other
506
500
42,634
36,145
Note 22 Financial income
As at 31 December
2024
£’000
2023
£’000
Income from Park Plaza County Hall London Units
1,300
1,006
Interest on bank deposits
3,399
2,480
Foreign exchange differences, net
–
918
Interest and other financial income from jointly controlled entities (see Note 28(b))
527
354
5,226
4,758
Note 23 Other income and expenses
a.
Other expenses
As at 31 December
2024
£’000
2023
£’000
Capital loss on buy-back of Income Units previously sold to private investors
1,486
3,266
Revaluation of interest rate swap (see Note 29(a))
–
4,553
Re-measurement of lease liability1
3,984
3,852
Loss on disposal of fixed assets
494
29
Other non-recurring expenses (including Hotel pre-opening expenses)2
3,893
1,346
Refinance expenses
2,619
–
Revaluation of share appreciation rights (see Note 5(b)(i))
767
–
13,243
13,046
1 This amount represents re-measurement of the Waterloo lease liability based on the 2% collar (see Note 17).
2 Hotel pre-opening expenses relate to costs incurred by the Group in advance of opening new hotels. In 2024, this related to art’otel London Hoxton, Radisson RED Belgrade,
Serbia, which opened during 2024, and art’otel Rome Piazza Sallustio, which will be opened in March 2025. In 2023, this related to art’otel Zagreb, Croatia, Arena FRANZ
Ferdinand which opened during 2023, and art’otel London Hoxton, which opened in 2024. These costs primarily relate to payroll expenses, sales and marketing costs and
training costs of new staff.
b.
Other income
As at 31 December
2024
£’000
2023
£’000
Revaluation of share appreciation rights (see Note 5(b)(i))
–
2,816
Revaluation of interest rate swap (see Note 29(a))
4,299
–
Gain on disposal of fixed assets
299
–
Revaluation of Income Units Park Plaza County Hall London (see Note 6)
450
1,600
5,048
4,416
Note 24 Net expenses for financial liability in respect of Income Units sold to private investors
As at 31 December
2024
£’000
2023
£’000
Variable return (see Note 2(e))
14,136
15,311
Reimbursement of depreciation expenses (see Note 2(e))
(1,240)
(1,155)
12,896
14,156
Note 25 Income taxes
a.
Tax benefit (expense) included in the income statement
As at 31 December
2024
£’000
2023
£’000
Current taxes
(3,005)
(2,760)
Adjustments in respect of current income tax of previous year
24
(8)
Deferred taxes
100
1,091
(2,881)
(1,677)
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
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b.
The following are the major deferred tax (liabilities) and assets recognised by the Group and changes therein during the period:
Tax loss carry
forward
£’000
Timing
difference on
provisions
£’000
Property,
plant and
equipment
and
leases
£’000
Tax
incentives
£’000
Total
£’000
Balance as at 1 January 2024
19,784
1,721
(18,647)
5,097
7,955
Amounts charged to income statement
2,109
(616)
(915)
(478)
100
Adjustments for exchange rate differences
(396)
(69)
331
(223)
(357)
Balance as at 31 December 2024
21,497
1,036
(19,231)
4,396
7,698
Balance as at 1 January 2023
11,582
1,346
(11,134)
5,193
6,987
Amounts charged to income statement
8,343
401
(7,653)
–
1,091
Adjustments for exchange rate differences
(141)
(26)
140
(96)
(123)
Balance as at 31 December 2023
19,784
1,721
(18,647)
5,097
7,955
The above deferred taxes have been set off when they relate to the same jurisdictions and presented in the consolidated financial statements
as follows:
As at 31 December
2024
£’000
2023
£’000
Deferred tax assets
12,890
13,833
Deferred tax liabilities
(5,192)
(5,878)
7,698
7,955
c.
Reconciliation between tax expense and the product of accounting profit multiplied by the Group’s tax rate is as follows:
As at 31 December
2024
£’000
2023
£’000
Profit before income taxes
30,613
28,822
Expected tax at the tax rate of the United Kingdom 25% (2023: 25%)
(7,653)
(7,206)
Adjustments in respect of:
Effects of other tax rates
3,938
10,240
Non-deductible expenses
(158)
(627)
Disallowed interest for which deferred tax asset was not recorded
(5,030)
(11,078)
Temporary differences for which no deferred tax was recorded
2,562
(5,014)
Non-taxable income
194
484
Unrecognised current year tax losses
(3,390)
(2,966)
Recognition of deferred tax asset on losses from previous years
6,633
14,377
Other differences
23
113
Income tax expense reported in the income statement
(2,881)
(1,677)
d.
Tax laws applicable to the Group companies:
(i)
The Company is subject to taxation under the laws of Guernsey. The Company is therefore taxed at the standard rate of 0%.
(ii) Foreign subsidiaries are subject to income taxes in their country of domicile in respect of their income, as follows:
1.
Taxation in the Netherlands: corporate income tax rate is 25.8%.
2.
Taxation in the United Kingdom: corporate income tax rate for domiciled companies and for non-domiciled companies is 25%.
3. Taxation in Germany: aggregated corporate tax rate and trade income rate is 29.7%.
4. Taxation in Hungary: corporate income tax rate is 9%.
5.
Taxation in Croatia: corporate income tax rate is 18%.
6. Taxation in Italy: aggregated corporate tax rate (IRES) and local tax (IRAP) rate is 27.9%.
7.
Taxation in Austria: corporate income tax rate is 25%.
8. Taxation in Serbia: corporate income tax rate is 15%.
e.
Losses carried forward for tax purposes
As of 2024, the Group has carried forward tax losses estimated at approximately £244.1 million (2023: £198.2 million). The movement during
the year primarily relates to the utilisation of losses amounting to £14.9 million, offset by the creation of new losses totaling £61.9 million. Of
these new losses, £13.6 million relate to 2024, while the remainder pertains to prior years.
The Group did not recognise deferred tax assets for tax losses amounting to £158.9 million (2023: £118.6 million). The movement in 2024 is mainly
driven by the recognition of deferred tax assets of £26.5 million, offset by the creation of new losses of £61.8 million as mentioned above.
The carried-forward losses relate to individual entities within the Group, each operating in its own tax jurisdiction. When assessing the
recoverability of these losses, the Group evaluates whether they can be utilised against foreseeable future taxable profits, taking into
account jurisdictional limitations and the nature of the available losses. Following this analysis, the Group concluded that, for the majority of
these companies, it is not probable that sufficient future taxable profits will be generated to utilise these losses. This is primarily due to the
nature of their activities, which include holding company structures and tax-exempt operations. Given this uncertainty, deferred tax assets
have not been recognised for most of the losses. The Group continues to reassess this analysis on an ongoing basis.
Additionally, the Group has not recognised deferred tax assets for disallowed interest amounting to £155.5 million (2023: £132 million) as it
is not considered probable that these amounts will be utilised in the foreseeable future.
f.
Tax incentives
In May 2019, based on confirmation from the Ministry of Economy and pursuant to the Investment Promotion and Development of Investment
Climate Act in Croatia, Arena became eligible to claim incentive allowances. Investments eligible for incentives are investments done in Arena
One 99 Glamping Campsite, Arena Grand Kažela Campsite, Hotel Grand Brioni and Verudela Beach self-catering apartment complexes.
