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Whitbread brings back dividend as it returns to profitability

Premier Inn’s pre-tax profits are up 114.1% to £74.9m from a loss of £532.8m year-on-year, although the recovery in the London market reportedly lagged for Whitbread due to low levels of inbound international travel

Whitbread PLC has reported it has returned to profitability in the 53-week period ended 3 March 2022 (FY22) as it hailed pre-tax profits of £58.2m, compared to a loss of £1bn in FY21.

As a result, Whitbread is reinstating dividend payments with the board declaring a final dividend per share of 34.7p, resulting in a total dividend payment of £70m. Whitbread said this reflects both the group’s “encouraging” trading, and confidence in its outlook post-Covid.

It also comes as FY22 statutory revenues increased 189% year-on-year from £589.4m to £1.7bn, due to “strong” recovery in sales post-Covid restrictions, along with the estate growth in the UK and Germany.

Additionally, Premier Inn’s total statutory revenue increased 188.9% to £1.66bn compared to £577.4m in FY21, although this is down 18.6% from £2.05bn in FY20. 

Premier Inn’s pre-tax profits are also up 114.1% to £74.9m from a loss of £532.8m last year. Overall, its total accommodation sales were 190.8% ahead of FY21, and down 13.9% compared to FY20.

Meanwhile, total UK accommodation sales for the group were 198% ahead of FY21. Total accommodation sales in the UK were 182% ahead of FY21, although this is down 6.5% compared to pre-Covid levels (FY20).

The recovery in the London market reportedly lagged the regions during the year due to low levels of inbound international travel, and subdued business commuting. However, Whitbread said trends improved during the second quarter of the year amid the domestic leisure bounce, and then into Q3 as offices reopened.

Overall, London total accommodation sales were 247.1% ahead of FY21, and 38.6% down compared to FY20.

The group now expects to add c.1,500 – 2,000 rooms in the UK and c.2,000 – 2,500 rooms in Germany in FY23. Additionally, the group said it expects to offset higher levels of inflation through cost efficiencies, estate growth and pricing power.

Alison Brittain, Whitbread CEO, said: “As we move into the next phase of our Covid recovery, this excellent performance, combined with confidence in the group’s outlook, means that the board is now proposing the reinstatement of dividend payments.                                                                          

“The summer period in particular saw very high levels of demand in our hotels, with many continuously at full occupancy.”

She added: “During the year we set further stretching targets, including accelerating our net zero Carbon target to be achieved by 2040, and setting eight clear diversity and inclusion commitments, including a target of 40% female representation in our senior leadership roles, which we have already surpassed.”

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