Flat bookings at Premier Inn across the UK led to its parent – the services industry conglomerate Whitbread – posting smaller first half profits and revenues this year.
Whitbread’s latest accounts show a 2% drop in revenue to £1.54bn, for the six months to the end of August; while adjusted pre-tax profits fell by 7%, year-on-year, to £316m.
Premier Inn is Whitbread’s biggest brand – with operations across the UK, Ireland and Germany – but a lack of demand growth in its home market held back progress in the first half of its current financial year. However, management remains upbeat about the budget hotel chain’s future prospects.
Dominic Paul, Whitbread Chief Executive, said: “In the UK, with a return to market growth, we sustained our outperformance versus the market through the strength of our guest proposition and commercial programme. We are making strong progress on our Accelerating Growth Plan which, together with our committed pipeline of both Premier Inn and ‘hub by Premier Inn’ rooms, means we remain on track to reach at least 98,000 open rooms by FY30, extending our position as the clear market leader.
“In Germany, we maintained our outperformance versus the M&E market, having traded well in what was a softer than expected demand environment over the summer. We are continuing to grow our committed pipeline and having agreed the acquisition of eight hotels in prime city-centre locations, we are building a business of real scale. Our growing market share, together with the increasing maturity of our estate, means that we remain confident in fulfilling our ambition of becoming the country’s number one hotel brand, delivering significant revenue and profit growth.
Mr Paul added: “We remain focused on disciplined capital allocation and increasing financial returns. Having completed £99m of sale and leasebacks at attractive yields and with the updated valuation of our estate, we are on track to recycle £1bn by FY30 to fund future high-returning growth, such as our Accelerating Growth Plan, and increase our return on capital employed.
“We’re making great progress against our strategic priorities and our Five-Year Plan is firmly on track to deliver a step change in profits, margins, and returns. We remain confident in returning £2bn to shareholders through share buy-backs and dividends and we are on track to complete the previously announced £250m share buy-back by the time of our FY26 results.”