Arena has the right to use the investment tax credits until 2027. The execution of the investment project is subject to supervision by the
relevant institutions throughout the period of use of the tax credits and Arena will need to present regular annual reports to the tax
authority in which it will evidence that the conditions for the use of the tax credits are met.
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
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Note 26 Earnings per share
The following reflects the income and share data used in the basic earnings per share computations:
As at 31 December
2024
£’000
2023
£’000
Profit attributable to equity holders of the parent basic and diluted
28,206
22,415
Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands)
42,045
42,365
Basic earnings per share
0.67
0.53
Effect of dilution from:
Share option
437
176
Weighted average number of ordinary shares adjusted for the effect of dilution
42,482
42,541
Diluted earnings per share
0.66
0.53
In 2024, 37,500 share options (2023: 417,500) were excluded from the weighted number of ordinary shares adjusted for the effect of dilution
as they had an anti-dilutive effect.
Note 27 Segments
For management purposes, the Group’s activities are divided into Owned Hotel Operations and Management and Central Services Activities
(for further details see Note 12(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 2024
The
Netherlands
£’000
Germany
£’000
United
Kingdom
£’000
Croatia
£’000
Other1
£’000
Management
and Central
Services
£’000
Adjustments2
£’000
Consolidated
£’000
Revenue
Third party
66,196
24,399
248,627
84,058
10,675
8,832
–
442,787
Inter-segment
–
–
400
210
7
47,097
(47,714)
–
Total revenue
66,196
24,399
249,027
84,268
10,682
55,929
(47,714)
442,787
Operating expenses
Third party
(37,389)
(14,178)
(150,051)
(45,600)
(8,380)
(48,390)
–
(303,988)
Inter-segment
(6,662)
(3,387)
(20,809)
(15,274)
(926)
(210)
47,268
–
Total operating expenses
(44,051)
(17,565)
(170,860)
(60,874)
(9,306)
(48,600)
47,268
(303,988)
Segment EBITDA
22,116
6,825
77,373
21,479
1,259
7,411
–
136,463
Depreciation,
amortisation
(47,083)
Financial expenses
(42,634)
Financial income
5,226
Net expenses for liability
in respect of Income Units
sold to private investors
(12,896)
Other income
(expenses), net
(8,195)
Share in result of
joint ventures
(268)
Profit before tax
30,613
1 Includes Park Plaza Budapest in Hungary, Radisson RED Belgrade, Serbia, art’otel Rome Piazza Sallustio, Italy, and Arena Franz Ferdinand Mountain Resort
in Nassfeld, Austria.
2 Consist of inter-company eliminations.
The
Netherlands
£’000
Germany
£’000
United
Kingdom
£’000
Croatia
£’000
Other1
£’000
Adjustments2
£’000
Consolidated
£’000
Geographical information
Non-current assets3
179,692
64,310
1,037,036
234,040
94,847
44,348
1,654,273
1 Includes Park Plaza Budapest in Hungary, Radisson RED Belgrade, Serbia, art’otel Rome Piazza Sallustio, Italy, and Arena Franz Ferdinand Mountain Resort
in Nassfeld, Austria.
2 This includes the non-current assets of Management and Central Services.
3 . Non-current assets for this purpose consist of property, plant and equipment, right-of-use assets and intangible assets.
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
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Appendices
Year ended 31 December 2023
The
Netherlands
£’000
Germany
£’000
United
Kingdom
£’000
Croatia
£’000
Other1
£’000
Management
and Central
Services
£’000
Adjustments2
£’000
Consolidated
£’000
Revenue
Third party
63,302
22,759
234,912
78,123
7,859
7,643
–
414,598
Inter-segment
–
–
400
257
–
40,626
(41,283)
–
Total revenue
63,302
22,759
235,312
78,380
7,859
48,269
(41,283)
414,598
Operating expenses
Third party
(37,466)
(14,243)
(138,018)
(42,482)
(7,711)
(44,170)
–
(284,090)
Inter-segment
(6,219)
(3,047)
(20,258)
(13,547)
(637)
(257)
43,965
–
Total operating expenses
(43,685)
(17,290)
(158,276)
(56,029)
(8,348)
(44,427)
43,965
(284,090)
Segment EBITDA
19,580
5,466
76,276
20,409
(528)
6,973
–
128,176
Depreciation,
amortisation
(45,068)
Financial expenses
(36,145)
Financial income
4,758
Net expenses for liability
in respect of Income
Units sold to private
investors
(14,156)
Other income
(expenses), net
(8,630)
Share in result
of joint ventures
(113)
Profit before tax
28,822
1 Includes Park Plaza Budapest in Hungary, Radisson RED Belgrade, Serbia, art’otel Rome Piazza Sallustio, Italy, and Arena Franz Ferdinand Mountain Resort
in Nassfeld, Austria.
2 Consist of inter-company eliminations.
The
Netherlands
£’000
Germany
£’000
United
Kingdom
£’000
Croatia
£’000
Other1
£’000
Adjustments2
£’000
Consolidated
£’000
Geographical information
Non-current assets3
190,420
72,311
1,007,301
249,910
86,306
46,462
1,652,710
1 Includes Park Plaza Budapest in Hungary, Radisson RED Belgrade, Serbia, art’otel Rome Piazza Sallustio, Italy, and Arena Franz Ferdinand Mountain Resort
in Nassfeld, Austria.
2 This includes the non-current assets of Management and Central Services.
3 Non-current assets for this purpose consist of property, plant and equipment, right-of-use assets and intangible assets.
Note 28 Related parties
a.
Balances with related parties
As at 31 December
2024
£’000
2023
£’000
Loans to joint ventures (see Note 5a)
9,535
6,515
Short-term receivables
74
65
Payable to GC Project Management Limited
(45)
(75)
Payable to Gear Construction UK Limited (see c(i))
(7,055)
(12,445)
b.
Transactions with related parties
As at 31 December
2024
£’000
2023
£’000
Cost of transactions with GC Project Management Limited
(491)
(670)
Cost of transactions with Gear Construction UK Limited (see c(i))
(28,207)
(55,069)
Rent income from sub-lease of office space
55
56
Management fee revenue from jointly controlled entities
978
872
Interest income from jointly controlled entities
301
354
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 PPHE Hoxton B.V.
(the “Employer”) entered into a JCT design and build building contract with Gear Construction UK Limited, an entity controlled by Eli
Papouchado, together with members of his family (‘Gear’), for the design and construction of the art’otel London Hoxton hotel on a
‘turn-key’ basis (the ‘building contract’). The works under the building contract achieved Practical Completion on 20 December 2024.
AECOM was appointed to act as the Employer’s agent to ensure that the project was administered in line with the terms of the building
contract. It is also noted that over the course of construction, the Employer submitted a number of variations, with the Contract Sum in
each case being adjusted in line with Aecom’s subsequent cost assessment of the relevant variation.
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.
(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.
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
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Appendices
(iii) Pre-Construction and Maintenance Contract – The Group frequently uses GC Project Management Limited, an entity controlled by Eli
Papouchado together, with members of his family (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) and transportation services provided to the Group are being charged at market prices. These transactions occur occasionally.
