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Hospitality group, Whitbread has announced a 40% drop in profits in its first set of full-year results following the sale of Costa Coffee to Coca-Cola.
Whitbread blamed Brexit uncertainty and weak UK hotel demand at its Premier Inns brand for the slow growth figures. Without the effects of the Costa sale, profit before tax at the group declined from £426m to £260m.
Revenue for the year ending 28 February rose to £2.05bn from £2bn, while profit before tax including the effects of the Costa deal hopped up by 1.2% from £432m to £438m.
Coca-Cola’s deal saw a share buyback programme triggered which will see “a significant majority of the net proceeds to shareholders”, the deal is worth 16.4 times Costa’s EBITDA for the 2018 financial year.
Alison Brittain, CEO at Whitbread, said: “This weakness has increased into March and April, particularly in the regional business market, coinciding with an acute period of political and economic uncertainty in the UK.
“During the year Premier Inn UK delivered total accommodation sales growth of 3.5% through further capacity addition. We have grown our UK network to over 76,000 rooms, with around 13,000 rooms in our committed UK pipeline.”
She added: “We announced a new runway of growth to 110,000 rooms at the Capital Markets Day in February and also see potential to extend the estate further with our two format innovations ‘Hub’ and ‘Zip’. Alongside our 4,008 new room openings this year, we have maintained our high occupancy, with 97% direct bookings, and have delivered a strong return on capital.”
