Whitbread shares rose on Tuesday following the release of a very respectable set of results for the crucial summer trading period.
Whitbread reported sales of £661.1m for the first half of 2021 which was significantly above the £250.8mm recorded in the first half of last year.
Whitbread were only able to accept business customers until 17th May this year meaning although revenue was much stronger than last year, it was 39% below pre-pandmeic levels.
Whitbread shares gained over 3% on Tuesday morning following the release of the revenue figures.
“It’s taken a while for Premier Inn owner Whitbread to regain momentum, but with trading ahead of pre-pandemic levels over the summer holidays and well ahead of the wider market the group looks well placed going into 2022. Management have gone so far as to say they think revenues may fully recover this financial year,” said Nicholas Hyett, Equity Analyst at Hargreaves Lansdown.
“The pandemic has likely seen smaller operators forced to close, creating a gap into which Whitbread can expand in the UK. Meanwhile expansion in Germany is gathering speed with a pipeline that has the potential to more than double the current active estate. However current bookings in Germany remain low and the group has work to do in improving its brand visibility.”
Leisure demand returns
Whitbread outlined where they saw demand recover and said they were confident in
“Whitbread traded significantly ahead of the market in the UK during the first half of the year, with our regional hotels trading ahead of pre-COVID-19 levels in the last six weeks of the half,” said Alison Brittain, Whitbread Chief Executive Officer.
“This strong performance has continued into the second half, with sustained high levels of leisure demand and resilient demand from tradespeople. Whilst some uncertainty remains over the speed and timing of the market recovery for office-based and international demand and the evolution of the pandemic in the winter months, we believe that UK like-for-like RevPAR run rates have the potential to reach full recovery in at some point during 2022.
“The operating environment during the summer and into autumn has been challenging largely as a result of our very high occupancy levels, market-wide supply chain issues and a tighter labour supply in the hospitality sector. Although we are not immune from these challenges, we are well placed to respond. Our £100m efficiency programme is well underway and we are “investing to win” in our teams, our hotels and our marketing, in order to continue to grow our market share as demand recovers and as our competitors continue to be under pressure.”
“In Germany, we are well on the way to building a business of scale with a growing national presence. Our open and committed hotel network now stands at 73 hotels, and we continue to look for opportunities to grow our footprint at pace both organically and through acquisitions. The budget hotel market is recovering ahead of the overall market and we are seeing growing demand and occupancy levels in our open hotels, alongside encouraging customer scores.”