Premier Inn owner Whitbread has said that a restructuring of its hotels and restaurants has resulted in approximately 1,500 job cuts, rather than the 6,000 predicted, and that it has outperformed in the British market.
Shares in Whitbread, which also owns the Beefeater, Brewers Fayre and Bar + Block chains, were up by 4.5% to 3,196.9 pence after it said that it hit targeted cost savings as more employees took a cut in maximum contracted hours.
Britain's hospitality industry is suffering from the coronavirus crisis, with travel and entertainment spending being severely limited by government rules to stop COVID-19's spread.
"Lockdowns drive the short term narrative but we argue that WTB will be the quickest company in our hotel coverage to recover," Jefferies analysts said.
After local restrictions in the run-up to Christmas, England moved into a third lockdown last week, shutting two-thirds of Whitbread's hotels and all of its restaurants.
Although Whitbread's total UK accommodation sales were down by 55.2% for the 13 weeks that ended on November 26, it said that its performance over this period was 8.9 percentage points ahead of the midscale and economy market.
"With the vaccination programme underway, we look forward to the potential gradual relaxation of restrictions from the spring," Whitbread chief executive Alison Brittain said on a call.
Brittain told reporters that Whitbread is working on the assumption that there will be a tiering system after the lockdown and expects it to be in place beyond Easter.
Whitbread, which raised £1 billion last year to weather the coronavirus crisis, also said that it has cash on deposit of £814.9 million and access to a £900 million undrawn revolving credit facility.
Expansion In Germany, Sales Maturity And Losses
The group expects investment in its German expansion plans and COVID-19 curbs to delay the sales maturity of its operating hotels by 12 to 18 months and said that losses there will increase in fiscal 2022 and continue into 2023.
The recent acquisition of 13 hotels in Germany will result in a loss of approximately £10 million there next year while the sites are refurbished, Whitbread said.
News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.