(v) Londra & Cargill project management agreement – The Group entered into a series of agreements with GC Project Management Limited
for the provision of project management services and site supervision services to the Group in respect of the redevelopment of Hotel
Londra & Cargill in Rome, Italy, commencing in 2022 and completing on practical completion of the project.
Summary of the remuneration for Executive and Non-Executive Directors for the year ended 31 December 2024:
Base salary
and fees
£’000
Bonus
£’000
Pension
contributions
£’000
Other
benefits
£’000
Total
£’000
Chairman and Executive Directors
1,820
482
73
22
2,397
Non-Executive Directors
289
–
–
–
289
2,109
482
73
22
2,686
The above table does not include the bonus share awards for 2024 and the 2022 LTIP share awards that fully vested after the balance sheet
date. For more information, please refer to the Remuneration Committee Report from page 135 onwards.
Summary of the remuneration for Executive and Non-Executive Directors for the year ended 31 December 2023:
Base salary
and fees
£’000
Bonus
£’000
Pension
contributions
£’000
Other
benefits
£’000
Total
£’000
Chairman and Executive Directors
1,726
473
67
19
2,285
Non-Executive Directors
283
–
–
–
283
2,009
473
67
19
2,568
Directors’ interests in employee share incentive plan
As at 31 December 2024, the Executive Directors held share options to purchase 143,308 ordinary shares (2023: 121,308). 27,308 options
were fully exercisable with a £nil exercise price (2023: 27,308 with nil exercise price and 50,000 with an exercise price of £14.30). No share
options were granted to Non-Executive Directors of the Board.
Note 29 Financial instruments risk management objectives and policies
The Group’s principal financial instruments, other than derivatives, comprise bank borrowings, lease liabilities, cash and cash equivalents
and restricted deposits. The main purpose of these financial instruments is to finance the Group’s operations. The Group has various other
financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations.
The main risks arising from the Group’s financial instruments are cash flow interest rate risk, credit risk and liquidity risk. The Board of
Directors reviews and agrees on policies for managing each of these risks which are summarised below. The Group’s accounting policies
in relation to derivatives are set out in Note 2.
a.
Interest rate risk
The Group’s exposure to the risk for changes in market interest rates relates primarily to the Group’s long-term debt obligations with
a floating interest rate.
The Group’s policy is to manage its interest costs using fixed-rate debt. To manage its interest costs, the Group enters into interest rate
swaps, in which the Group agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts
calculated by reference to an agreed-upon notional principal amount. Furthermore, the Group uses fixed interest rate debts. For this
reason the Group’s cash flow is not significantly sensitive to possible changes in market interest rates. Possible changes in interest rates
do, however, affect the Group’s equity as the fair value of the swap agreements changes with interest rate changes. These swaps are
designated to hedge underlying debt obligations.
The Company has entered into interest rate swap contracts with unrelated financial institutions in order to reduce the effect of interest rate
fluctuations or risk of certain real estate investment’s interest expense on its variable rate debt. The Company is exposed to credit risk in the
event of non-performance by the counterparty to these financial instruments. Management believes the risk of loss due to non-performance
to be minimal and therefore decided not to hedge this.
The accounting treatment for the interest rate swaps and whether they qualify as accounting hedges under IFRS 9 is determined
separately for each contract. If the contract qualifies as accounting hedge then the unrealised gain or loss on the contract is recorded in the
consolidated statement of comprehensive income. If the contract does not qualify as accounting hedge then the gain or loss on the contract
is recorded in the consolidated income statement. The fair value of the interest rate swaps is determined by taking into account the present
interest rates compared with the contracted fixed rate over the life of the contract. The valuation models incorporate various market inputs
such as interest rate curves and the fair value measurement is classified to Level 2 of the fair value hierarchy.
For the year ended 31 December 2024, the Company recorded a profit of £4.3 million (2023: loss of £4.5 million) in Other income/other
expense in the consolidated income statement and an unrealised profit of £4.3 million (2023: loss of £5.0 million) in the consolidated statement
of comprehensive income, representing the change in the fair value of these interest rate swaps during the period. The aggregate fair value
of the interest rate swap contracts was £28.4 million as at 31 December 2024 (2023: £23.0 million) and is included in Other receivables and
prepayments and Other non-current financial assets on the consolidated statements of financial position.
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings
affected, after the impact of hedge accounting. With all other variables held constant, the Group’s profit before tax is affected through the
impact on floating rate borrowings, as follows:
Effect on profit before tax £’000
Increase in floating interest rate1
GBP
EUR
US Dollar
1%
189
50
90
2%
379
101
179
5%
947
252
448
1 The assumed movement in floating interest rate for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly
higher volatility than in prior years.
b.
Credit risk
The Group trades only with recognised, creditworthy third parties. It has policies in place to ensure that sales are made to customers with
an appropriate credit history. The Company’s policies ensure that sales to customers are settled through advance payments, in cash or by
major credit cards (individual customers). Since the Group trades only with recognised third parties, there is no requirement for collateral
for debts with third parties. Furthermore, the Group has no dependency on any of its customers. The receivable balances are monitored on
an ongoing basis. Management monitors the collection of receivables through credit meetings and weekly reports on individual balances of
receivables. The maximum credit exposure equals the carrying amount of the trade receivables and other receivables since a loss allowance
for expected credit losses is recorded in respect of all trade and other receivables. The result of these actions is that the Group’s exposure
to bad debts is not significant.
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
204
205
Strategic Report
Corporate Governance
Financial Statements
Appendices
With respect to credit risk arising from other financial assets of the Group, which comprise cash and cash equivalents, the Group’s exposure
to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments. The
Group has limited concentration risk in respect of its cash at banks.
c.
Liquidity risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and bank loans.
The Group’s policy is to arrange medium-term bank facilities to finance its construction operation and then to convert them into long-term
borrowings when required.
The Group continues to hold a strong liquidity position, with an overall consolidated cash balance of £113.2 million as at 31 December 2024.
The table below summarises the maturity profile of the Group’s financial liabilities as at 31 December 2024 and 2023 based on contractual
undiscounted payments.
As at 31 December 2024
Less than
3 months
£’000
3 to 12
months
£’000
Year 2
£’000
Year 3 to 5
£’000
> 5 years
£’000
Total
£’000
Interest-bearing loans and borrowings1
28,969
86,087
250,146
309,862
354,010
1,029,074
Financial liability in respect of Income Units sold to
private investors2
3,534
10,602
14,136
42,408
110,565
181,245
Lease liability3
3,650
11,176
13,715
39,693
890,292
958,526
Trade payables
9,088
–
–
–
–
9,088
Other liabilities
20,047
20,926
1,810
1,188
4,995
48,966
65,288
128,791
279,807
393,151
1,359,862
2,226,899
As at 31 December 2023
Less than
3 months
£’000
3 to 12
months
£’000
Year 2
£’000
Year 3 to 5
£’000
> 5 years
£’000
Total
£’000
Interest-bearing loans and borrowings1
20,131
59,145
91,352
659,588
195,015
1,025,231
Financial liability in respect of Income Units sold to
private investors2
3,828
11,483
15,311
45,933
114,287
190,842
Lease liability3
3,145
9,944
14,508
42,322
885,424
955,343
Trade payables
15,067
–
–
–
–
15,067
Other liabilities
45,793
30,061
–
–
20,612
96,466
87,964
110,633
121,171
747,843
1,215,338
2,282,949
1 See Note 13 for further information.
2 Presented according to discounted amount due to the variability of the payments over the balance of the 999-year term.
3 Lease liability includes four leases with upward rent reviews based on future market rates in one lease and changes in the CPI/RPI in the other lease and, thus, future
payments have been estimated using current market rentals and current United Kingdom-based CPIs/RPIs, respectively, except Park Plaza London Waterloo where the
amounts included 50 years of future payments regarding the lease of Park Plaza London Waterloo instead of 199 years as stated in the lease agreement. Also, the amounts
do not take into account the collar of 2%. The Group’s management believes that the amount included in the above table reflects the relevant cash flow risks to which the
Group would be reasonably exposed in the ordinary course of business.
