Business | Tourism
Whitbread shares up on back of Premier chain
Whitbread, Britain's biggest hotel operator, reported strong 39-weeks sales growth on Monday, sending its shares higher, as its budget Premier Inn chain benefited from businesses looking to save money.
- Reuters
- Published: 23:32 December 8, 2008
London: Whitbread, Britain's biggest hotel operator, reported strong 39-weeks sales growth on Monday, sending its shares higher, as its budget Premier Inn chain benefited from businesses looking to save money.
The group, which also owns the Beefeater pub restaurant chain and Costa Coffee, reported a 6.7 per cent increase in group like-for-like sales for the 39 weeks to November 27.
"Whitbread has strong brands positioned in attractive, value-for-money sectors. Our trading has been robust, although we have seen some softening of growth in November," said Chief Executive Alan Parker.
Shares in Whitbread, which have outperformed the FTSE All Share Leisure & Travel index by eight per cent since the start of the year, were up 5.3 per cent at 802.5 pence at 0945 GMT, having earlier risen by as much as nine per cent.
Premier Inn, which has over 550 hotels in the United Kingdom and accounts for about 70 per cent of Whitbread's profits, increased like-for-like sales by 8.5 per cent. Revenue per available room (RevPAR), which is the hotel industry's main measurement of performance, rose by 5 per cent.
The budget hotel chain has benefited from businesses cutting spending because of deteriorating economic conditions.
Its Business Account scheme saw a 33 per cent rise in total sales during the period and a 16 per cent increase in new users.
Corporate customers now account for about two-thirds of Premier Inn's sales.
"We expect the business segment to remain strong, reflecting an element of trading down amongst corporate travellers to the value offer," said Investec analyst Matthew Gerrard, who maintained a 'buy' recommendation on the stock.
Premier Inn's performance contrasts with the wider hotel industry.
Intercontinental Hotels, the operator of the InterContinental, Crowne Plaza, and Holiday Inn hotel chains, last month warned of a sharp fall in October trading
Meanwhile, US-based hoteliers Marriott International and Sheraton-owner Starwood both reported lower third-quarter earnings.
Whitbread said its restaurant division, which, as well as Beefeater, includes Brewers Fayre and Table Table, lifted comparable sales by 5.9 per cent. Like-for-like sales at Costa Coffee grew 2.6 per cent.
Numis repeated its 'buy' recommendation and 1,222 pence price target on the stock.
"We consider this to be a very encouraging and resilient performance," said Numis analyst Wyn Ellis.
On a conference call with reporters, finance director Chris Rogers said the group had still achieved single-digit sales growth in each of its divisions during November despite growth having been "a little softer" across all divisions.
Share this article
Popular in Business
-
XPRESS
Way to go this DSF
A fun-filled route to guide you to all the happening dos in town
Business Editor's choice
-
Shaikh Mohammad reaffirms UAE unity
Vice-President quashes talk of discord and reassures investors on the strength of Dubai's economy
-
Pizzazz on the palm: A Nikki Bisiker project
Bright, bold and ultra glam are the top notes of this apartment in The Palm Jumeirah's beautiful marina
-
flydubai starts service to Sudanese capital
Dubai's first low cost airline, celebrated its eighth inaugural flight in less than six months
