Action Hotels debut results show plenty of room to grow

7th Apr 2014 12:23

Maiden results from Middle East hotels group Action Hotels, which floated on AIM in December, were encouraging with revenues and earnings on the up. The company, which in March opened its sixth hotel, lifted revenue 5.4% to $29.8m, with average daily rate increased by 5.8% to $105 and revenue per available room up 8.9% to $81 reflecting strong occupancy and average room rate performance, it said. Action has opened five ibis hotels and one Holiday Inn, and by 2016 said it aims to have opened a further four Premier Inns, three ibis and one Staybridge, with funding secured.Chief Executive Alain Debare said: "2013 has been a transformational year for Action Hotels with our admission to AIM raising $50m before costs and the opening of our sixth hotel, Holiday Inn Seeb Muscat, our first hotel with Intercontinental Hotels Group."The new financial year has reportedly started well, with occupancy levels strong across the portfolio and encouraging growth in all key metrics. The newest hotel, Holiday Inn Seeb Muscat, is performing ahead of expectations.House broker FinnCap noted that the company was operating in an undersupplied market, with branded economy hotels accounting for only 22% of the Middle East, compared to 64% of the US market and 48% of Europe. "We forecast net asset value (NAV) to grow by 61% over the next three years and value the shares at our 2016E forecast NAV of 110p."OH