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in
order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. The Group monitors capital
using a gearing ratio, which is net bank debt divided by total capital plus net bank debt. The Group’s policy is to keep the gearing ratio between
50% and 60%. The Group includes within net bank debt interest-bearing bank loans and borrowings, less cash and cash equivalents and other
liquid assets. Capital includes equity less the hedging reserve.
2024
£’000
2023
£’000
Interest-bearing bank loans and borrowings
885,644
893,036
Less – cash and cash equivalents
(113,225)
(150,416)
Less – long-term restricted cash
(5,826)
(10,385)
Less – short-term restricted cash
(16,602)
(6,909)
Net debt
749,991
725,326
Equity
526,058
531,173
Hedging reserve1
(19,711)
(15,396)
Total capital
506,347
515,777
Capital and net debt
1,252,795
1,241,103
Gearing ratio
59.9%
58.4%
1 Includes the hedging reserve that Is allocated to the Non-controlling interests.
Changes in liabilities arising from financing activities
The table below summarises the movements in the Group’s financial liabilities for the years ended at 31 December 2024 and 2023.
As at
1 January
2024
£’000
Cash
flows
£’000
Re-
measure-
ment
through
profit and
loss
£’000
Re-
measure-
ment
against
right-of-
use assets
£’000
Foreign
exchange
movement
£’000
Movement
through
profit and
loss
£’000
Re-classifi-
cation and
other
movements
£’000
As at
31 December
2024
£’000
Non-current interest-bearing loans and
borrowings
845,199
46,668
–
–
(12,746)
–
(74,064)
805,057
Non-current lease liability
273,274
–
3,984
5,889
(2,491)
1,335
(6,767)
275,224
Financial liability in respect of Income Units sold
to private investors
114,287
(5,287)
–
–
–
–
1,564
110,564
Current share appreciation rights
2,703
–
767
–
–
–
–
3,470
Current interest-bearing loans and
borrowings
47,837
(41,147)
–
–
(1,503)
981
74,419
80,587
Current lease liability1
4,089
(4,162)
–
–
(253)
–
6,767
6,441
1,287,389
(3,928)
4,751
5,889
(16,993)
2,316
1,919
1,281,343
1 Includes accrued interest on deferred lease payments.
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
206
207
Strategic Report
Corporate Governance
Financial Statements
Appendices
As at
1 January
2023
£’000
Cash
flows
£’000
Re-
measure-
ment
through
profit and
loss
£’000
Re-
measure-
ment
against
right-of-use
assets
£’000
Foreign
exchange
movement
£’000
New leases
£’000
Movement
through
profit and
loss
£’000
Re-classifi-
cation and
other
movements
£’000
As at
31 December
2023
£’000
Non-current interest-bearing
loans and borrowings
817,631
65,265
–
–
(5,720)
–
–
(31,977)
845,199
Non-current lease liability
261,544
–
3,852
11,001
156
165
(882)
(2,562)
273,274
Financial liability in respect of
Income Units sold to private
investors
121,084
(5,609)
–
–
–
–
–
(1,188)
114,287
Current share appreciation rights
5,519
–
(2,816)
–
–
–
–
–
2,703
Current interest-bearing loans and
borrowings
47,101
(31,717)
–
–
(1,243)
–
844
32,852
47,837
Current lease liability1
5,507
(4,095)
–
–
(39)
–
–
2,716
4,089
1,258,386
23,844
1,036
11,001
(6,846)
165
(38)
(159)
1,287,389
1 Includes accrued interest on deferred lease payments.
Fair value of financial instruments
The fair values of the financial assets and liabilities are included in the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate
the fair values:
The fair values of cash and cash equivalents, trade receivables, trade payables, and other current financial assets and liabilities approximate
their carrying amounts largely due to the short-term maturities of these instruments. The fair value of floating interest rate liabilities also
approximates their carrying amount as the periodic changes in interest rates reflect the movement in market rates.
The fair value of loans from banks and other financial liabilities is estimated by discounting future cash flows using rates currently available
for debt on similar terms, credit risk and remaining maturities.
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by a valuation technique based
on the lowest level input that is significant to the fair value so determined:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
The Group enters into derivative financial instruments with financial institutions with investment grade credit ratings. Derivatives are valued
using valuation techniques for swap models, using present value calculations. The models incorporate various inputs, including the credit
quality of counterparties, and interest rate curves. The Group also granted share appreciation rights of the Company to Clal (see Note 5b)
which is valued by using the Black–Scholes model. In addition, the Group also holds 46 Income Units in Park Plaza County Hall London, which
were valued by external valuator using a discounted cash flow technique. These valuation techniques maximise the use of observable market
data where it is available and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument
are observable, the instrument is included in Level 2. If one or more of the significant inputs is not based on observable market data, the
instrument is included in Level 3.
As at 31 December 2024, the Group held the following financial instruments measured at fair value:
Liabilities
31 December
2024
£’000
Level 1
£’000
Level 2
£’000
Level 3
£’000
Share appreciation rights
3,470
–
–
3,470
Assets
31 December
2024
£’000
Level 1
£’000
Level 2
£’000
Level 3
£’000
Money market funds
34,981
34,981
–
–
Interest rate swaps used for hedging
28,398
–
28,398
–
Income Units in Park Plaza County Hall London
18,150
–
–
18,150
Change of up to 10% in the key inputs (Expected volatility of the share price, Risk-free interest rate) used in the valuation of the Share
appreciation rights and a change of up to 50bp in discount rate used in the valuation of the Income Units in Park Plaza County Hall London
would not result in a significant change in the fair value.
As at 31 December 2023, the Group held the following financial instruments measured at fair value:
Liabilities
31 December
2023
£’000
Level 1
£’000
Level 2
£’000
Level 3
£’000
Share appreciation rights
2,703
–
–
2,703
Assets
31 December
2023
£’000
Level 1
£’000
Level 2
£’000
Level 3
£’000
Money market funds
33,042
33,042
–
–
Interest rate swaps used for hedging
22,977
–
22,977
–
Income Units in Park Plaza County Hall London
17,700
–
–
17,700
During 2024 and 2023, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into or out of Level 3
fair value measurements.
The carrying amounts and fair values of the Group’s financial instruments other than those whose carrying amount approximates their fair
value are as follows:
Carrying amount
31 December
Fair value
31 December
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Financial liabilities
Bank borrowings
885,644
893,036
860,339
860,244
Note 30 Subsequent events
Final dividend
The Board is proposing a final dividend payment of 21 pence per share (2023: 20 pence per share), subject to shareholder approval at the
Annual General Meeting.
