Whitbread mild, not bitter, despite share price fall
Bedfordshire-based hotel and leisure business Whitbread plc suffered a share price fall of more than 100p after revealing a 71.5 per cent drop in statutory revenue from more than £2 billion to £589.4 million in FY21.
Adjusted profit before tax of £358.3m the previous year turned to a loss of £635.1m this time. The company took the opportunity to double its cash to more than £1.25bn during the lockdowns so believes it is well placed to fight back as the Covid situation eases.
CEO Alison Brittain described the last financial year as “one of the most challenging in our 279-year-old history,” but she remains upbeat about the future. She said: “Our ability to navigate through this period, with the advantages of our unique operating model, the strength of the Premier Inn brand, and our market-leading direct distribution model, has enabled us to continue to deliver strong market share gains in the UK.
“Our exposure to the faster recovering budget sector, our resilient customer mix, and the enhanced structural opportunities that the COVID crisis has created, positions us well to continue this outperformance.
“The vaccination programme in the UK means we can look forward to the planned relaxation of Government restrictions as we move into summer, with the first major milestone being the return of leisure guests to our hotels, and the full reopening of restaurants from 17 May.
“We expect a significant bounce in leisure demand in our tourist locations during the summer, followed by a gradual recovery in business and event-driven leisure demand.
“We hold a uniquely advantaged position in the UK market as the largest operator with the strongest brand, and we will continue to invest in our estate to enhance our customer proposition.
“Our investment in marketing includes the first major above-the-line Premier Inn marketing campaign for three years, branded ‘Rest Easy.”
“In Germany, we remain confident of the opportunity to replicate our model in the UK and have materially grown our estate from six hotels at the start of the year to 30 operational hotels currently, and a total open and committed pipeline of 72 hotels, representing a nation-wide footprint with a presence in most major towns and cities.
“We continue to take actions to ensure that we exit the crisis as a leaner, stronger and more resilient business, including commencing the next three-year phase of our efficiency programme that will target £100m of cost savings.
“Combined with our financial flexibility and strong balance sheet, this gives us the ability and the confidence to invest with discipline and focus on strong long-term returns.
“We are well-placed to enhance our market leadership position even further in the UK, and accelerate our growth in Germany, capitalising on the enhanced structural growth opportunities that will exist and driving long-term value for all our stakeholders.”