Despite stagnant revenue, Whitbread, the owner of Premier Inn and Beefeater, has increased its interim dividend and announced a share buyback. The hotel and restaurant chain informed markets this morning that revenue remained steady year on year in the six months ending 29 August at £1.57bn.
It has boosted its interim dividend by seven per cent to 36.4p per share and declared a £100m share buyback to be finalised by 1 May 2025. Shares saw an almost five per cent increase in early trades, as reported by City AM.
Adjusted earnings before interest, tax, depreciation and amortisation and restructuring costs (EBITDAR) dropped by three per cent to £611m, while adjusted profit before tax decreased 13 per cent to £340m. Profit after tax declined by 25 per cent, from £293m in the first half of last year to £220m.
Sales of Premier Inn hotel rooms in the UK, which makeup 12 per cent of the UK’s hotel room market, grew by one per cent, while food and beverage sales fell by seven per cent.
Earlier this year, Whitbread offloaded several of its worst-performing pubs and restaurants. Whitbread characterised the results as a “robust performance in a slightly softer market.”
A 22 per cent increase in accommodation sales in Germany partially offset UK performance.
Dominic Paul, Whitbread chief executive, stated: “We are making excellent progress with our plans and over the next five years are set to deliver a step change in our performance which will fund significant returns to shareholders.”
“In the UK… we are determined to build on our significant outperformance since the pandemic and whilst the market has been slightly softer than last year, we remain on course to grow our UK returns substantially over the medium-term whilst continuing to deliver for our customers, as evidenced by our high guest scores.”
“In Germany, we are really encouraged by our progress to date. Our trading performance and the progressive maturity of our estate mean we are set to reach breakeven on a run-rate basis later this year.”