Notes to consolidated financial statements
for the year ended 31 December 2024 – continued
PPHE Hotel Group
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Annual Report and Accounts 2024
Annual Report and Accounts 2024
208
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Strategic Report
Corporate Governance
Financial Statements
Appendices
Name of company
Principal activity
Country of
incorporation
Direct and
indirect
holdings %
Dvadeset Osam d.o.o. (formerly known as W2005/Dvadeset Osam d.o.o.)
Holding company
Croatia
100
Eindhoven Hotel Operator B.V.
Hotel operation
Netherlands
100
Euro Sea Hotels N.V.
Holding company
Netherlands
100
Germany Real Estate B.V.
Holding company
Netherlands
54.9
Golden Wall Investments Limited
Finance company
British Virgin Islands
100
Grandis Netherlands Holding B.V.
Holding company
Netherlands
100
Hotel Club Construction B.V. (formerly Hotel Maastricht B.V.)
Holding company
Netherlands
100
Hotel Leeds Holding B.V.
Holding company
Netherlands
100
Hotel Nottingham Holding B.V.
Holding company
Netherlands
100
Hoxton Hotel Operator Limited
Hotel operation
United Kingdom
51
Leeds Hotel Operator Limited (formerly Nottingham Park Plaza Hotel
Operator Limited)
Hotel operation
United Kingdom
100
Leno Investment Limited
Holding company
Guernsey
100
Londra Cargill Parent S.r.l.
Holding company
Italy
100
Marlbray Limited
Holding company
United Kingdom
100
Mazurana d.o.o.
Holding company
Croatia
54.9
North Lambeth Holding B.V.
Holding company
Netherlands
100
Nottingham Hotel Operator Limited
Hotel operation
United Kingdom
100
Park Plaza Berlin Hotelbetriebsgesellschaft mbH (in liquidation)
Hotel operation
Germany
54.9
Park Plaza County Hall London Ltd
Holding company
United Kingdom
11.5
Park Plaza Germany Holdings GmbH
Holding company
Germany
54.9
Park Plaza Hospitality Services (UK) Limited
Hotel operation
United Kingdom
100
Park Plaza Hotels (Germany) Services GmbH
Hotel operation
Germany
54.9
Park Plaza Hotels (UK) Limited
Holding company
United Kingdom
100
Park Plaza Hotels (UK) Services Limited
Management
United Kingdom
100
Park Plaza Hotels Berlin Wallstrasse GmbH
Hotel operation
Germany
54.9
Park Plaza Hotels Europe (Germany) B.V.
Holding company
Netherlands
100
Park Plaza Hotels Europe B.V.
Management
Netherlands
100
Park Plaza Hotels Europe Holdings B.V.
Holding company
Netherlands
100
Park Plaza Nürnberg GmbH
Hotel operation
Germany
54.9
Appendices
210
Subsidiaries included in the Group
214
Jointly controlled entities
214
Current renovation, repositioning and pipeline projects
215
Glossary
218
Alternative Performance Measures
220
Contacts
Subsidiaries included in the Group
Name of company
Principal activity
Country of
incorporation
Direct and
indirect
holdings %
1 Westminster Bridge Plaza Management Company Limited
Hotel operation
United Kingdom
55.1
A40 Data Centre B.V.
Holding company
Netherlands
100
A40 Office B.V.
Holding company
Netherlands
100
ABK Hotel Holding B.V.
Holding company
Netherlands
54.9
ACO Hotel Holding B.V.
Holding company
Netherlands
54.9
Amsterdam Airport Hotel Holding B.V. (formerly known as Victoria Schiphol
Holding B.V.)
Holding company
Netherlands
100
Amsterdam Airport Hotel Operator B.V.
Hotel operation
Netherlands
100
Arena 88 Rooms d.o.o. Beograd-Palilula
Hotel operation
Serbia
54.9
ARENA FRANZ Ferdinand GmbH
Hotel operation
Austria
54.9
Arena Hospitality Group d.d.
Hotel operation
Croatia
54.9
Arena Hospitality Management d.o.o.
Management
Croatia
54.9
art’amsterdam Hotel Operator B.V.
Hotel operation
Netherlands
100
art’otel Berlin City Centre West GmbH
Hotel operation
Germany
54.9
art’otel Köln betriebsgesellschaft mbH
Hotel operation
Germany
54.9
Art’otel (I.L.) Management Services Limited (under liquidation)
Holding company
Israel
100
Aspirations (Limited)
Holding company
Guernsey
51
Bora B.V. (formerly known as WH/DMREF Bora B.V.)
Holding company
Netherlands
100
Bora Finco B.V.
Holding company
Netherlands
100
County Hall Hotel Holdings B.V. (formerly known as PPHE Arena Holding B.V.)
Holding company
Netherlands
100
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
210
211
Strategic Report
Corporate Governance
Financial Statements
Appendices
Name of company
Principal activity
Country of
incorporation
Direct and
indirect
holdings %
Signature Top Ltd
Holding company
United Kingdom
51
Signature Top II Ltd
Holding company
United Kingdom
51
Società Immobiliare Alessandro De Gasperis S.r.l.
Hotel operation
Italy
51
South Bank Hotel Management Company Ltd
Holding company
United Kingdom
11.5
Suf Holding B.V.
Holding company
Netherlands
100
Sugarhill Investments B.V.
Holding company
Netherlands
54.9
SW Szállodaüzemeltetö Kft
Hotel operation
Hungary
54.9
The Mandarin Hotel B.V.
Holding company
Netherlands
100
TOZI Restaurant Operator Limited
Hotel operation
United Kingdom
100
Ulika d.o.o.
Holding company
Croatia
54.9
Utrecht Hotel Holding B.V.
Holding company
Netherlands
100
Utrecht Hotel Operator B.V.
Hotel operation
Netherlands
100
Victoria Amsterdam Hotel Holding B.V.
Holding company
Netherlands
100
Victoria Amsterdam Hotel Operator B.V.
Hotel operation
Netherlands
100
Victoria London (Real Estate) B.V.
Holding company
Netherlands
100
Victoria London B.V. (formerly known as Club Luton Hotel Holding B.V. and Club
Ealing Hotel Holding B.V.)
Holding company
Netherlands
100
Victoria Monument B.V.
Holding company
Netherlands
100
Victoria Park Plaza Operator Limited
Hotel operation
United Kingdom
100
W29 Development LLC
Holding company
Delaware
100
W29 Owner LLC
Holding company
Delaware
100
Waterloo Hotel Holding B.V. (formerly known as Hercules House Holding B.V.)
Holding company
Netherlands
100
Waterloo Hotel Operator Limited (formerly known as Hercules House
Operator Limited)
Hotel operation
United Kingdom
100
Westminster Bridge Hotel Operator Limited
Hotel operation
United Kingdom
100
Westminster Bridge London (Real Estate) B.V.
Holding company
Netherlands
100
Westminster Bridge London B.V.
Holding company
Netherlands
100
Name of company
Principal activity
Country of
incorporation
Direct and
indirect
holdings %
Park Royal Hotel Holding B.V. (formerly known as Club A40 Holding B.V.)
Holding company
Netherlands
100
Park Royal Hotel Operator Limited (formerly known as Club A40 Hotel
Operator Limited)
Hotel operation
United Kingdom
100
Parkvondel Hotel Holding B.V.
