REG - Whitbread PLC - Q1 Trading Update

WhitbreadAnnouncement

22/06/2023 07:00

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RNS Number : 5042D  Whitbread PLC  22 June 2023

 

Total revenue up 19%, strong trading momentum and positive outlook

 

Throughout this release percentage growth comparisons are made comparing Q1
FY24 performance for the 13 weeks to 1 June 2023 with the same period in FY23,
unless stated otherwise

 

Summary

 
 

·      Premier Inn UK delivered an outstanding performance during the
first quarter:

o Total UK accommodation sales were up 18% vs FY23 and UK LFL accommodation
sales up 16% vs FY23 with strong demand from both business and leisure guests
across the Regions and London

o RevPAR +16% ahead of FY23 and +40% vs FY20. Continued outperformance versus
the wider midscale and economy ('M&E') market(1) with a RevPAR premium of
£6.18 (Q1 FY23: £5.76)

o UK food and beverage ('F&B') sales were 10% ahead vs FY23 which
benefited from several commercial initiatives put in place during the second
half of FY23

·      Premier Inn Germany also made good progress, led by our cohort of
18 more established hotels which is continuing to mature in line with our
expectations. RevPAR for this cohort increased to €63 (Q1 FY23: €44) and
total RevPAR for the entire German estate increased to €55 (Q1 FY23: €35)
 

·      The strength of our overall performance and forward booked
position has increased our confidence in being able to deliver a strong first
half result in FY24

·      Trading momentum is strong and we remain positive about the full
year outlook

·      £300m share buy-back is on-track with 3.1m shares purchased so
far at a total cost of c.£103m

·      Interim results will be announced on 18 October 2023

Dominic Paul, Chief Executive said:

"In the UK, our market leading brand and value-led customer proposition is
continuing to deliver impressive revenue growth and a healthy RevPAR premium
versus the wider M&E market. The structural reduction in hotel supply,
coupled with strong consumer demand, is highlighting the strengths of our
differentiated business model, as evidenced by our continued strong
performance. Our forward booked position into Q2 underpins our confidence in
being able to deliver a strong first half result.

"In Germany, we now have 56 hotels with 10,000 rooms open, and a further 32
hotels and 6,000 rooms in the pipeline. Overall market demand continued to
recover during the first quarter. Our cohort of 18 more established hotels is
continuing to perform in line with the market and we have been encouraged by
the performance of our less mature cohorts that are starting to follow a
similar trajectory. The continued recovery of the wider German market, the
performance of our more established hotels and encouraging guest scores across
all of our hotels mean we remain confident in achieving our long-term target
of 10-14% returns on capital.

"Our business is in great shape and trading well. Given the lack of branded
supply growth and permanent decline in the independent sector, I am confident
that our business model will continue to deliver as we strengthen Premier
Inn's position in the UK, unlock our potential in Germany and maximise
long-term returns for our shareholders."

Q1 Financial Performance(2)

 

                              vs last year (FY23)
                              UK       Germany(2)  Total
 Sales growth:
    Accommodation             18%      129%        23%
    Food & beverage           10%      100%        12%
    Total                     16%      124%        19%
 Like-for-like sales growth:
    Accommodation             16%      66%         18%
    Food & beverage           9%       47%         10%
    Total                     14%      63%         15%

 

1: STR data, standard basis, 3 March 2023 to 1 June 2023, M&E market
excludes Premier Inn

2: LFL sales in Germany: FY23: 38 sites

Q1 performance

 

Consumer demand in the UK has remained strong and Premier Inn delivered an
excellent operational and financial performance. Whilst there was good revenue
growth in both the Regions and London, demand was particularly strong in
London that led to a marked increase in ARRs. We opened 348 new rooms across
the UK and Ireland and remain on course to open a total of 1,500-2,000 new
rooms in FY24, most of which will open in the second half of the year.

 

In F&B, the encouraging start to the quarter has continued and total sales
were up 10% versus last year. While trading at the value end of the pub
restaurant market remains challenging, we have been pleased with the positive
impact of a number of commercial initiatives introduced in FY23. We are
continuing to explore a variety of options to optimise our F&B offer
whilst maintaining a quality experience for our Premier Inn guests.

