Shares in hotel group Whitbread (WTB) topped the FTSE 100 leader board after a positive Q3 trading update.
Across the group, total accommodation sales were up 4% on a headline basis and 3% on a comparable basis.
UK accommodation sales were up 2%, while sales in Germany were up 16% and the business is nearing profitability.
Premier Inn is now the leading hotel group in Germany and RevPAR (revenue per available room) is climbing.
| Share price: £27.18 +4.9% | P/E: 19.1x |
| Market Cap: £4.6bn | Yield: 3.8% |
IMPROVED OUTLOOK
On a call with analysts, chief executive Dominic Paul said the group’s strong Q3 performance had continued into Q4.
The UK market has returned to growth, with RevPar improving in the current quarter at a premium to the market.
In Germany, demand has increased and Premier Inn is outperforming the wider hotel market.
Also positive news, the impact of higher UK business rates is now expected to be significantly less than previously forecast.
Meanwhile, cost efficiencies are expected to be greater than expected, all of which will help margins.
Things are ticking along nicely at Whitbread both here and in Germany, where the business should be in profit this year.
News that business rates will have less of an impact than thought is also welcome given the size of the estate.
Management isn’t sitting on its hands, though, and continues to manage its assets for maximum return.
It has just agreed a sale-and-leaseback on nine hotels with LondonMetric (LMP) at an attractive yield.
The group said it intends to recycle £250 million to £300 million of cash into ‘high-returning growth opportunities’.
Read the press release here: https://www.whitbread.co.uk/investors/
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