REG - Whitbread PLC - Q1 Trading Update

WhitbreadAnnouncement

15/06/2022 07:00

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RNS Number : 8844O  Whitbread PLC  15 June 2022

 

Very strong trading ahead of expectations in the UK and Germany

 

Throughout this release percentage growth comparisons are made to either FY22,
or to FY20, the last financial period before the onset of the COVID pandemic.

 

Summary

 
 

·      Continued market outperformance in the UK with Premier Inn total
accommodation sales 27.2pp ahead of the market(1), driven by the strength of
our commercial and operational initiatives combined with the inherent
strengths of our brand, scale and direct distribution

·      Our UK hotels continue to perform well ahead of pre-COVID levels:

o  Total UK accommodation sales 235.6% ahead vs FY22 (31.0% ahead vs FY20)

o  UK LFL accommodation sales 221.6% ahead vs FY22 (21.3% ahead vs FY20)

·      UK food and beverage sales were 585.3% ahead vs FY22 (4.3% behind
vs FY20)

·      Given a tight labour market and our focus on maintaining our
market leading position, we plan to invest additional costs of £20m - £30m
in labour, refurbishments and IT in FY23. However, our high levels of
occupancy and continued strong sales performance mean we remain confident in
our continued margin recovery in the UK

·      Since the lifting of restrictions, the German hotel market has
recovered more strongly than expected and Premier Inn occupancy levels were
64.7% in last four weeks of the quarter. The open estate now stands at 40
hotels

·      Replacement of existing debt facility with new £775m five-year
revolving credit facility

Comment from Alison Brittain, CEO:

"The strength of Premier Inn's recovery in the UK continues to be ahead of
expectations with a particularly strong Q1 performance that is well ahead of
pre-pandemic levels and we continue to significantly outperform the
market(1).  This outperformance is driven by a number of factors, including
our commercial and operational focus as well as the strength of our brand and
operating model, our direct distribution, national coverage and accelerated
independent supply contraction.

"In Germany, our open hotel estate now stands at 40 hotels, with a further 38
hotels in the pipeline. The quality and prime location of our hotels are
proving highly attractive and are driving high customer scores. The trading
performance of our more mature hotels in the two months post the lifting of
COVID restrictions only reinforces our positive view of the significant
opportunity in Germany.

"This impressive Q1 performance together with improved visibility into Q2,
gives us increased confidence in delivering a strong first half and remaining
ahead of the market for the rest of the year."

Q1 Financial Performance(2)

 

                              Vs last year (FY22)           Vs pre-pandemic (FY20)
                              UK       Germany(3)  Total            UK      Germany(3)  Total
 Sales growth:
    Accommodation             235.6%   906.7%      244.9%           31.0%   994.9%      35.9%
    Food & beverage           585.3%   855.7%      588.9%           (4.3)%  929.7%      (2.7)%
    Total                     295.4%   898.2%      303.8%           18.1%   984.0%      21.8%
 Like-for-like sales growth:
    Accommodation             221.6%   634.7%      227.4%           21.3%   12.3%       21.3%
    Food & beverage           566.5%   832.8%      569.2%           (7.6)%  10.7%       (7.5)%
    Total                     281.0%   660.6%      286.0%           10.8%   12.1%       10.8%

 

Notes:

1: STR data, full inventory basis, 4 March 2022 to 26 May 2022, M&E market
excludes Premier Inn

2: All quarters are 13 weeks: FY23: 4 March 2022 to 2 June 2022 FY22: 26
February 2021 to 27 May 2021, FY20: 1 March 2019 to 30 May 2019

3: LFL sales in Germany: FY22: 24 sites and FY20: 2 sites

Q1 performance and outlook

 

Premier Inn UK has traded strongly during the first three months of FY23 and
based on improved visibility of the second quarter, where we are c.40% booked,
we are increasingly confident of delivering a strong first half performance.
Whilst the short-lead booking cycle for the majority of our customers means
that our view of the second half is not yet fully formed, based on our
performance to-date and a number of lead indicators, we are confident of
remaining ahead of the market for the rest of the financial year.