In Germany, the recovery in market demand continued during the first quarter.
We have 56 open hotels and a further 32 in the pipeline and remain on course
to open 1,000-1,500 rooms in FY24. Our cohort of 18 more established hotels
continues to trade in line with the wider market, achieving a RevPAR of €63
(Q1 FY23: €44) which is 45% ahead of the same period last year.

 

Outlook

 

With strong trading momentum across the Group, we remain confident in the full
year outlook. Forward booked revenue in the UK is well ahead of last year and
in Germany we remain on course and expect to reach break-even on a run-rate
basis during calendar year 2024.

 

Extension of existing debt facility

 

The Group is pleased to have extended its existing £775m revolving credit
facility (RCF), that remains undrawn, for a further 12 months to May 2028. The
five-year facility 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

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

 

Media -
Teneo
 
         whitbread@teneo.com

Jessica Reid                                                                                                                +44 (0) 20 7353 4200

 

 

A live Q&A teleconference for investors and analysts will be hosted by
Dominic Paul and Hemant Patel at 8:00am BST on 22 June 2023. 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: 804213

Appendix

 

1)   Premier Inn UK key performance indicators

                                      FY23                                                    FY24
                                      Q1       Q2       Q3       Q4       Full Year  Q1       Q1(2)

                                                                                              %
 London
 Occupancy (full inventory)           83.4%    87.1%    87.3%    76.8%    83.6%      81.2%    (2.2)pp
 Average room rate (£)                85.57    102.60   107.06   93.07    97.31      111.71   30.5%
 Revenue per available room (£)       71.38    89.37    93.46    71.50    81.37      90.76    27.2%
 Total accommodation sales (£m)       91.1     114.2    119.9    94.0     419.3      120.8    32.5%

 Regions
 Occupancy (full inventory)           82.4%    87.1%    85.1%    75.7%    82.6%      83.1%    0.7pp
 Average room rate (£)                63.37    74.87    68.20    58.54    66.54      71.06    12.1%
 Revenue per available room (£)       52.23    65.20    58.03    44.31    54.94      59.06    13.1%
 Total accommodation sales (£m)       326.3    408.4    363.1    277.9    1,375.7    372.0    14.0%

 Total
 Occupancy (full inventory)           82.6%    87.1%    85.5%    75.9%    82.7%      82.8%    0.2pp
 Average room rate (£)                67.17    79.57    74.95    64.60    71.84      78.02    16.1%
 Revenue per available room (£)       55.48    69.30    64.06    49.02    59.45      64.59    16.4%
 Total accommodation sales (£m)       417.4    522.6    483.0    371.9    1,795.0    492.8    18.0%

 RevPAR premium vs M&E market(1)      +£5.76   +£5.35   +£4.56   +£4.32   +£4.97     +£6.18       +£0.42

 F&B
 Total food and beverage sales (£m)   176.2    181.8    177.7    177.1    712.7      193.7    9.9%

 Total UK sales (£m)                  593.6    704.4    660.7    549.0    2,507.7    686.5    15.6%

 

 

 

2)   Premier Inn Germany key performance indicators

                                                     FY23                     FY24
                                       Q1     Q2     Q3     Q4     Full Year  Q1     Q1(2)

                                                                                     %
 Occupancy (full inventory)            57.1%  69.0%  61.9%  50.0%  59.4%      64.5%  7.4pp
 Average room rate (€)                 61.85  67.61  88.30  69.05  72.30      84.81  37.1%
 Revenue per available room (€)        35.31  46.66  54.67  34.56  42.94      54.67  54.8%
 Total accommodation sales (€m)        21.0   31.5   38.2   25.5   116.1      46.2   120.4%
 Total food and beverage sales (€m)    4.0    5.4    5.9    4.9    20.2       7.7    92.5%
 Total sales (€m)                      24.9   36.9   44.1   30.4   136.3      53.8   115.9%

 

Notes:

1: RevPAR STR data, standard inventory basis, 4 March 2022 to 1 June 2023,
M&E market excludes Premier Inn

2: Sales growth versus FY23

 

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