Apr 30, 2019

Whitbread profits plunge as ‘political uncertainty’ bites

Whitbread said it was looking to international expansion and new concept hotels for long-term growth as it revealed a slide in profits amid an "Acute period of political and economic uncertainty in the UK". The FTSE 100 group behind Premier Inn hotels said on Tuesday that revenues for the 12 months to the end of February had risen to £2.05bn from £2bn a year earlier, as it reported its first-full year results since last year's £3.9bn sale of Costa Coffee to Coca-Cola. Statutory profit before tax dropped nearly 40 per cent to £260m. Excluding the effect of the Costa sale, profit before tax crept up 1.2 per cent to £438m. Whitbread said it had been hit by weakening demand for hotels, particularly from corporate customers in the UK regions. They forecast full-year pre-tax profits would decline a further 6 per cent in 2020 to £415m. However, Alison Brittain, chief executive, said it was "Way too early" to issue guidance beyond this year given the results "Coincided with the most acute period of uncertainty that we've experienced in our lifetime". Whitbread opened its second German hotel in Hamburg this year and said a further 7,100 rooms in the country were in the pipeline. Direct bookings account for 97 per cent of the hotel chain's business.

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