30th Apr 2026 09:30
(Alliance News) - Whitbread PLC on Thursday unveiled a new five-year plan, which it said will result in a "material step up in margins and returns" as it reported a drop in annual pretax profit.
In response, shares in the Dunstable, Bedfordshire-based hotel and restaurant operator fell 6.7% to 2,225.00 pence each in London on Thursday. The wider FTSE 100 was up 0.4%.
Whitbread said pretax profit fell 19% to GBP298 million in the 52 weeks to February from GBP368 million the year prior, on flat revenue at GBP2.92 billion.
Revenue reflected positive growth in UK and Germany accommodation sales, offset by the expected lower food and beverage revenue as a result of the 'Accelerating Growth Plan', part of Whitbread's existing strategy.
Profitability was dented by high cost inflation and interest costs.
Adjusted pretax profit was flat at GBP483 million with adjusted basic earnings per share of 208.5 pence, up 7.1% from 194.6p.
The total dividend was held at 97.0p per share, after Whitbread proposed an unchanged final payout of 60.6p per share.
Premier Inn UK total accommodation sales and revenue per available room both increased by 1% on-year, reflecting a return to market growth from the second quarter. But UK Food & Beverage sales fell 8%. Premier Inn Germany sales grew by 13%.
Whitbread also unveiled a new five-year plan following a strategic review which it said will result in a material step up in margins and returns by financial 2031.
Chief Executive Dominic Paul said: "In light of significant cost increases in the form of business rates and national insurance, as well as the implied market discount to our inherent value, we've looked hard at the options open to us to maximise value creation over the medium and long-term."
The plan includes a reallocation of capital to fund a proposed extension of the Accelerating Growth Plan.
This involves replacing all remaining branded restaurants, a reduced capital programme in the UK and Germany, higher cost savings and the sale of freehold properties.
Whitbread owns restaurant chains including Beefeater, Bar + Block and Brewers Fayre.
CEO Paul said Whitbread's model is the "right one" but added "we can improve our approach."
"We will refocus our capital spend and recycle more of our freehold real estate, driving increased margins and returns, reducing our capital intensity and increasing cash returns for shareholders," he commented.
In financial 2027, Whitbread said the extension of the 'AGP' will reduce total F&B sales by GBP140 million to GBP160 million and there will be a GBP40 million reduction in profits.
This will more than offset positive progress from the original AGP, resulting in a net GBP10 million reduction to profit.
By financial 2031, Whitbread said the plan will deliver GBP275 million of incremental adjusted pretax profit contribution, reduce net capex by GBP1 billion, with growth capex to be funded through the sale of GBP1.5 billion of freehold properties.
It will increase return on capital employed by 500 basis points, and generate GBP2 billion of free cash flow available for cash returns to shareholders, Whitbread added.
Whitbread still plans to increase the number of hotel rooms it has open to 96,000 by financial 2031 from the current around 86,600, with a longer-term aspiration of 125,000 rooms.
Whitbread said the measures are expected to result in 3,800 job losses out of a total UK and
Ireland workforce of around 30,000.
Looking ahead, Whitbread said its forward booked position is ahead of last year and "we continue to see positive trading momentum."
But it flagged "limited visibility of short-term market demand and inflation", pointing to the Middle East crisis.
By Jeremy Cutler, Alliance News reporter
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