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Whitbread asks landlords for 50% cut in rent

Whitbread, the owner of Premier Inn, has asked landlords for a 50% rent reduction amid the Coronavirus crisis.

As hotels were closed over lockdown, the group has suffered from a drop in revenues and large losses during the first half of 2020.

Whitbread also owns Beefeater and Brewers Fayre brands. Earlier this year, the company announced 6,000 job cuts.

In the six months ended 27 August, the group posted a £660.5m loss. This is a 483.6% fall in profits to the £172.2m in profits Whitbread made in the previous year.

A Whitbread spokesperson said that the business “has taken decisive action to ensure that our cost base reflects the low levels of demand”.

“Throughout the pandemic to date, we have paid our rent commitments in full, even when our hotels and restaurants were forced to close.

“With ongoing government restrictions expected to result in subdued market demand into the first half of 2021, we are now asking our landlords to support us, as other stakeholders have during the pandemic, through a reduction in rent for the December quarter in recognition of the current environment.”

Andrew Jones, is the chief executive of LondonMetric. This is a FTSE 250 property company that has Premier Inn as a tenant. He said that Whitbread has “behaved impeccably” towards to landlords “and so we will look to help them with their cash flow whilst the business recovers”.

A permanent transfer of value from our shareholders to theirs is not appropriate for a company still valued at over £6bn. There are no contractual provisions for landlords to share gains in the good years and so sharing pain in the tough years seems inequitable. After all, you can’t un-sign a contract.”

Whitbread shares are trading +0.67% at 3,159.00 (0925GMT). In the year to date, shares have fallen from highs of 4,259.53.

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