REG - Whitbread PLC - Q3 FY23 Trading Update

WhitbreadAnnouncement

12/01/2023 07:00

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RNS Number : 4548M  Whitbread PLC  12 January 2023

 

Continued positive trading momentum driven by

strong performance in the UK and further progress in Germany

 

Throughout this release percentage growth comparisons are comparing the
current year (Q3 FY23) performance for the 13 weeks to 1 December 2022 to the
same period in FY22, or FY20, the last financial period before the onset of
the COVID pandemic.

 

Q3 FY23 summary

 

                              vs last year (FY22)        vs pre-pandemic (FY20)
                              UK       Germany  Total            UK      Germany  Total
 Sales growth:
    Accommodation             23.8%    172.8%   28.3%            36.9%   770.2%   44.7%
    Food & beverage           8.4%     91.1%    9.7%             (3.7)%  539.5%   (1.3)%
    Total                     19.2%    158.0%   22.9%            23.0%   730.1%   29.0%
 Like-for-like sales growth:
    Accommodation             20.6%    91.0%    22.8%            26.6%   29.4%    26.6%
    Food & beverage           6.9%     39.4%    7.4%             (7.6)%  7.0%     (7.6)%
    Total                     16.6%    81.7%    18.3%            14.8%   25.9%    14.9%

 

 

Q3 FY23 highlights

·      Premier Inn UK: continued outperformance with total accommodation
sales 24.1pp ahead of the midscale and economy ('M&E') market(1) in Q3
FY23

·      Total UK accommodation sales were 24% ahead of Q3 FY22 and 37%
ahead of Q3 FY20, driven by a combination of increased occupancy, higher
average room rate and estate growth with a strong performance across both
London and the Regions

·      F&B sales were 8% ahead of Q3 FY22 and while this remained 4%
behind Q3 FY20, we have launched a series of initiatives to help increase
sales

·      Premier Inn Germany: continued growth in revenues, led by our
more established hotels that performed particularly strongly in what is an
important trading period

·      We now have 45 open hotels in Germany with a further 36 in the
pipeline

·      Our strong operating cashflow has continued to fund our ongoing
investment in both the UK and Germany whilst maintaining a healthy balance
sheet and net cash at 1 December 2022 was £284m.

Current trading(2) and outlook

·      Strong trading momentum continued with total UK accommodation
sales up 25% versus FY22 and up 36% versus FY20, representing a 26.3pp
outperformance of the M&E market(3)

·      Given the decline in market supply and the success of our own
commercial initiatives, we expect pricing to remain strong

·      UK F&B sales were 13% ahead of FY22 and 6% behind FY20

·      In Germany, our trading performance remained well ahead of both
FY22 and FY20. Our more established hotels are competing well in the German
midscale and economy market and we remain comfortable with our improved FY23
guidance of a pre-tax loss between £40m - £50m

·      Whilst there is no change to FY23 cost guidance, looking ahead,
we expect net cost inflation on our c.£1.6bn UK cost base to be between 7%
and 8% in FY24, including labour, F&B and utilities that are now 75%
hedged for FY24, partially offset by lower business rates

·      With an encouraging forward booked position in the UK, pricing
expected to remain strong, further estate growth and our ongoing efficiency
programme, we remain confident in the FY24 outlook

·      The outlook for our German hotels remains very encouraging and we
remain committed to our long-term strategy

Comment from Alison Brittain, CEO:

 

"Premier Inn UK delivered another excellent quarter with a strong performance,
both in absolute terms and also relative to the broader midscale and economy
sector. The uplift in accommodation sales was driven by a strong performance
across London and the Regions, with both remaining significantly ahead of last
year and pre-pandemic levels and with a well-balanced mix of business and
leisure guests. These revenue trends have continued into the fourth quarter,
with good occupancy and high average room rates sustaining strong RevPAR
growth and UK food and beverage sales remain well ahead of last year.

 

"Premier Inn Germany had another robust quarter, led by our cohort of more
established hotels that are performing particularly well and are attracting
excellent guest scores. This performance underpins our enthusiasm about the
market opportunity and our confidence in being able to achieve a long-term
target of 10-14% return on capital.

 

"Despite a more challenging period for the UK economy, our winning business
model continues to deliver outstanding value and quality for our guests. The
strength of our forward booked position, robust pricing, estate growth and
efficiency programme all underpin our confidence in the outlook for FY24. In
Germany, our potential remains significant and we are well on the way to
unlocking substantial value in this large and exciting market.

 

"It has been an enormous privilege to lead Whitbread over the last seven years
and I am pleased to be handing over to incoming CEO Dominic Paul at a time
when the business is performing well and when prospects for the future look
bright. We have a strong balance sheet and compelling growth opportunities
both in the UK and in Germany, and having worked with Dominic I know that he
will bring great energy and drive to delivering them. I wish him and all my
Whitbread colleagues every success for the future."

 

Notes:

1: STR data, full inventory basis, 2 September 2022 to 1 December 2022,
M&E market excludes Premier Inn

2: Five week period to 5 January 2023

3: STR data, full inventory basis, 2 December 2022 to 29 December 2022,
M&E market excludes Premier Inn

 

 

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
(mailto:peter.reynolds@whitbread.com)

Abigail Cammack, Investor Relations Manager
 
    abigail.cammack@whitbread.com (mailto:abigail.cammack@whitbread.com)

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

 

Media -
Tulchan
          whitbread@tulchangroup.com

Jessica Reid                                                                                                               +44 (0) 20 7353 4200

 

 

A live Q&A teleconference for investors and analysts will be held at
9:15am GMT on 12 January 2023. Details to join are noted below. An on-demand
version of this will be made available on the website
(www.whitbread.com/investors/results-reports-and-presentations
(http://www.whitbread.com/investors/results-reports-and-presentations) )
shortly after.

