27th Oct 2020 08:55
(Alliance News) - Hospitality company Whitbread PLC on Tuesday said it will focus on long-term returns following the expected slump in performance in the first half of its financial year due to closures in the hospitality sector brought on by Covid-19 restrictions.
The Dunstable, England-based company swung to a pretax loss in the six months to August 27 of GBP724.7 million from a profit of GBP219.9 million a prior year's six months to August 29.
Revenue was down 77% to GBP250.8 million from GBP1.08 billion a year before.
The Premier Inn hotel chain owner said its performance in the first half was in-line with expectations and reflects the closure of the vast majority of its businesses during the lockdown period from the end of March.
Whitbread did not declare an interim dividend, down from 32.7 pence each a year prior. The company said it hopes to return to paying dividends again following the normalisation of the group's financial position and performance.
Whitbread said it has "rapidly reopened" its estate, with 97% of UK hotels reopened by the end of July. In Germany the company has more than trebled its open hotel network to 21 hotels from 6 at the beginning of the year.
Whitbread's net cash position at August 27, was at GBP196.4 million, swinging from GBP77.5 million debt a year before.
Net debt including lease liabilities widened to GBP2.77 billion from GBP2.58 billion a year prior.
Whitbread said it has 21 hotels open in Germany compared to 6 open at the start of the half year.
Going forward, Whitebread said: "Given the fast-changing nature of the Covid-19 environment in which we are operating, and increased levels of local and regional lockdowns, near-term visibility remains limited. However, as the situation evolves, Premier Inn remains well-placed to capitalise on the enhanced structural growth opportunities that will exist, driving attractive returns on investment in the long-term."
Chief Executive Alison Brittain added: "Our financial flexibility and resilience, combined with a strong balance sheet, give us the ability and the confidence to invest with discipline and focus on strong long-term returns. We will be well placed to enhance our market leadership position even further in the UK, and accelerate our growth in Germany, supporting our guests and teams and driving long-term value for all our stakeholders."
Whitbread shares were up 0.8% at 2,261.00 pence each in London on Tuesday morning.
By Greg Roxburgh; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Whitbread