Yahoo Finance Premier Inn owner sees demand bounce back as losses narrow
Premier Inn's owner Whitbread (WTB.L) said it had seen a stronger recovery than anticipated as it published interim results on Tuesday morning in London, with a surge in demand in the UK.
Losses narrowed, while it said there is potential for a full recovery in its UK hotels in 2022.
The group said that expansion in Germany is gathering speed with a pipeline that has the potential to more than double the current active estate.
"The pandemic has likely seen smaller operators forced to close, creating a gap into which Whitbread can expand in the UK," said Nicholas Hyett, equity analyst at Hargreaves Lansdown, noting that current bookings in Germany remain low and the group has work to do in improving its brand visibility.
Revenues in the first half hit £661.1m, 39% below pre-pandemic levels, but well ahead of the £250.8m reported last year.
The decline reflects the fact only essential business guests were permitted until 17 May, and other restrictions were not fully lifted until 19 July. Accommodation sales grew 12.3 percentage points ahead of the wider midscale and economy market during the half.
The group also reported an underlying loss of £56.6m, an improvement on the £367.4m loss reported last year, but well below the £235.6m profit reported pre-pandemic. The losses reflect lower revenue versus the relatively fixed nature of the cost base.
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Whitbread’s lenders continue to forbid the payment of dividends while certain conditions have been relaxed. As things stand, that will continue until at least March 2023.
The group also said it is spending about £23m ($31.63m) to increase salaries and pay one-off bonuses as labour shortages persist across the industry.
Shares gained 1.4% in early trade following the report.
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