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.
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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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