Holding company
Netherlands
100
Parkvondel Hotel Operator B.V.
Hotel operation
Netherlands
100
Parkvondel Hotel Real Estate B.V.
Holding company
Netherlands
100
PPHE Art Holding B.V.
Holding company
Netherlands
100
PPHE Coop B.V.
Holding company
Netherlands
100
PPHE Germany B.V.
Holding company
Netherlands
100
PPHE Germany Holdings GmbH
Holding company
Germany
54.9
PPHE Headco Limited
Holding company
United Kingdom
100
PPHE Holdings Limited
Holding company
United Kingdom
100
PPHE Hotel Group Limited
Holding company
Guernsey
100
PPHE Hoxton B.V.
Holding company
Netherlands
51
PPHE Living Limited
Holding company
United Kingdom
100
PPHE Management (Croatia) B.V.
Holding company
Netherlands
100
PPHE Netherlands B.V. (formerly Maastricht Hotel Holding B.V.)
Holding company
Netherlands
100
PPHE NL Region B.V.
Holding company
Netherlands
100
PPHE Nürnberg Operator Hotelbetriebsgesellschaft mbH
Hotel operation
Germany
54.9
PPHE Support Services Limited
Hotel operation
United Kingdom
100
PPHE UK Holding B.V. (formerly Club Euro Hotels B.V.)
Holding company
Netherlands
100
PPHE USA B.V.
Holding company
Netherlands
100
PPHE USA Holding B.V.
Holding company
Netherlands
100
PPHE West 29th Street USA Inc
Holding company
Delaware
100
PPWL Parent B.V.
Holding company
Netherlands
100
Riverbank Hotel Holding B.V.
Holding company
Netherlands
51
Riverbank Hotel Operator Limited
Hotel operation
United Kingdom
51
Sherlock Holmes Hotel Shop Limited
Hotel operation
United Kingdom
100
Sherlock Holmes Park Plaza Limited
Hotel operation
United Kingdom
100
Signature Sub BV
Holding company
Netherlands
51
Appendices – continued
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
212
213
Strategic Report
Corporate Governance
Financial Statements
Appendices
Annual General
Meeting
The Annual General Meeting of PPHE Hotel Group.
Annual Report
and Accounts
The Annual Report of PPHE Hotel Group in
relation to the year ended 31 December 2024.
Arena Campsites® Located in eight beachfront sites across the
Southern coast of Istria, Croatia. They operate
under the Arena Hospitality Group umbrella,
of which PPHE Hotel Group is a controlling
shareholder. arenacampsites.com
Arena
Hospitality
Group
Also referred to as ‘Arena’ or ‘AHG’. One of the
most dynamic hospitality groups in Central and
Eastern Europe, currently offering a portfolio
of 30 owned, co-owned, leased and managed
properties with more than 10,000 rooms and
accommodation units in Croatia, Germany,
Hungary, Serbia and Austria. PPHE Hotel Group
has a controlling ownership interest in Arena
Hospitality Group. arenahospitalitygroup.com
Arena Hotels &
Apartments®
Arena Hotels & Apartments is a collection of hotels
and self-catering apartment complexes offering
relaxed and comfortable accommodation within
beachfront locations across the historic settings of
Pula and Medulin in Istria, Croatia and at a mountain
resort in Nassfeld, Austria. They operate under the
Arena Hospitality Group umbrella, of which PPHE
Hotel Group is a controlling shareholder.
art’otel®
A lifestyle collection of hotels that fuse
exceptional architectural style with art-inspired
interiors, located in cosmopolitan centres across
Europe. PPHE Hotel Group is owner of the
art’otel® brand worldwide. artotel.com
Board
Eli Papouchado (Non-Executive Chairman),
Yoav Papouchado (Alternate Director),
Boris Ivesha (President & Chief Executive Officer),
Greg Hegarty (Co-Chief Executive Officer),
Daniel Kos (Chief Financial Officer &
Executive Director),
Nigel Keen (Non-Executive Director & Senior
Independent Director),
Ken Bradley ((Deputy) Non-Executive Chairman),
Marcia Bakker (Non-Executive Director),
Stephanie Coxon (Non-Executive Director),
Roni Hirsch (Non-Executive Director)
BREEAM
Building Research Establishment Environmental
Assessment Method.
Capital
expenditure,
CAPEX
Purchases of property, plant and equipment,
intangible assets, associate and joint venture
investments, and other financial assets.
Company
PPHE Hotel Group Limited, a Guernsey
incorporated Company listed on the Main Market
of the London Stock Exchange plc.
CSRD
Corporate Sustainability Reporting Directive.
Derivatives
Financial instruments used to reduce risk, the
price of which is derived from an underlying
asset, index or rate.
Direct channels
Methods of booking hotel rooms (both digital and
voice) not involving third party intermediaries.
Dividend per
share
Proposed/approved dividend for the year divided
by the weighted average number of outstanding
shares after dilution at the end of the period.
Glossary
Jointly controlled entities
Name of company
Principal activity
Country of
incorporation
Direct and
indirect
holdings %
ABM Hotel Holding B.V.1
Holding company
Netherlands
50
art’otel berlin mitte/Park Plaza betriebsgesellschaft mbH1
Hotel operation
Germany
50
Park Plaza betriebsgesellschaft mbH1
Hotel operation
Germany
50
PPBK Hotel Holding B.V. (formerly known as ABK Hotel Holding B.V.)1
Holding company
Netherlands
50
1 Indirectly held through Arena Hospitality Group d.d.
Current renovation, repositioning and pipeline projects
Project
Location
Scope
Status
art’otel London Hoxton
London, United Kingdom
New development
Full completion by H2 2025
art’otel in New York City
New York City, United States
New development
Temporarily paused
art’otel Rome Piazza Sallustio
Rome, Italy
Repositioning
Expected to open Q1 2025
Development project London Victoria
London, United Kingdom
Asset optimisation
Temporarily paused
Development site Park Royal London
London, United Kingdom
New development
In design process
Development site Westminster Bridge Road, London
London, United Kingdom
New development
In design process
Guest House Hotel Riviera, Pula
Istria, Croatia
Repositioning
Temporarily paused
Appendices – continued
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
214
215
Strategic Report
Corporate Governance
Financial Statements
Appendices
Earnings per
share
Earnings per share amounts are calculated by
dividing the net profit (loss) for the year by the
weighted average number of ordinary shares
outstanding during the year. Diluted earnings
(loss) per share amounts are calculated by
dividing the net profit (loss) for the year by the
weighted average number of ordinary shares
outstanding during the year plus the weighted
average number of ordinary shares that would
be issued on the conversion of all the dilutive
potential ordinary shares into ordinary shares.
Employee
engagement
survey
We ask our team members to participate in
a survey to measure employee engagement.
EPRA (European
Public Real Estate
Association)
The EPRA reporting metrics analyse
performance (value, profit and cash flow)
given that we have full ownership of the
majority of our properties.
EPS
Earnings per share.
EU
The European Union.
Euro, EUR, €
The currency of the European Economic
and Monetary Union.
Exceptional
items
Items which are not reflective of the normal
trading activities of the Group.
Exchange rates,
FX
The exchange rates used were obtained from
the local national banks’ website.
