Whitbread plc (LON:WTB)’s full-year revenue rose from £589m to £1.7bn, beating market expectations and 17.8% down on pre-pandemic levels. There was strong recovery across the portfolio as the group lapped the previous year which was heavily impacted by restrictions.
Underlying cash profit (EBITDA) improved from a loss of £194.9m to a profit of £472.6m, 37.2% down on pre-covid levels.
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Cost inflation is running higher than expected, at around 8-9%. However, the group aims to offset this through cost reduction, estate growth and increased prices.
The board announced a final dividend of 34.7p and intends to reinstate its dividend policy to grow dividends broadly in line with earnings.
The shares were up 3.1% in early trading.
Whitbread's Earnings
Matt Britzman, Equity Analyst at Hargreaves Lansdown:
“Investors will be pleased to see the dividend return for the Premier Inn owner, following a period of suspension where flexibility offered by lenders meant distribution taps had to turn off. With it back on the table, it sends a clear message to markets that sentiment is vastly improved and the return to profitability plus beat on top and bottom-line estimates adds weight. The recoveries by no means complete and there’s still a way to go before the group’s out of the woods, but it’s pleasing to hear UK sales over the last couple of months are only around 5% down on pre-covid levels.
The value offering that Premier Inn provides should hold it in good stead as rising costs for consumers eat into disposable income. Inflation looks to be a bigger challenge than previously thought, with the group suggesting costs some 8-9% higher. That’ll take some nifty management on costs and prices to overcome, but a challenge Whitbread’s confident it can overcome.”
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