Investing.com -- Whitbread (LON:WTB) on Thursday reported a modest sales in the UK for the third quarter of fiscal year 2025.
The owner of Premier Inn, reaffirmed its five-year growth plan, with no changes to its previously stated outlook for the fiscal year.
Premier Inn’s UK accommodation sales remained stable compared to the same period in the previous year.
Despite broader economic challenges, total UK accommodation sales were up by 2% in the six weeks leading up to January 9.
“We expect the bond refinancing to drive consensus down to c.£510-515m,” said analysts at Jefferies in a note.
Food and beverage revenues, however, declined in line with expectations, driven by adjustments under Whitbread’s accelerating growth plan.
Germany emerged as a standout performer for Whitbread during the quarter, with a 19% increase in total sales, boosted by strong accommodation sales growth of 23% in local currency terms.
The group’s German operations are on track to achieve profitability on a run-rate basis this year—a milestone for Whitbread’s ambitions in the region. Additionally, the average revenue per available room for Premier Inn’s mature German properties outperformed the broader midscale and economy market.
“The structural shift in UK supply has meant that Premier Inn is continuing to sustain the significant gains made since the pandemic,” said Dominic Paul, chief executive at Whitbread, adding that the group remains optimistic about its ability to deliver incremental profit and maintain market leadership despite limited forward visibility.
Group-wide sales reported a slight decline, down 2%, reflecting mixed performance across geographies and product segments.
However, Whitbread remains focused on its strategic goals, including delivering £300 million in incremental profit through a combination of dividends and share buybacks.
Whitbread also reported substantial progress in cost efficiency, mitigating the effects of inflation and other financial pressures.
Despite a reduction in net finance income and expected cost increases, operational efficiencies are projected to keep net cost inflation manageable at around 2-3%.
The company reaffirmed its confidence in achieving its fiscal year 2025 objectives, citing sustained growth prospects and robust brand foundations.
Whitbread’s ongoing expansion in Germany and its focus on maximizing value within the UK market provide a solid foundation for continued growth into fiscal year 2026.