Whitbread saw revenue surge over 100% compared to last year and exceeded pre-pandemic levels as their expansion plans helped increase market share and strong performance versus peers.
Whitbread’s group statutory revenue rose 104% to £1.35bn, up from £661m the year prior. Revenue was also higher than the £1.08bn recorded in the period just before the pandemic.
“Whitbread’s Premier Inn has driven a strong first half performance. Its UK hotels are fuller than pre-covid levels, but not at the expense of room rates which have also been going up. This is testament to Premier Inn’s increasing market share as the independent hotel sector continues to decline,” said Derren Nathan, Head of Equity Research at Hargreaves Lansdown.
Despite bumper sales figures, Whitbread shares dipped on Tuesday as investors fretted about the impact of rising costs on margins. Whitbread said they expected margins to fall in H2 2023 as a result of inflationary pressures.
Nonetheless, analysts were upbeat on Whitbread’s growth strategy and a cash pile that will enable them to deliver on this strategy. Whitbread had £1.2bn cash and equivalents at the end of the period.
“The one fly in the ointment which seems to be preventing investors from getting too excited about any of these strengths is the surge in costs which Whitbread is facing. However, Whitbread has the financial resources to continue to invest in and grow the business despite these inflationary pressures,” said AJ Bell financial analyst, Danni Hewson.