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The owner of Premier Inn has warned of a “tougher” year ahead as shares in the firm dropped 7%.
Despite preliminary results showing strong profits for the 52 weeks to 2 March 2017, the company has said that it “remains cautious”.
The group’s sales increased 8.2% to £3.1bn, and thePremier Inn brand enjoyed total sales growth of 9% and like-for-like sales growth of 2%.
Last year, the company saw one of the biggest FTSE100 drops in its share price following the Brexit vote.
Alison Brittain, chief executive, said: “Whitbread has had another year of strong growth – total basic earnings per share increased by 7.3%.
“Premier Inn’s strong sales growth benefitted from the 3,816 gross new UK rooms we opened this year and the accelerated maturity of the circa 9,000 rooms we have opened over the last two years. We achieved occupancy of over 80% with record levels of direct bookings at 94%.”
The additional rooms put pressure on Premier Inn, as RevPAR growth slowed to 1.4%. Compared with the rest of the UK, the hotel chain underperformed.
In February last year, Premier Inn built its first German hotel in Frankfurt and has committed to building five more.
Brittain added: “In the year ahead we will continue to focus on organic growth and investing in our customer proposition.
“Whilst we are only seven weeks into our new financial year Premier Inn has had a good start to the year and Costa has also seen positive like for like sales growth, although we remain cautious and expect a tougher consumer environment than last year.”
