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Dalata, the largest hotel operator in the State, will publish results for the first half of the year on Tuesday, and investors will be keen to see if the company – as expected – manages to shrug off an industry slowdown in revenue due to a flood of new rooms.
Davy Group is forecasting revenue growth of 13 per cent to €205 million, and earnings before interest, taxes, depreciation, and amortisation growth of 18 per cent to €59 million.
Those figures would represent an impressive return after the Dublin market expanded by 1,000 rooms in the past 12 months, which represented a rise of 4.7 per cent versus the prior year.
That contributed to revenue per available room (RevPar) – a key metric in the hotel business which assesses a hotel’s ability to fill its available rooms at an average rate – falling by 5.9 per cent year-on-year on an industry-wide basis in May.
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It was the second successive month in which RevPar declined, having slipped 2.7 per cent in April. Average Daily Rate, another key metric, was 5 per cent lower in the month, according to data from STR.
Another key issue for Dalata’s shareholders will be an update on the Dublin hotel room supply given the 5,000 new rooms Savills forecast between 2019 to 2021 are largely under construction.
Furthermore, there ought to be some more clarity on how it is coping with the increase in hospitality VAT, and whether the additional costs have been passed on to the consumer. There should also be an update on Dalata’s UK expansion pipeline.
All eyes on the exchequer figures as budget approaches
With just a little over five weeks to go to Budget 2020 and less than two months left to Brexit, the latest snapshot of the State’s economy will be crystallised with August exchequer returns to be published on Tuesday.
The figures for July showed increased revenues from taxes on consumer spending and companies’ profits contribute to a near €900 million Government surplus for the first seven months to the end of July.
The State collected €36 billion in taxes and other revenue in the first seven months of the year and spent €35.113 billion. That left the State with an €896 million surplus for the period, a turnaround from the €277 million deficit it had at the end of July 2018.
Minister for Finance Paschal Donohoe will be hoping Tuesday’s figures contain no nasty surprises, particularly given that his spending plans have already been the subject of some criticism by spending watchdogs.
Other indicators to keep an eye on are the Markit Purchasing Managers’ Index (PMI) figures for August in the manufacturing and services sectors, which are to be published on Monday and Wednesday respectively.
Both sets of figures will give an indicator as to how the two industries are faring with all the Brexit uncertainty.
For Your Diary
MONDAY
Results: Bidvest (Q4).
Indicators: Irish PMI manufacturing (Aug).
TUESDAY
Results: Cairn Homes (Q2); Dalata (H1); DS Smith (Q1); Iliad (Q2); Mainstay Medical International (Q2); Malin (H1); Restaurant Group (Q2).
Indicators: Irish Exchequer returns (Aug) and ILO unemployment rate (Aug); UK construction PMI (Aug), retail sales (Aug) and data on mergers and acquisitions (Q2).
WEDNESDAY
Results: Alimentation Couche-Tard (Q2); American Eagle Outfitters (Q2); Barratt Developments; Dassault Aviation (H1); Halfords trading update; IQE (Q2); Palo Alto Networks (Q2).
Meetings: Development Securities AGM; Logitech AGM.
Indicators: Irish PMI services (Aug).
Other: Decathlon break ground on their first Irish store in Ballymun; British House of Commons international trade select committee discusses plan for free ports.
THURSDAY
Results: Altran Tech (Q2); Barnes & Noble (Q1); DocuSign (Q2); Go-Ahead Group (Q2); Korn Ferry (Q2); Melrose (H1); PPHE Hotels (H1); Redrow (FY); Safran (H1).
Meetings: Carpetright (AGM); Dixons Carphone (AGM); Spark Therapeutics AGM.
Indicators: Irish industrial production (Jul) and live register (Aug); UK regional GDP.
Other: Norwegian Air Shuttle August traffic stats.
FRIDAY
Results: Navistar (Q3); SIG (Q2).
Meetings: Greene King (AGM); The Berkeley Group AGM.
Indicators: UK Halifax house price survey (Aug).
Other: Traffic stats for IAG, including Aer Lingus.