 

This strong sales performance coupled with the continued decline of the
independent hotel sector means that we remain positive about our continued
margin recovery in the UK in FY23. However, labour supply remains tight across
the hospitality sector and assuming that consumer demand and occupancy remain
strong, we expect some additional costs due to targeted pay increases. We are
also taking the opportunity to bring forward our investment in refurbishments
and maintenance projects as well as accelerate some additional IT spend that
will underpin our market leading position and drive future earnings. Taken
together, these factors are expected to increase total costs by £20m - £30m
in FY23.

 

UK total food and beverage sales have recovered well throughout FY22 and into
FY23 and are approaching pre-COVID levels (FY20). We anticipate that the
rollout of new menus, combined with targeted marketing initiatives, will help
drive an improvement in sales as we move through the year.

 

In Germany, trading over the last two months post the lifting of Government
restrictions has been ahead of our expectations. Our occupancy levels have
increased, particularly across our more mature hotels which are trading ahead
of the market. Whilst we have only traded during a restriction free period for
a number of weeks, we are optimistic that the full year outlook in Germany is
improving and there is no change in our view of the medium and long-term value
creation opportunity for Premier Inn in Germany.

 

New debt facility

 

The Group is pleased to have signed a new £775m revolving credit facility
(RCF), replacing the previous £850m facility that was due to expire in
September 2023. The new five-year facility, with two one year extension
options, is a multi-currency revolving credit facility and is provided by a
syndicate of seven banks led by Banco Santander, Barclays, NatWest and Bank of
China. The RCF has variable interest rates with GBP linked to SONIA and EUR
being linked to EURIBOR.

 

 
For more information please contact:

Investor Relations -  Whitbread
 
  investorrelations@whitbread.com (mailto:investorrelations@whitbread.com)

Peter Reynolds, Director of Investor Relations
 
       peter.reynolds@whitbread.com

Abigail Cammack, Investor Relations Manager
                   abigail.cammack@whitbread.com

Sophie Nottage, Investor Relations Manager                                                sophie.nottage@whitbread.com

 

Media - Tulchan
 
   whitbread@tulchangroup.com

Jessica Reid / Alison Lygo                                                                                              +44 (0) 20 7353 4200

 

 

A live Q&A teleconference for investors and analysts will be hosted by
Alison Brittain and Hemant Patel at 8:00am BST on 15 June 2022. Details to
join are noted below. An on-demand version will be made available on the
Group's website:
(www.whitbread.com/investors/results-reports-and-presentations
(http://www.whitbread.com/investors/results-reports-and-presentations) ) later
today.

 

Q&A teleconference participant dial-in numbers:

Start time - 8:00am BST

United Kingdom (Local): 020 3936 2999

All other locations: +44 203 936 2999

Participant Access Code: 034706

 

Appendix

 

1)   Premier Inn UK key performance indicators

                                                            FY22                            FY23
                                          Q1       Q2       Q3       Q4(4)    Full Year(4)  Q1
 London
 Occupancy (full inventory)               32.9%    70.7%    77.2%    63.8%    61.3%         83.1%
 Average room rate                        41.35    56.77    75.27    69.09    63.85         85.57
 Revenue per available room               13.62    40.16    58.12    44.05    39.12         71.14
 Total accommodation sales growth(3)      (77.4)%  (43.5)%  (18.9)%  (15.9)%  (38.6)%       30.6%

 Regions
 Occupancy (full inventory)               44.0%    81.2%    82.2%    69.6%    69.4%         82.5%
 Average room rate                        40.80    59.11    62.97    50.70    55.28         63.37
 Revenue per available room               17.97    47.99    51.76    35.30    38.37         52.26
 Total accommodation sales growth(3)      (56.3)%  (0.2)%   19.9%    10.8%    (6.5)%        31.2%

 Total
 Occupancy (full inventory)               42.2%    79.5%    81.4%    68.7%    68.1%         82.6%
 Average room rate                        40.87    58.77    64.84    53.47    56.52         67.17
 Revenue per available room               17.27    46.75    52.78    36.72    38.49         55.48
 Total accommodation sales growth(3)      (60.9)%  (9.6)%   10.6%    4.4%     (13.9)%       31.0%

 Outperformance vs M&E market(1)          10.0pp   14.7pp   16.1pp   19.0pp   14.8pp        27.2pp

