Davy Stockbrokers has cut Dalata Hotel Group's projected revenue per available room (RevPAR) for 2021 at the group's Dublin hotels by 6% to €111.90, reflecting a "more conservative outlook given macro uncertainties from globally inverted yield curves and Brexit".
In a new report published by Davy, the stockbroker noted that its RevPAR projection for Dalata for 2021 is 2% lower than that achieved by the group last year, as reported by The Irish Independent.
Davy stated that this year's RevPAR figure has been impacted by the increase in the tourism sector's VAT rate from 9% to 13.5%.
The stockbroker also stated that Dalata's share price, which currently gives the group a market capitalisation of just below €1 billion, does not reflect its strong cash generation.
Free Cashflow
The Irish Independent quotes Davy as saying, "We estimate that Dalata will have grown its free cashflow 12-fold, from €8 million in 2014 to just over €95 million in 2019.
"This growth far exceeds the peer group, and Dalata remains a young company at an early stage of its growth curve."
According to Davy, Dalata's free cashflow yield has moved to a stage at which it is more than 450 basis points higher than each of its domestic and European peers, and this proves a "significant investment opportunity".
© 2019 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.
