Whitbread sees turnaround in total F&B sales

Whitbread has seen total food and beverage sales within Premier Inn UK increase by 0.6% during the first half of 2019/20, following a 0.8% decline seen for H1 last year.

However, like-for-like (LFL) growth in F&B for the period was down 1.2% (H1 FY2019: -2.6%), which it put down to “a continuing subdued casual dining market”.

LFL growth for F&B in Q2 declined by 0.3%, compared to a 3.3% drop for the same period last year, according to its interim trading update.

Adjusted revenue for the group was down by 0.1% to £1.07bn for H1 FY20, when compared to the reinstated figures – for the sale of Costa and pension interest – for H1 FY19.

Adjusted EBITDAR was £427m, down from £448m (-4.8%), while profit after tax (excluding Costa in H1 FY2019) was down by 8.1% to £172m.

Alison Brittain, chief executive at Whitbread, said: “We have delivered a resilient first half profit performance despite challenging market conditions in the UK.

“Shorter-term trading conditions in the UK regional market have been difficult, particularly in the business segment where we have a higher proportion of our revenue, whilst trading in London remained strong.”

The business, which is now a vertically-integrated hotel business, with more than 79,000 rooms in the UK, is looking to continue to grow and innovate Premier Inn in its core UK business, as well as scaling up internationally.

Whitbread said its F&B offer was integral to hotel operations, performance and guest experience.

Rachel Fox, an equity analyst at Goodbody commented: ”With business confidence remaining weak and leisure confidence in decline, Whitbread is the latest company to reveal lacklustre results against difficult market conditions.

“Political and economic uncertainty have impacted bookings, particularly in the regions. Meanwhile, its food & beverage offering has also seen underlying sales declines which is likely owing to the chronic oversupply of casual dining restaurants.”

She added: ”Despite business bookings being under pressure for some time, it is telling that the Group notes that headwinds are now also being felt in its leisure offer, providing warning signs that macro weakness is now having a tangible impact across the board.”