British hotel and restaurant operator Whitbread plc (LON:WTB) saw its share price dip on Thursday, which saw it weigh on the efforts of AB Foods (LON:ABF) and keep the FTSE flat in morning trading.
This was led by underwhelming third quarter sales growth of 0.3% during the third quarter, which brought year-to-date sales growth up to exactly 0%.
Like-for-like sales growth were the most damning area for the Company, down 1.3% year-on-year for the the third quarter and 2.2% for the YTD.
Overseas, however, Whitbread were able to make some headway. The Company were able to expand their operations in Germany, and said its open and committed pipeline had extended to almost 50 hotels.
It said that in the UK, it was optimising its network and trialling its Premier Plus rooms across 19 sites.
It added that its efficiency programme was in line with its plans and that it expected to deliver FY20 results in line with its expectations.
Whitbread comments
Commenting on the update, Company Chief Executive Alison Brittain, stated,
“Whitbread delivered a robust performance in the third quarter, growing total sales by 1%, despite challenging market conditions in the UK. We now have over 80,000 rooms in the UK & internationally, operating under the Premier Inn brand, with a committed pipeline of over 20,000 additional rooms. We also continue to achieve strong results from our efficiency programme, which is helping to partially offset high industry cost inflation and means we are on track to achieve our full year expectations for FY20.
The UK business achieved total sales growth of 0.3% in the third quarter. Our performance in the quarter reflects a good F&B performance and marginally declining total accommodation sales. Weak business and leisure confidence in the regions continued, which was partially offset by the strength of the central London market, where we outperformed.”
“Our growth in Germany remains firmly on target as our confidence strengthens for the long-term market opportunity. We are pleased with the performance of all three hotels we have opened to-date, in Frankfurt, Hamburg and Munich, and continue to extend the total committed pipeline in Germany. The open plus committed pipeline now stands at around 8,500 rooms across 48 hotels, including 22 hotels from the Foremost Hospitality and AcomHotel acquisitions. We will be opening around 20 hotels through the course of 2020.”
“Despite the short-term economic uncertainty, there remains significant long-term opportunities for Premier Inn in both the UK and Germany. We can access these due to our strong financial position, resilient model and ongoing investment to improve our market-leading proposition. Continuing to invest in growth and optimisation through our disciplined approach to capital allocation ensures we can create sustainable value for shareholders over the longer-term.”
Investor notes
Elsewhere in the British market, Pearson (LON:PSON) dropped 11% during early morning trade, while South32 (LON:S32) reported impressive performance.
Since trading began, Whitbread recovered from its drop of over 5%, now down 4.36% or 211.00p, to 4,626.00p per share 16/01/19 11:18 GMT. Peel Hunt analysts reiterated their ‘Buy’ stance on the stock. Its p/e ratio is 28.88%, its dividend yield stands at 2.15%.
