- Q3 UK Premier Inn sales up 11%
- Momentum continues into Q4 with UK sales up 12%
- Germany expected to break-even in 2024
Premier Inn-owner Whitbread (WTB) notched-up strong third quarter trading with UK accommodation sales 11% up year-on-year and revenue per available room 9% ahead, while food and beverage sales grew by 6%.
The company said strong trading has continued into the final quarter with UK accommodation sales up 12% year-on-year and revenue per available room up 10%.
Investors welcomed the continued growth momentum and marked the shares 1.7% higher to £36.06, taking gains over the last year to 27% compared with a 1% fall in the FTSE 100.
WHAT DID WHITBREAD SAY?
CEO Dominic Paul commented: ‘In the UK, we continued to see robust demand for our hotels driving high levels of occupancy and strong pricing.
‘Our focus on delivering a high-quality proposition at a great price meant that Premier Inn UK has continued to outperform the M&E market.
‘In Germany, we performed well in what is an important trading period with a large number of leisure and business events; we remain on course to break-even on a run-rate basis during calendar year 2024.’
CONFIDENT OUTLOOK
Looking ahead, Whitbread expects UK cost inflation of between 3% and 4% to be partially offset by operational efficiency savings totalling £40 million to £50 million.
In Germany, the firm said it is on track to break-even on a run-rate basis during calendar 2024.
‘With a positive forward booked position in the UK, a favourable supply environment, a clear commercial plan and cost efficiencies, we remain confident in the FY25 outlook’, the company added.
EXPERT VIEW
Shore Capital leisure analyst Greg Johnson maintained his 2024 pre-tax profit forecast at circa £560 million, representing annual growth of 35%.
Johnson estimates the increase in the national living wage from April could add £40 million to the Whitbread cost base.
‘The group is targeting £40 million to £50 million of efficiencies (circa 2.5%), which is circa £10 million to £20 million higher than our prior assumptions. We expect the group will need circa 3% like-for-like revenue growth to offset cost inflation, noting the positive current trading and a continued resilient consumer heading into calendar year 2024.
‘For full year 2025, we see modest growth in pre-tax profit year-on-year, primarily from reduced losses in Germany, with the UK broadly flat as like-for-like revenue and cost efficiencies offset cost inflationary pressures’, said Johnson.