FF&E
Furniture, fittings and equipment.
Franchise
A form of business organisation in which a
company which already has a successful
product or service (the franchisor) enters into
a continuing contractual relationship with other
businesses (franchisees) operating under the
franchisor’s trade name and usually with the
franchisor’s guidance, in exchange for a fee.
Goodwill
The difference between the consideration given
for a business and the total of the fair values of
the separable assets and liabilities comprising
that business.
GRS
Guest Rating Score is the online reputation score
used by ReviewPro – an industry leader in guest
intelligence solutions.
Guernsey
The Island of Guernsey.
Hotel revenue
Revenue from all revenue-generating activity
undertaken by managed and owned and
leased hotels, including room nights, food
and beverage sales.
Income Units
Cash flows derived from the net income
generated by rooms in Park Plaza London
Westminster Bridge, which have been sold
to private investors.
LSE
London Stock Exchange. PPHE Hotel
Group’s shares are traded on the Premium
Listing segment of the Official List of the UK
Listing Authority.
Key
Performance
Indicator (KPI)
Key Performance Indicator (KPI) is a
measurable value that demonstrates how
effectively an organization is achieving its key
business objectives.
Market share
The share of the total sales of a product or group
of products by a company in a particular market.
It is often shown as a percentage and can be used
as a performance indicator to compare with
competitors in the same market (sector).
NCI
Non-controlling interest
Number of
properties
Number of owned hotel properties at the end
of the period.
Number of
rooms
Number of rooms in owned hotel properties
at the end of the period.
Occupancy
Total occupied rooms divided by net available
rooms or RevPAR divided by ARR.
Online travel
agent
Online companies whose websites permit
consumers to book various travel related
services directly over the Internet.
Park Plaza®
Upper upscale hotel brand. PPHE Hotel Group is
master franchisee of the Park Plaza® Hotels &
Resorts brand owned by Radisson Hotel Group.
PPHE Hotel Group has the exclusive right to
develop the brand across 56 countries in Europe,
the Middle East and Africa. parkplaza.com
Park Plaza Hotel
One hotel from the Park Plaza® Hotels &
Resorts brand.
Pipeline
Hotels/rooms that will enter the PPHE Hotel Group
system at a future date.
Pound Sterling/
GBP £
The currency of the United Kingdom.
PPHE Hotel
Group
PPHE Hotel Group is also referred to as ‘the
Group’ and is an international hospitality real
estate group. Through its subsidiaries, jointly
controlled entities and associates, the Group
owns, co-owns, develops, leases, operates and
franchises hospitality real estate. The Group’s
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.
Radisson Hotel
Group
Created in early 2018, one of the largest hotel
companies in the world. Hotel brands owned by
Radisson Hotel Group are Radisson Collection™,
Radisson Blu®, Radisson®, Radisson RED®, Radisson
Individuals, Park Plaza®, Park Inn® by Radisson,
Country Inn & Suites® by Radisson, and Prize by
Radisson. The portfolio of Radisson Hotel Group
includes more than 1,495 hotels in operation and
under development, located in more than 100
countries and territories, operating under global
hotel brands. Jin Jiang International Holdings is the
majority shareholder of Radisson Hotel Group.
radissonhotelgroup.com
Radisson
RewardsTM
The hotel rewards programme of Radisson Hotel
Group, including Park Plaza® Hotels & Resorts and
art’otel®. The programme is owned by Radisson
Hotel Group. Gold Points® is the name of the
currency earned through the Radisson
Rewards™ programme.
radissonrewards.com
Responsible
Business
PPHE Hotel Group’s Responsible Business
strategy is a genuine, active and responsible
commitment to our environment and society.
Room count
Number of rooms franchised, managed, owned
or leased by PPHE Hotel Group.
Subsidiary
A company over which the Group
exercises control.
Weighted
average number
of shares
outstanding
during the year
The weighted average number of outstanding
shares taking into account changes in the
number of shares outstanding during the year.
Working capital
The sum of inventories, receivables and payables
of a trading nature, excluding financing and
taxation items.
Glossary – continued
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
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217
Strategic Report
Corporate Governance
Financial Statements
Appendices
Alternative Performance Measures
In order to aid stakeholders and investors in analysing the Group’s performance and understanding the value of its assets and earnings
from a property perspective, the Group has disclosed the following Alternative Performance Measures, which are commonly used in the Real
Estate and the Hospitality sectors.
Adjusted EPRA
earnings
EPRA earnings with the Company’s specific
adjustments. The main adjustments include
removal of unusual or one-time influences which
are not part of the Group’s regular operations
and adding back the reported depreciation
charge, which is based on assets at historical
cost, and replacing it with a charge calculated as
4% of the Group’s total revenues, representing
the Group’s expected average cost to upkeep the
real estate in good quality. The reconciliation of
the Group’s earnings attributed to equity holders
of the parent company to Adjusted EPRA
earnings can be found on page 44.
Adjusted EPRA
earnings
per share
Adjusted EPRA earnings divided by the weighted
average number of ordinary shares outstanding
during the year.
Average room
rate (ARR)
Total room revenue divided by the number
of rooms sold.
Debt Service
Coverage Ratio
(DSCR)
EBITDA, less net expenses for financial liability in
respect of Income Units sold to private investors
and lease payments, divided by the sum of
interest on bank loans and yearly bank loans
redemption.
EBIT
Earnings before interest (Financial income and
expenses), tax, share in results of joint ventures
and exceptional items presented as other income
and expense.
EBITDA
Earnings before interest (Financial income and
expenses), tax, depreciation and amortisation,
impairment loss, share in results of joint
ventures and exceptional items presented
as other income and expense.
EBITDA margin
EBITDA divided by total revenue.
EBITDAR
Earnings before interest (Financial income and
expenses), tax, depreciation and amortisation,
impairment loss, rental expenses, share in
results of joint ventures and exceptional items
presented as other income and expense.
EPRA earnings
Shareholders’ earnings from operational
activities adjusted to remove changes in fair
value of financial instruments and reported
depreciation. The reconciliation of the Group’s
earnings attributed to equity holders of the
parent company to EPRA earnings can be found
on page 44.
EPRA earnings
per share
EPRA earnings divided by the weighted average
number of ordinary shares outstanding during
the year.
EPRA LTV
(EPRA net debt
leverage)
Net debt based on proportionate consolidation
divided by the sum of the market value of the
properties and the net working capital and
excluding certain items not expected to crystallise
in a long-term investment property business
model (deferred tax on timing differences and
financial instruments) based on proportionate
consolidation. The reconciliation of the ratio
between the reported net debt and the reported
property value (net debt leverage per the financial
statements) to EPRA LTV can be found on page 47.
EPRA NAV (Net
Asset Value)
Recognised equity, attributable to the parent
company’s shareholders, including reversal of
derivatives, deferred tax asset for derivatives,
deferred tax liabilities related to the properties
and revaluation of operating properties.
Glossary – continued
EPRA NDV (Net
Disposal Value)
Recognised equity, attributable to the parent
company’s shareholders on a fully diluted basis
adjusted to include properties, other investment
interests, deferred tax, financial instruments
and fixed interest rate debt at disposal value.
