DAVY VIEW

Dalata has updated on year-to-date (ytd) trading. The group highlights another acceleration in RevPAR and now expects H1 RevPAR to be 29% ahead of H119 (+28% January-April) and H123 aEBTIDA to be >€100m (Davyf: €98m). Importantly, rhetoric around margin recovery is also encouraging. The combination of better RevPAR than we anticipated, positive comments on margin recovery and the H2 contribution from the recently acquired 89- bed Clayton London Wall Hotel means that at first glance we will upgrade FY23 aEBITDA by almost 10% This is the third time we have upgraded forecasts ytd. We would also note that despite €112m acquisition spend in 2023, bank net debt to EBITDA after rent will be <1.2x at year-end. We remain very positive on the Dalata investment case given: (i) strong underlying momentum; (ii) its modern, well-invested estate; (iii) excellent management; (iv) attractive valuation; and (v) balance sheet optionality.