16th Jan 2025 09:09
(Alliance News) - Whitbread PLC on Thursday reported a mixed third quarter with sales falling in the company's core market of the UK, offsetting a strong showing in its growth market of Germany.
The Dunstable, Bedfordshire-based hotel and restaurant owner said sales were down 2% in the 13 weeks to November 28, or by 1% on a like-for-like basis.
UK sales fell 4%, or by 3% LFL, offsetting a better performance in Germany where sales climbed 19%, or 20% LFL.
In response, shares in Whitbread were 0.6% lower at 2,953.00 pence each in London on Thursday morning. The wider FTSE 100 index was 0.5% higher.
Group-wide food and beverage sales declined 12%, while accommodation sales rose 1%.
Food and beverage sales dropped 14% in the UK, reflecting an expected reduction as a result of Whitbread's 'accelerating growth plan'.
The accelerating growth plan, which was announced in April last year, will see the conversion of 112, and the sale of 126, branded restaurants as Whitbread plans to "unlock" 3,500 new accommodation room extensions to help it reach at least 97,000 open rooms in the UK by 2029.
Chief Executive Dominic Paul said the five-year plan is set to deliver incremental profit of at least GBP300 million by financial 2030 and release more than GBP2 billion for shareholders through a combination of dividends and share buy-backs.
"We are making good progress against our strategic priorities including our accelerating growth plan and cost efficiency programme, and we remain confident in our ability to deliver a step change in profits, margins and returns," he added.
Whitbread said guidance is unchanged for financial 2025, which runs to the end of February.
At Premier Inn UK, trading improved during the quarter, resulting in total accommodation sales broadly in line with last year and up 51% versus financial 2020. Revenue per available room was down 3% but up 35% versus 2020.
CEO Paul said that, whilst forward visibility in the UK remains "limited", the "favourable" supply backdrop, together with "our brand strength and commercial initiatives, means we are confident that we can continue to outperform the market".
Total accommodation sales were up 23% at Premier Inn Germany, in local currency.
Paul said the the German business remains on track to reach profitability on a run-rate basis this year.
In the six weeks to January 9, Whitbread said total UK accommodation sales were up 2% and total Germany accommodation sales up 37%.
Looking further ahead to financial 2026, the company expects gross UK cost inflation to be between 5% and 6%. Including efficiencies of GBP50 million, net UK cost inflation is expected to be between 2% and 3%.
Whitbread said there is no change to its 'accelerating growth plan' guidance and it expects to fully reverse the negative impact it will have on financial 2025 pretax profit of GBP20 million to GBP25 million.
By Jeremy Cutler, Alliance News reporter
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