Shares of Whitbread (LON: WTB) erased gains from this morning after the owner of Premier Inn posted a £724 million loss in the six months to August 27.
A huge loss comes a year after the company reported a £219 million profit. The cash outflow for the same period was reported at 100 million while the firm expects to report an inflow of £28 million for the second part of the year.
Whitbread said it plans to spend between £120 million to £130 million on capital expenditures for the full year, in addition to £40 million set aside for new acquisitions in Germany. In this market, Whitbread already has 29 cites but wants this count increased to 68 hotels.
The hospitality company reported cash flow of £936 million after it successfully raised £1 billion in June.
“The strength of the Premier Inn brand should ensure it continues to outperform budget branded and independent competitors in a challenging market place, evidenced by Premier Inn’s market share increasing to 10.5% from 7% in the first half,” analysts at Liberum wrote in a note.
Whitbread share price initially gained about 4% before erasing these gains to trade 0.53% in the negative at 2232p.
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