 F&B
 Total food and beverage sales growth(3)  (86.0)%  (18.1)%  (11.1)%  (15.5)%  (32.7)%       (4.3)%

 Total sales growth(3)                    (70.1)%  (12.5)%  3.1%     (3.7)%   (20.6)%       18.1%

 

 

 

2)   Premier Inn Germany key performance indicators

                                                         FY22                          FY23
                                          Q1     Q2      Q3      Q4(4)   Full Year(4)  Q1
 Occupancy (full inventory)               14.6%  47.5%   59.9%   35.8%   40.6%         57.1%
 Average room rate                        32.42  37.60   43.99   40.78   40.51         52.16
 Revenue per available room               4.75   17.85   26.37   14.60   16.43         29.78
 Total accommodation sales growth(3)      8.8%   447.4%  219.0%  132.4%  189.7%        994.9%
 Total food and beverage sales growth(3)  7.7%   307.3%  253.8%  143.1%  191.9%        929.7%
 Total sales growth(3)                    8.6%   418.1%  224.8%  134.2%  190.1%        984.0%

 

 

 

3)   UK Quarterly sales & RevPAR growth versus FY20

 

                                                       FY22                                         FY23
                                                       Q1       Q2       Q3       Q4(4)    FY(4)    Q1
                                                       %        %        %        %        %        %
 Accommodation                                         (60.9)%  (9.6)%   10.6%    4.4%     (13.9)%  31.0%
 F&B                                                   (86.0)%  (18.1)%  (11.1)%  (15.5)%  (32.7)%  (4.3)%
 Premier Inn UK total sales growth(3)                  (70.1)%  (12.5)%  3.1%     (3.7)%   (20.6)%  18.1%

 Regions                                               (56.3)%  (0.2)%   19.9%    10.8%    (6.5)%   31.2%
 London                                                (77.4)%  (43.5)%  (18.9)%  (15.9)%  (38.6)%  30.6%
 Premier Inn UK accommodation sales growth(3)          (60.9)%  (9.6)%   10.6%    4.4%     (13.9)%  31.0%

 Accommodation                                         (62.0)%  (13.7)%  5.5%     0.1%     (17.5)%  21.3%
 F&B                                                   (86.2)%  (20.3)%  (13.4)%  (17.3)%  (34.3)%  (7.6)%
 Premier Inn UK LFL sales growth(3)                    (70.9)%  (15.9)%  (1.0)%   (6.9)%   (23.5)%  10.8%

 Regions                                               (57.8)%  (4.8)%   13.9%    5.9%     (10.6)%  22.7%
 London                                                (78.8)%  (47.0)%  (24.5)%  (22.0)%  (42.7)%  10.8%
 Total RevPAR growth(3)                                (62.4)%  (14.0)%  4.7%     (0.7)%   (17.9)%  20.7%

 Regions                                               (57.8)%  (5.6)%   13.5%    6.0%     (11.0)%  22.2%
 London                                                (78.4)%  (46.5)%  (23.6)%  (20.2)%  (42.0)%  13.3%
 LFL RevPAR growth(3)                                  (62.4)%  (14.6)%  4.6%     (0.3)%   (18.2)%  20.2%

 Regions                                               (63.5)%  (6.6)%   11.8%    (0.2)%   (14.5)%  14.8%
 London                                                (80.0)%  (52.1)%  (27.6)%  (26.8)%  (46.5)%  7.3%
 Midscale & Economy market total sales growth(2)       (67.7)%  (19.6)%  (0.3)%   (8.5)%   (23.9)%  12.2%

 Regions                                               (63.4)%  (6.5)%   12.4%    0.9%     (14.0)%  14.6%
 London                                                (80.2)%  (52.8)%  (29.2)%  (28.1)%  (47.4)%  1.8%
 Midscale & Economy market total RevPAR growth(2)      (67.7)%  (19.6)%  (0.2)%   (7.9)%   (23.7)%  11.1%

 

Notes:

1: STR data, full inventory basis, 26 February 2021 to 26 May 2022, M&E
market excludes Premier Inn

2: STR data, M&E market includes Premier Inn

3: Sales growth versus FY20

4: FY22 data on a 52 week basis vs FY20

 

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