DAVY VIEW

Dalata has issued a trading statement for H223, concluding another strong year. FY23 aEBITDA has been guided to >€220m, up c.20% year-on-year (yoy). At first glance, we will upgrade our full year forecasts by another 2-3% – meaning we will have upgraded our FY23 forecasts by c.30% in the year to date. During 2023, Dalata undertook four acquisitions (initially deploying c.€160m and adding c.6% rooms); despite this, we expect FY23 bank net debt/EBITDA post rent to be <1.3x (c.4x post IFRS 16). We continue to view Dalata as a top pick given the combination of: (i) consistent execution by a proven management team; (ii) a well-invested estate; (iii) balance sheet optionality; and (iv) a highly attractive valuation (10.4x P/E, 8x EV/EBITDA and a 13% FCF yield).