Topic: Yesterday, MHP released an ad-hoc stating that FY24 EBITDA is expected significantly stronger than previously anticipated. Moreover, management hinted for continuous portfolio expansion. In detail:
For FY24, management now expects an EBITDA in the range of € 10.0-10.5m. This represents a 14% beat at mid-point compared to the old guidance of around € 9m, which the company put out in December. Given the implied FY24e sales (derived from quarterly hotel performance updates) of € 160m, this implies a margin of 6.3%, marking a steep 5.5pp yoy improvement.
In our view, this is a strong confirmation of the operating strength of MHP's business model, which is seen to thrive further on the back of strong ADR's and solid occupancy rates. It also shows, that the company's clear focus on the premium- and luxury-segment is paying off, as we observe a continuous outperformance compared to midscale and economy hotels.
Against this backdrop, management also confirmed the FY25 guidance of € 180m sales (eNuW: € 185m) and € 15m EBITDA (eNuW: € 15.0m/ € 10m adj. EBITDA excl. key-money payments), implying a 13% yoy top-line increase and an 8.3% EBITDA margin.
Strategic expansion. In a corporate news following the ad-hoc, management stated that it is currently reviewing the increase of existing financing capabilities for further growth investments given the appealing opportunities provided by the ongoing consolidation of the European and especially DACH hotel market. In our view, expanding the portfolio during the current window of opportunity is absolutely sensible. Especially the numerous prominent insolvencies that we observed recently should put market leading players like MHP in a strong position to take over and reposition hotels in central locations of the company's key markets. Mind you, that we do not include any portfolio expansion in our model. Hence, every hotel added is providing upside to our estimates.
On this basis as well as given the currently undemanding valuation (5.3x EV/adj. EBITDA FY25e), we reiterate BUY with an unchanged PT of € 3.00 based on DCF.
ISIN: DE000A3E5C24
