British hospitality business Whitbread, which owns the Premier Inn chain of budget hotels, has revealed “an impressive first half performance” for 2023 and plans for further investment in the UK and Germany.
The company's H1 results indicated that its adjusted profit before tax was up 44%, and its UK adjusted pre-tax margins increased by 27.5%. Its total UK accommodation sales were 15% ahead of H1 FY23 and 55% above H1 FY20 (the last pre-pandemic H1 results).
The growth is prompting the company to seek “opportunities to grow our pipeline towards our long-term potential of 125,000 rooms across the UK and Ireland.”
Whitbread has also continued to see progress in Germany, where new room openings saw total accommodation sales increase 82% against H1 FY23. Strong cash flow will fund further investment in both the UK and Germany, since adjusted operating cash flow increased by £73m ($89m) over H1, to £483m.
Commenting on the results, Whitbread Chief Executive Officer Dominic Paul said: “This is an impressive first-half performance. In the UK, we maintained high levels of occupancy whilst continuing to attract excellent guest scores and offering great value for our customers. The strengths of our operating model and our continued focus on driving cost efficiencies across the business resulted in UK margins exceeding pre-pandemic levels.
“In Germany, we are making good progress and are continuing to refine our strategy based on our learnings to date and whilst there is much work to do as we continue to grow, we remain on course to achieve our long-term ambition of 10-14% return on capital.”
The UK and Germany have consistently remained the primary geographical priorities for Whitbread, being the most mentioned areas across company filings since 2016. Significantly, neither saw a decrease in focus during the pandemic, and the recent rapid growth reflects the recovery of the industry.
The growing frequency of mentions of the UK and Germany in Whitbread's filings reflect the company’s sales growth, which have recovered since the pandemic, according to GlobalData figures.
Paul added: “The Group is in excellent shape, trading well and has significant growth potential, both in the UK and Germany. Based on our strong performance to date and an encouraging forward booked position, we remain optimistic about the full-year outlook and look forward with confidence as reflected by our increased interim dividend and further planned share buy-back.”
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