Whitbread Recreation Group Reports 40% Decrease in Annual Profit

Whitbread, the leisure company behind Premier Inn hotels, attributed weak growth to weak UK hotel demand and Brexit uncertainties.

The company FTSE 100 said Tuesday that although its number of rooms has been increased to more than 76,000 and 10,000 more are under construction, occupancy rates have declined slightly. Revenues for the year ended February 28th increased £ 2bn to £ 2.05bn, while pretax profits increased 1.2% from £ 432m to 438m. million pounds sterling.

Excluding the effects of the Costa deal, pre-tax profit decreased by almost 40% from 426 to 260 million pounds sterling.

Analysts had warned of Whitbread's potential to underperform the sector due to its reliance on regional hotels, the high number of openings and slowing demand in the retail sector. budget hotels. In April, Morgan Stanley badysts downgraded their rating in Whitbread, despite a "robust" efficiency program of saving £ 40m a year. According to their forecasts, the profits for the coming year for 2020 are expected to fall an additional 6% to 415 million pounds sterling.

On the proceeds of the sale of Costa, Whitbread confirmed that a planned £ 2 billion stock buyback program would be implemented following a public tender offer. purchase to shareholders in June.

The share price of the leisure group has increased since the sale in August, peaking for the last 12 months of £ 51.14 this month.

The company is hoping for growth in Germany, which it says has a decade-old hotel sector lagging behind the UK, as the country undergoes a structural shift from independent hotels to branded hotels. Whitbread opened its second German hotel in Hamburg this year and announced the availability of an additional 7,100 rooms.

German investment losses are expected to increase from £ 8m this year to £ 12m in 2020, according to the hotel group.

Alison Brittain, Executive Director, said the demand from hotels in the UK has declined.

"This weakness has been accentuated until March and April, especially in the regional business market," she said, "coinciding with a period of acute political and economic uncertainty at the time. United Kingdom".