Adjustments to the recognised equity are
calculated on the share allocated to the parent
company’s shareholders (net of non-controlling
interest). The reconciliation of the Group’s equity
attributable to equity holders of the parent (NAV
per the financial statements) to EPRA NDV can be
found on page 43.
EPRA NDV per
share
EPRA NDV divided by the fully diluted number of
shares at the end of the period.
EPRA NRV (Net
Reinstatement
Value)
Recognised equity, attributable to the parent
company’s shareholders on a fully diluted basis
adjusted to include properties and other
investment interests at fair value and to exclude
certain items not expected to crystallise in a
long-term investment property business model
(deferred tax on timing differences on property,
plant and equipment and intangible assets and
financial instruments). Adjustments to the
recognised equity are calculated on the share
allocated to the parent company’s shareholders
(net of non-controlling interest). The reconciliation
of the Group’s equity attributable to equity
holders of the parent (NAV per the financial
statements) to EPRA NRV can be found on page 43.
EPRA NRV per
share
EPRA NRV divided by the fully diluted number of
shares at the end of the period.
EPRA NTA (Net
Tangible Assets)
Recognised equity, attributable to the parent
company’s shareholders on a fully diluted
basis adjusted to include properties and other
investment interests at fair value and to exclude
intangible assets and certain items not expected to
crystallise based on the Company’s expectations
for investment property disposals in the future.
Adjustments to the recognised equity are
calculated on the share allocated to the parent
company’s shareholders (net of non-controlling
interest). The reconciliation of the Group’s NAV to
EPRA NTA can be found on page 43.
EPRA NTA per
share
EPRA NTA divided by the fully diluted number
of shares at the end of the period.
Gearing ratio
Net bank debt divided by the sum of total equity
excluding hedging reserve and net bank debt.
Interest Cover
Ratio (ICR)
EBITDA, less net expenses for financial liability in
respect of Income Units sold to private investors
and lease payments, divided by interest on
bank loans.
Like-for-like
Results achieved through operations that are
comparable with the operations of the previous
period. Current period’s reported results are
adjusted to have an equivalent comparison
with previous periods’ results, with similar
seasonality and the same set of hotels.
Loan-to-value
ratio (LTV)
Interest-bearing liabilities after deducting cash
and cash equivalents as a percentage of the
properties’ market value at the end of the period.
Maintenance
CAPEX
Calculated as 4% of revenues, which represents
the expected average maintenance capital
expenditure required in the operating properties.
Net debt
Calculated as total borrowings minus cash and
cash equivalents, including both long-term and
short-term restricted cash.
Normalised PBT,
normalised
profit before tax
Profit before tax adjusted to remove exceptional
or one-time influences which are not part of the
Group’s regular operations. The reconciliation
of the Group’s reported profit before tax to
normalised profit before tax can be found on
page 42.
RevPAR
Revenue per available room. Total room revenue
divided by the number of available rooms.
PPHE Hotel Group
PPHE Hotel Group
Annual Report and Accounts 2024
Annual Report and Accounts 2024
218
219
Strategic Report
Corporate Governance
Financial Statements
Appendices
Contacts
Directors
Ken Bradley
(Non-Executive Chairman)
Boris lvesha
(President & Chief Executive Officer)
Greg Hegarty
(Co-Chief Executive Officer)
Daniel Kos
(Chief Financial Officer & Executive Director)
Nigel Keen
(Non-Executive Director & Senior Independent Director)
Stephanie Coxon
(Non-Executive Director)
Marcia Bakker
(Non-Executive Director)
Roni Hirsch
(Non-Executive Director)
PPHE Hotel Group
HNK Amsterdam Sloterdijk
Radarweg 60, Floor 9
1043 NT Amsterdam
The Netherlands
T: +31 (0)20 717 8600
E: info@pphe.com
E: dkos@pphe.com
Contacts
Greg Hegarty
(Co-Chief Executive Officer)
Daniel Kos
(Chief Financial Officer & Executive Director)
Inbar Zilberman
(Chief Corporate & Legal Officer)
Robert Henke
(Executive Vice President Commercial Affairs)
Administrator
Suntera Global
1st and 2nd Floors
Elizabeth House
Les Ruettes Brayes
St. Peter Port
Guernsey GY1 1EW
Channel lslands
Auditors to the Company and reporting accountants
Brightman Almagor Zohar & Co (Deloitte)
1 Azrieli Center
P.O.B. 16593
Tel Aviv, 6701101
Israel
Legal advisers to the Company as to Guernsey law
Carey Olsen (Guernsey) LLP
Carey House
P.O. Box 98
Les Banques
St. Peter Port
Guernsey GY1 4BZ
Channel lslands
Registered Office
1st and 2nd Floors
Elizabeth House
Les Ruettes Brayes
St. Peter Port
Guernsey GY1 1EW
Channel lslands
Registrar
MUFG Corporate Markets (Guernsey) Limited
Mont Crevelt House
Bulwer Avenue
St. Sampson
Guernsey GY2 4LH
Channel Islands
Company Secretary
Suntera Limited
1st and 2nd Floors
Elizabeth House
Les Ruettes Brayes
St. Peter Port
Guernsey GY1 1EW
Channel lslands
Financial advisers and brokers
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London E14 5JP
United Kingdom
Jefferies International Limited
100 Bishopsgate,
London EC2N 4JL,
United Kingdom
Investec Plc
30 Gresham Street
London EC2V 7QP
United Kingdom
Public relations
Hudson Sandler LLP
25 Charterhouse Square
London EC1M 6AE
United Kingdom
Company websites
pphe.com
arenahospitalitygroup.com
For reservations
radissonhotels.com
parkplaza.com
artotel.com
arenahotels.com
arenacampsites.com
Strategic partner
radissonhotelgroup.com
Forward-looking statements
This document may contain certain ‘forward-looking statements’ which reflect the Company’s and/or the
Directors’ current views with respect to financial performance, business strategy and future plans, both with
respect to the Group and the sectors and industries in which the Group operates. Statements which include
the words ‘expects’, ‘intends’, ‘plans’, ‘believes’, ‘projects’, ‘anticipates’, ‘will’, ‘targets’, ‘aims’, ‘may’, ‘would’, ‘could’,
‘continue’ and similar statements are of a future or forward-looking nature. All forward-looking statements
address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could
cause the Group’s actual results to differ materially from those indicated in these statements. Any forward-looking
statements in this document reflect the Group’s current views with respect to future events and are subject
to risks, uncertainties and assumptions relating to the Group’s operations, results of operations and growth
strategy. These forward-looking statements speak only as of the date on which they are made. Subject to any
legal or regulatory obligations, the Company undertakes no obligation publicly to update or review or revise
any forward-looking statement, whether as a result of new information, future developments or otherwise.
All subsequent written and oral forward-looking statements attributable to the Group or individuals acting
on behalf of the Group are expressly qualified in their entirety by this paragraph. Nothing in this document
should be considered as a profit forecast.
Consultancy, design and production
www.luminous.co.uk
Please see our Annual Report site for more information
ar24.pphe.com
PPHE Hotel Group
Annual Report and Accounts 2024
220
PPHE Hotel Group
HNK Amsterdam Sloterdijk
Radarweg 60, Floor 9
1043 NT Amsterdam, The Netherlands
T: +31 (0)20 717 8600
E: info@pphe.com
pphe.com