Dalata Hotel Group Reports Mixed 2024 Results: Revenue Up, Profits Down
Why we think this is bad
While Dalata Hotel Group saw a 7.3% increase in revenue to €652.2 million, profitability metrics declined significantly. Profit before tax fell by 13.6% to €91.2 million, and basic earnings per share dropped 12.1% to 35.5 cents. The company's margins also contracted, with the 'like for like' Hotel EBITDAR margin decreasing from 42.3% to 40.9%. These declines in profitability, despite revenue growth, indicate challenges in cost management, particularly with rising payroll expenses. However, the company maintains a strong financial position with €364.6 million in cash and undrawn loan facilities, and has successfully refinanced its banking facilities. The outlook remains cautiously positive, with expectations of improved RevPAR in Q1 2025, but ongoing cost pressures are a concern.
Key Points
- Revenue increased 7.3% to €652.2 million
- Profit before tax decreased 13.6% to €91.2 million
- Basic EPS fell 12.1% to 35.5 cents
- 'Like for like' Hotel EBITDAR margin decreased from 42.3% to 40.9%
- Significant payroll cost increases: 12.4% in Ireland, 9.8% in UK
- Strong financial position with €364.6 million in cash and undrawn facilities
- Successful refinancing of banking facilities completed
- RevPAR expected to be 2.5% ahead of 2024 levels for Q1 2025
- Targeting 21,000 rooms by 2030, up from current 11,990 rooms
Summary
Dalata Hotel Group's 2024 results present a mixed picture. Revenue increased by 7.3% to €652.2 million, driven by portfolio expansion and a 1.0% increase in 'like for like' RevPAR. However, profitability metrics declined, with profit before tax falling 13.6% to €91.2 million and basic EPS dropping 12.1% to 35.5 cents. The company faced significant cost pressures, particularly in payroll, with statutory wage increases of 12.4% in Ireland and 9.8% in the UK. These cost increases led to margin contraction, with the 'like for like' Hotel EBITDAR margin decreasing from 42.3% to 40.9%. On a positive note, Dalata maintains a strong financial position with €364.6 million in cash and undrawn loan facilities, and successfully refinanced its banking facilities. The company remains confident about future demand and expects RevPAR to be 2.5% ahead of 2024 levels for Q1 2025. However, ongoing cost pressures and the challenge of improving profitability in the face of rising expenses remain key concerns for investors.