Whitbread Shares Jump as Premier Inn Owner On Course to Deliver ‘Step Change’ in Profits, Margins, and Returns

Premier Inn owner Whitbread (LON: WTB) saw its shares jump over 4% on Wednesday after unveiling plans to significantly boost profits, margins, and shareholder returns over the next five years.

The company announced an ambitious strategy to generate at least £300 million in additional profit and distribute over £2 billion through dividends, share buybacks, and targeted investments by 2030.

In its interim results for the 26 weeks ending August 29, Whitbread reported revenue of £1.57 billion, broadly flat compared to the same period last year.

Adjusted profit before tax fell 13% from £391 million to £340 million, attributed to higher investments in its Accelerating Growth Plan (AGP) and a softer UK market.

However, strong growth in Germany helped offset some challenges, with accommodation sales in the region rising 22%.

Dominic Paul, Whitbread’s Chief Executive, highlighted the company’s confidence in its outlook: “We are making excellent progress with our plans and over the next five years are set to deliver a step change in our performance which will fund significant returns to shareholders.”

The company raised its interim dividend by 7% to 36.4p per share and announced a £100 million share buyback, set to be completed by May 2025.

Looking forward, Whitbread aims to expand its portfolio to 98,000 rooms by 2030, with a focus on optimising its food and beverage offerings. The company is also on track to break even in Germany later this year.

Whitbread made no changes to its previous FY25 guidance other than stating that with increased cost efficiencies of £60 million in FY25 (previously £40 million and £50 million), it now expects UK net inflation to be between 2% and 3%. 

We have seen an improvement in recent weeks with a good pick-up in bookings across October and into November.