DAVY VIEW

Dalata issued solid H124 results with revenue up 6% to €302m and aEBITDA up 4% year-on-year (yoy) to €107.6m (Davyf €110.5m). This is a good outcome in the context of a soft start to the year in Dublin as new room supply, the VAT increase and some wider domestic weakness impacted trading. The Dalata Dublin hotels outperformed, with Jan-Jul RevPAR down 4.6% versus the Dublin market down 5.4%. The CEO remains very confident on Dalata’s future growth prospects. It opened four hotels in the UK this summer, increasing the UK estate by 20% since December 2023. The balance sheet remains in a strong position with bank net debt/EBITDA after rent of 1.3x; as a result, it has announced a buyback of €30m and an interim dividend of 4.1c (c.2.8% yield on a full year basis). The outlook references lower-than-expected trading due to more measured consumer spending from domestic customers. At first glance, we will lower our FY24 aEBITDA forecast by c.5% to reflect lower-than-expected RevPAR and the related margin impact.