Dalata Hotel Group has launched a strategic review to explore options, including a potential sale of the company.
The review has been launched as the company today reported record revenue for 2024 of €652.2 million, up 7.3 per cent year-on-year and adjusted ebitda of €234.5 million, up 5.1 per cent on the year prior.
The board noted that while Dalata offers a attractive investment proposition - a well-invested portfolio of hotel properties in central locations, two well-established growing brands, a strong cashflow generation and a clear growth strategy – the group faces structural challenges including its relatively small scale in a public market context, its relatively concentrated shareholder register, a constrained capital base and a share price which doesn’t accurately reflect Dalata’s fundamentals.
As a result, the company is exploring opportunities to boost value including a sale. However, it notes that it is not currently in discussions with any potential buyers.
Dalata’s portfolio includes 30 owned hotels which are valued at €1.7 billion including assets under construction as well as 22 leased hotels the majority of which are on long term institutional lease agreements with a weighted average lease length of 29 years and rent cover of 1.7x. The company also operates three managed hotels.
Dalata has appointed Rothschild & Co as financial adviser in connection with the strategic review.
What they said
John Hennessy, Dalata chairman said: “The board is unanimous in the view that the key to achieving our vision for 2030 is the availability of capital; and that the share price does not reflect the underlying value of the company. We believe that now is the right time to undertake a rigorous and formal strategic review, which will consider options to increase access to capital and also enhance shareholder value.”
Dermot Crowley, Dalata chief executive officer added: “Our 2030 Vision strategy sets an exciting goal to have 21,000 rooms either operational or under construction by 2030. We have an excellent management platform in place to deliver this strategy but access to capital is essential to achieve our vision. A thorough strategic review will enable us to assess available options to increase our access to capital and enhance shareholder value.”