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Whitbread Sales Edge Higher in Q1 Despite Softer Weekend Demand

Sam Boughedda trader
Updated 18 Jun 2024

Whitbread (LON: WTB), the owner of Premier Inn, revealed in its latest trading update that group sales rose by 1% to £739 million in the first quarter of FY25.

The slight increase was driven by improved trading in the UK and continued progress in Germany.

Premier Inn UK's accommodation sales matched last year's levels and were 55% higher than FY20. While weekend demand softened slightly, particularly in London, overall performance remained ahead of the market. Food and beverage sales were slightly down from last year.

Premier Inn Hotel Whitbread

In Germany, total accommodation sales jumped 15%, with RevPAR exceeding the wider market. Whitbread is confident of reaching break-even in Germany by the second half of 2024.

“Our UK trading results strengthened during the quarter,” said Chief Executive Dominic Paul. He added that this was underpinned by the favourable supply backdrop, total accommodation sales and RevPAR remaining significantly ahead of pre-pandemic levels.

Whitbread explained that its normal booking pattern means forward visibility remains limited. However, its forward-booked position is positive. This reflects a more encouraging trading performance in the UK, its strong commercial programme and increased cost efficiencies, as well as good progress in Germany.

Whitbread's Accelerating Growth Plan for the UK is progressing well. The company believes the strategic plans will increase momentum and deliver significant long-term growth.

Last month, Deutsche Bank initiated Whitbread with a Buy rating and a 4,150p price target. The firm noted that Premier Inn is already the market leader in UK Hotels, with a 12% share. However, the bank feels it still has a compelling rollout opportunity.

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Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.