Premier Inn demand sees Whitbread FY profits surge

25th Apr 2023 07:24

(Sharecast News) - Premier Inn owner Whitbread on Tuesday said full-year earnings had soared above pre-pandemic levels on the back of strong demand for hotel rooms after the lifting of Covid-19 travel restrictions and unveiled a £300m share buyback.

The company, which also owns the Beefeater steakhouse chain, reported pre-tax profit of £375m, up from £58m a year ago and £218m in 2020 before the pandemic shut down the leisure and hospitality sectors.

A final dividend of 49.8p, or £100m was declared for a total of 74.2p, up 114%.

Whitbread said trading in the seven weeks to April 20 had remained buoyant with strong demand in both London and the regions.

Total UK sales were 17% ahead of the same period last year, with revenue per available room (RevPAR) - a key metric - of £60.98 and representing a continued RevPAR outperformance versus the wider market of £6.08. Occupancy in the period was 81% and average room rate was £74.94.

Total UK food and beverage sales were up 10% vs the same period in full-year 2023, reflecting softer trading in the base year as well as a number of commercial initiatives put in place since the start of the year.

In Germany, demand picked up steadily during the first quarter helped by a number of trade fairs and rising business and leisure volumes. Total accommodation sales were 140% ahead of the same period in FY23 and RevPAR was €47.94 with occupancy at 61%.

"Despite inflationary pressures across the cost base and growth in the estate, margins in the UK hotels division were well ahead of last year and only slightly below those seen in 2020. Whitbread has got off to a strong start in the current year and its confidence is reflected in the increase in pay outs to shareholders," said Hargreaves Lansdown analyst Derren Nathan.

Reporting by Frank Prenesti for Sharecast.com