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“We are initiating our coverage on International Hotel Investments p.l.c. with a Hold recommendation and a 12-month price target of €0.83. The Group’s diversified property portfolio was key in enabling it to grow its EBITDA year-on-year, despite the breakout of the Libyan Civil War. The capital intensive industry, which IHI operates in, coupled with the eminent financing costs incurred on its leveraged position is impinging on the Group’s profitability (LTM 2019: FCF/Total Assets 1.4%). This consequently has restricted the distribution of dividends and dampened the share price growth potential. Nonetheless, the Group has put one of its properties on sale, and should the deal go through, it will enable it to crystallise the capital appreciation of this property and reduce the overall depreciation costs. Management indicated a potential special dividend following the sale of this property. This may indicate a new trend whereby IHI cash-in the value of its owned properties

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