# Whitbread PLC Q1 Trading Update: Sales Growth and Positive Outlook

- Link: https://www.directorstalkinterviews.com/whitbread-plc-q1-trading-update-sales-growth-and-positive-outlook/4121160650
- Published: 2024-06-18T08:02:33+01:00
- Author: Amilia Stone

**[Whitbread PLC](https://www.directorstalkinterviews.com/ftse-company/whitbread-plc/wtb.l)**(
LON:WTB) has announced its Q1 trading update.

**Summary**

·      Group total sales grew 1% to £739m, driven by improved UK trading and continued
progress in Germany

·      Premier Inn UK:

o As expected, trading performance strengthened during the quarter and Q1 accommodation
sales were in line with last year and up 55% versus FY20; total RevPAR was 2% behind
and 38% ahead of FY20

o This meant that our total accommodation sales growth was 0.6pp ahead (Q1 FY24:
0.3pp) versus the midscale and economy sector^(1) and our RevPAR premium was £5.62(
Q1 FY24: £6.12; Q1 FY20: £2.32)

o Food and beverage (‘F&B’) sales were 1% behind with strong breakfast sales driven
by high occupancy in our hotels offset by softer trading in a number of our branded
restaurants

·      Premier Inn Germany:

o Total accommodation sales were up 15%^(2), led by the increasing maturity of our
estate and continued room growth

o Total estate RevPAR increased to €57 and our more established hotels RevPAR was
€61, outperforming the wider M&E market^(3)

·      £150m share buy-back: on track with 3.2m shares purchased so far for a total
consideration of £96m

·      Confident in full year outlook, underpinned by our strong commercial programme
and good progress on cost efficiencies

> **Comment from Dominic Paul, Whitbread Chief Executive:**
> _“Our UK trading results strengthened during the quarter and we continued to grow
> accommodation sales ahead of the market. Underpinned by the favourable supply 
> backdrop, total accommodation sales and RevPAR remained significantly ahead of
> pre-pandemic levels. In Germany, we delivered another strong performance, led 
> by the increasing maturity of our estate and continued room growth. Our cohort
> of more established hotels is continuing to outperform the M&E market and we remain
> on course to achieve the important milestone of reaching break-even on a run-rate
> basis during the second half of 2024._
> _“Whilst the normal booking pattern means our forward visibility remains limited,
> our forward booked position is positive and we remain confident in the full year
> outlook. This reflects a more encouraging trading performance in the UK, our strong
> commercial programme and increased cost efficiencies, as well as good progress
> in Germany._
> _“Our Accelerating Growth Plan to optimise F&B at a number of sites and add 3,500
> rooms to our UK pipeline is on track and will increase our momentum to deliver
> long-term profitable growth. With significant potential in both the UK and Germany,
> supported by the structural reduction in supply and our asset-backed balance sheet,
> our strategic plans are set to deliver a step change in our performance.”_

**Q1 FY25 summary (versus Q1 FY24)**

| _ _ | **_UK_** | **_Germany_****_^(2)_** | **_Total_** | 
| Sales growth: |  |  |  | 
| _   Accommodation_ | 0% | +15% | +1% | 
| _   Food & beverage_ | (1)% | +13% | (1)% | 
| _   Total_ | 0% | +15% | +1% | 
| Like-for-like sales growth: |  |  |  | 
| _   Accommodation_ | (2)% | +6% | (1)% | 
| _   Food & beverage_ | (1)% | +2% | (1)% | 
| _   Total_ | (1)% | +5% | (1)% |

_Notes:_

_1: STR data, standard basis, 1 March 2024 to 30 May 2024, UK M&E market excludes
Premier Inn_

_2: Germany sales growth in GBP_

_3: STR data, standard basis, 1 March 2024 to 30 May 2024, Germany M&E market excludes
Premier Inn_

**Q1 performance**

Having been 1% behind last year in the first seven weeks, our trading performance
strengthened during the remainder of the quarter and accommodation sales recovered
to be in line with last year and up 55% versus FY20. While midweek business demand
and peak leisure demand remained robust, weekend demand at short-lead was slightly
softer, particularly in London, reflecting a return to more normalised levels after
what was a very strong performance last year. However, with the strength of our 
brand and the benefit of our commercial programme, we continued to outperform the
market with total accommodation sales growth 0.6pp ahead (Q1 FY24: 0.3pp ahead) 
delivering a RevPAR premium of £5.62 (Q1 FY24: £6.12; Q1 FY20: £2.32).

UK F&B sales were 1% behind last year, with strong breakfast sales driven by high
occupancy in our hotels offset by softer trading in a number of our branded restaurants.

In Germany, total accommodation sales were up 15% versus last year led by the increasing
maturity of our estate and continued room growth. Our total estate RevPAR increased
to €57 (Q1 FY24: €55) and our cohort of more established hotels continued to perform
ahead of the wider market, achieving a RevPAR of €61 (Q1 FY24: €61).

**Outlook**

Whitbread Plc remain confident in the full year outlook. In the UK, recent trading
has been more encouraging as we move into the peak periods of the year and our forward
booked position remains positive. We are continuing to execute our commercial programme
and net inflation is now expected to be at the lower end of guidance as a result
of increased cost efficiencies.

In Germany, we have launched our first online-focused brand campaign and are trading
well. We are on course to break-even on a run-rate basis during calendar year 2024
which is a key milestone as we progress towards our longer-term target of 10-14%
return on capital.

**Interim results**

The Group’s interim results will be announced on 16 October 2024.

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