If you are covering Whitbread’s latest trading update, please see the following comment from Mamta Valechha, consumer discretionary analyst at Quilter Cheviot:
“Whitbread, owner of Premier Inn, posited a solid trading update this morning. Its UK revenue per available room (RevPAR) came in better than expected with an increase of 2.5% in Q3 and showing another sequential improvement quarter-on-quarter. The company’s current trading remains strong, with RevPAR accelerating to 4% in the first six weeks of Q4. This was driven predominantly by London where it grew 7% and Regions up 0.9%, with pricing having the biggest impact in both areas.
“In Germany, RevPAR was up 6.7% with the more mature estate up 9%, significantly outperforming the wider market. This was driven by both higher pricing, which saw an 2.5% increase, and 3% higher occupancy.
“Meanwhile, food and beverage sales in the UK declined by 4%. This was driven by Whitbread’s accelerated growth plan which has included disposals and some restructuring of underperforming restaurants into new rooms.
“Management has largely reiterated its FY26 guidance, with the exception of a slight upgrade to its cost efficiency target, which is said to be better than previously guided. This implies net cost inflation of 2%, down from the 2.5% previously communicated, and should lead to a low single digit upgrade to FY26 consensus numbers.
“Whitbread also expects to see a 50bps improvement in its cost inflation guidance for FY27, taking it to 3.5% to 4.5%, as the company revised down the estimated impact of its business rates by £5m to £35m. Given the changes to business rates is still under review and the pub sector seems to be getting a reprieve, continued uncertainty means the company will explore a variety of options to drive profitability. We expect a more detailed update will come at the FY26 results at the end of April.”