 

Q&A teleconference participant dial-in numbers:

Start time - 9:15am GMT

United Kingdom (Local): 020 3936 2999

All other locations: +44 203 936 2999

Participant Access Code: 573482

 

 

 

Appendix

 

 

1)   Premier Inn UK key performance indicators

 

                                               Q1       Q2        Q3        YTD
 London
 Occupancy (full inventory)                    83.5%    87.2%     87.3%     86.0%
 Average room rate                             £85.57   £102.60   £107.06   £98.62
 Revenue per available room                    £71.42   £89.42    £93.49    £84.79
 Total accommodation sales growth vs FY20      30.6%    38.2%     41.7%     37.2%

 Regions
 Occupancy (full inventory)                    82.4%    87.1%     85.2%     84.9%
 Average room rate                             £63.37   £74.87    £68.20    £68.92
 Revenue per available room                    £52.23   £65.19    £58.09    £58.51
 Total accommodation sales growth vs FY20      31.2%    37.9%     35.4%     35.0%

 Total
 Occupancy (full inventory)                    82.6%    87.1%     85.5%     85.1%
 Average room rate                             £67.17   £79.57    £74.95    £74.02
 Revenue per available room                    £55.48   £69.30    £64.12    £62.97
 Total accommodation sales growth vs FY20      31.0%    38.0%     36.9%     35.5%

 Outperformance vs M&E market(1)               26.6pp   25.4pp    24.1pp    25.3pp

 F&B
 Total food and beverage sales growth vs FY20  (4.3)%   (5.8)%    (3.7)%    (4.6)%

 Total sales growth vs FY20                    18.1%    23.2%     23.0%     21.5%

 

 

2)   Premier Inn Germany key performance indicators

 

                                               Q1       Q2        Q3       YTD
 Occupancy (full inventory)                    57.1%    69.0%     61.9%    62.9%
 Average room rate                             £52.16   £57.52    £76.95   £62.84
 Revenue per available room                    £29.78   £39.70    £47.64   £39.53
 Total accommodation sales growth vs FY20      994.9%   1,870.5%  770.2%   1,043.7%
 Total food and beverage sales growth vs FY20  929.7%   1,175.8%  539.5%   778.3%
 Total sales growth vs FY20                    984.0%   1,725.2%  730.1%   996.0%

 

 

 

3)   UK Quarterly sales & RevPAR growth versus FY20

 

                                                       FY23
                                                       Q1      Q2      Q3      YTD
                                                       %       %       %       %
 Accommodation                                         31.0%   38.0%   36.9%   35.5%
 F&B                                                   (4.3)%  (5.8)%  (3.7)%  (4.6)%
 Premier Inn UK total sales growth                     18.1%   23.2%   23.0%   21.5%

 Regions                                               31.2%   37.9%   35.4%   35.0%
 London                                                30.6%   38.2%   41.7%   37.2%
 Premier Inn UK accommodation sales growth             31.0%   38.0%   36.9%   35.5%

 Accommodation                                         21.5%   26.9%   26.6%   25.1%
 F&B                                                   (8.0)%  (9.8)%  (7.6)%  (8.5)%
 Premier Inn UK LFL sales growth                       10.6%   14.5%   14.8%   13.4%

 Regions                                               22.6%   29.3%   27.8%   26.8%
 London                                                11.3%   18.0%   21.5%   17.2%
 Total RevPAR growth                                   20.7%   27.4%   27.2%   25.3%

 Regions                                               22.4%   27.9%   26.9%   25.9%
 London                                                13.3%   18.1%   21.2%   17.8%
 LFL RevPAR growth                                     20.4%   25.7%   25.5%   24.0%

 Regions                                               14.9%   20.2%   19.5%   18.3%
 London                                                8.6%    19.2%   23.3%   17.5%
 Midscale & Economy market total sales growth(1)       12.8%   20.4%   20.2%   18.0%

 Regions                                               14.4%   19.9%   19.6%   18.1%
 London                                                3.1%    12.5%   15.7%   10.9%
 Midscale & Economy market total RevPAR growth(1)      11.5%   19.1%   19.1%   16.8%

 

 

 

4)   Q3 YTD sales growth

 

                              vs last year (FY22)        vs pre-pandemic (FY20)
                              UK       Germany  Total            UK      Germany   Total
 Sales growth:
    Accommodation             66.1%    263.3%   70.9%            35.5%   1,043.7%  42.0%
    Food & beverage           54.0%    190.2%   55.8%            (4.6)%  778.3%    (2.5)%
    Total                     62.6%    250.6%   66.5%            21.5%   996.0%    26.5%
 Like-for-like sales growth:
    Accommodation             60.3%    156.3%   62.6%            25.1%   37.3%     25.2%
    Food & beverage           51.2%    115.9%   52.0%            (8.5)%  12.5%     (8.5)%
    Total                     57.7%    149.4%   59.6%            13.4%   33.0%     13.5%

 

 

Notes:

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

 

 

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