Premier Inn owner Whitbread says forward bookings outpacing last year (updated)

Whitbread

Today 07:19

Q1 LFL sales up 2% as hotel demand offsets F&B weakness
UK, Germany bookings ahead of last year 
Bookings helped by improved leisure demand in UK
Shares down over 6% YTD
Adds CEO comment in paragraph 5, analyst comment in 8, graphic
By Neeshita Beura and Raechel Thankam Job

    June 18 (Reuters) - Forward bookings in the UK and Germany are outpacing last year, Premier Inn owner Whitbread WTB.L said on Thursday, as it pushes ahead with plans to exit its remaining branded restaurants, cut spending and boost shareholder returns.
Whitbread is fending off pressure for a deep strategic overhaul and possible sale from activist investor Corvex Management at a time when the British hospitality sector is facing mounting headwinds. 
The global uncertainty and inflation worries created by the Iran war have weighed on consumer sentiment, weakening spending even as the British government moves to raise business tax rates.
However, the conflict, which Washington and Tehran agreed to end this week, has also driven up airline fares, which CEO Dominic Paul said could push Britons to holiday in the UK, where Whitbread makes nearly 90% of its revenue.
"We're in a good position for this summer," he told analysts during a call.
The hotel operator said like-for-like sales rose 2% for the 13 weeks to May 28, and it remains confident in its full-year outlook despite limited visibility.
As UK holiday-makers book trips closer to home, the recently agreed peace deal could also give them the confidence to spend more this summer.
"The end of the Iran conflict is probably positive for Whitbread," Peel Hunt analyst Ivor Jones said in a note.

WHITBREAD PURSUES STRATEGY IN FACE OF CALLS FOR SALE
Whitbread plans to slash capital spending by £1 billion ($1.33 billion) and return £2 billion of free cash flow to shareholders by fiscal 2031.
In April, it said it would shut its remaining branded restaurants, potentially cutting about 3,800 jobs. 
It is, meanwhile, working to secure future relief from budget changes that hit British businesses with rate hikes, Paul said. 
"Whilst we expect the impact of business rates to remain in line with our previous FY27 guidance, we are continuing to press the UK Government for changes to FY28 and FY29," the CEO said in a statement.
Corvex Management had cited the budget changes in its call for Whitbread to pursue a sale and strategy review, arguing the resulting increased costs created a valuation gap.
Whitbread's shares, which have fallen over 6% year-to-date, were trading 0.4% lower by 1016 GMT.
($1 = £0.7506)

 (Reporting by Neeshita Beura in Bengaluru and Raechel Thankam Job; Editing by Rashmi Aich and Joe Bavier)
 ((Neeshita.Beura@thomsonreuters.com))