TIDMWTB
RNS Number : 1639C
Whitbread PLC
17 June 2021
Q1 FY22 Trading Update
Continued market outperformance in the UK, strong leisure demand
post 17 May
Summary
Throughout this release all percentage growth comparisons are
made on a two-year basis, comparing the current year (FY22)
performance for the 13 weeks to 27 May 2021 to the same period in
FY20 (13 weeks to 30 May 2019), with FY20 being the last financial
period before the onset of the COVID-19 crisis.
-- 98% of UK hotels and restaurants now open, with Premier Inn
UK's total accommodation sales performance 11.0 pp ahead of the
M&E market(1) in the quarter
-- Total UK accommodation sales were down 60.9% in the quarter,
with Food and Beverage total sales down 86.0%, reflecting the
Government's lockdown restrictions that were in place for most of
the quarter
-- Encouraging trends post 17 May, when overnight leisure stays were permitted
-- Very strong forward booking trends in tourist locations
throughout the summer, and improved forward bookings across the
majority of the rest of the estate, with the exception of airport
locations and central London
-- Continued gradual increase in business demand
-- 19 of 30 operational hotels open in Germany, occupancy levels
improving in a challenging but recovering market
-- "Investing to win in FY22" and driving outperformance:
o "Rest Easy" above the line marketing campaign, launched in
April, is driving strong website volumes
o New business booker tools and enhanced Travel Management
Company distribution will help continued recovery in business
demand
o Planned return to pre-COVID-19 levels of hotel refurbishment
capex for FY22; commenced rollout programme for 1,500 additional
Premier Plus rooms
o 3 new organic hotels added to the pipeline in Germany, taking
the open and committed pipeline to 73 hotels and over 13,500
rooms
o GBP100m three-year cost efficiency programme well underway
-- Cash outflow for the quarter was in-line with previous
sensitivity guidance. At the end of the quarter, net debt was
GBP70.6m, benefitting from the build up of customer deposits for
the summer
-- Now targeting net-zero carbon emissions by 2040, bringing
forward the original target by 10 years
-- Outlook and guidance remain unchanged from 27 April 2021
Comment from Alison Brittain, CEO:
"The Group traded significantly ahead of the market during the
quarter, despite the impact of the UK Government restrictions that
were in place for the majority of the first quarter. Trading in the
UK since May 17, when overnight leisure stays were permitted, and
when our restaurants fully reopened for indoor service, has been
encouraging. Additionally, our forward bookings continue to
improve, benefiting from the anticipated post-lockdown bounce in
leisure demand, and a continued gradual improvement in business
bookings. During the first quarter we opened 10 new hotels in the
UK.
We hold a uniquely advantaged position in the UK, built on our
scale, market-leading direct distribution, and strength of the
Premier Inn brand. Our position as the market leader in the
fast-recovering budget sector is combined with a broad, domestic
focussed customer mix. This, alongside our financial flexibility
and ability to invest in our customer proposition when others are
constrained, means we are well-positioned to continue our strong
performance.
In Germany, we now have a business of scale with a national
footprint. Our accelerated pipeline growth saw 3 new hotels added,
taking our open and committed pipeline to 73 hotels, and we
continue to assess opportunities to grow the pipeline through both
organic and non-organic routes. As in the UK, the German hotel
market is recovering, and we anticipate a steady improvement in
occupancy rates in our 30 operational hotels as we move through the
summer.
In both markets, our financial strength will enable us to
capitalise on the enhanced structural opportunities that will
exist, and drive long-term value for all stakeholders."
Q1 Financial Performance
Financial highlights
Q1 FY22 vs Q1 FY20
--------------------- ----------------------------
UK Germany Total
--------------------- -------- -------- --------
Sales growth:
Accommodation (60.9)% 8.8% (60.5)%
Food & beverage (86.0)% (18.8)% (85.9)%
Total (70.1)% 4.1% (69.8)%
-------- -------- --------
Like-for-like sales
growth:
Accommodation (62.1)% (80.9)% (62.2)%
Food & beverage (86.2)% (88.3)% (86.2)%
Total (70.9)% (82.1)% (71.0)%
-------- -------- --------
Total UK accommodation sales were 60.9% behind Q1 FY20 as a
result of the Government restrictions that were inplace throughout
the quarter. Despite only essential business travel stays being
permitted in the period prior to 17 May, occupancy levels grew
steadily from 35% at the start of the quarter to around 50% in the
first two weeks of May, driven by resilient demand from business
trades customers. Average room rate of GBP40.94 was down 33.4%
versus FY20. The majority of our hotel estate remained open during
the quarter, a function of our hotels only requiring low levels of
occupancy to contribute to fixed costs. By 17 May, when overnight
leisure stays were permitted, 98% of the hotel estate was open.
Post 17 May, trading has been strong, with high levels of demand
in tourist locations in particular, driven by the anticipated
bounce in leisure demand post reopening, and the period including
May half-term school holidays. Demand has also improved markedly
across the rest of the estate, with the exception of central London
and airport locations. Total UK accommodation sales improved to
down 27.3% in the 30 day period from 17 May to 14 June 2021 versus
the same period in FY20, with occupancy levels at 74.2%. The more
flexible labour model, that was implemented across the estate in
the second half of the prior year, has enabled the business to
quickly flex-up hours from its existing labour force, in response
to the significant increase in demand in both hotels and
restaurants.
Total UK food and beverage sales were 86.0% behind Q1 FY20
reflecting the fact that all restaurants were closed from the start
of the quarter until 12 April, when outdoor service was permitted
in England, where 165 restaurants opened for outdoor service in the
following weeks, while over 37 restaurants were opened in Scotland
for restricted indoor service. The remaining estate, with the
exception of a small number of restaurants that were being
refurbished, reopened on 17 May. In the 30 day period from 17 May
to 14 June 2021, total food and beverage sales were down 24.9%
versus the same period in FY20.
The Group's balance sheet strength has allowed investment in
commercial initiatives, including the high-profile "Rest Easy"
cross-platform advertising campaign, launched in mid-April, that is
driving high levels of brand consideration and website visits.
Actions to drive business demand are well-underway, including
improved business account management, a relaunched business booker
tool and a broadened Travel Management Company distribution
platform. Whilst these actions are helping drive a continued
increase in business bookings, a sustained recovery in office-based
business demand is not anticipated until the Autumn.
During the quarter, 10 new hotels were opened, totalling 1,189
rooms and 5 hotels were disposed, totalling 169 rooms, as the Group
continues to take the opportunity to optimise the estate as and
when opportunities arise.
In Germany, 30 hotels were operational at the end of the
quarter, of which 19 were open, 7 were being rebranded to Premier
Inn, and 4 were temporarily closed due to low levels of demand in
the market in those locations. Government restrictions were in
place throughout the quarter, severely restricting demand levels in
the market, and as a result, Premier Inn Germany occupancy levels
were 14.6% in the quarter, improving to 18.2% in the last two weeks
of May, as Government restrictions began to ease, and consumer
confidence improved. Total Germany accommodation sales were 8.8%
ahead of Q1 FY20, reflecting the larger estate that is now in
operation. During the period, three new hotels were added to the
pipeline, in Rosenheim, Hamburg Meile and Berlin Airport, bringing
the total operational and committed pipeline to 73 hotels and over
13,500 rooms. The Group continues to assess opportunities to grow
the pipeline through both organic and non-organic routes.
Outlook
The Group's outlook and guidance is unchanged from our full year
results on 27 April 2021, despite the four-week delay in the UK
Government's Step 4 of lockdown release. We expect leisure demand
in coastal and other tourist locations to remain very strong
throughout the summer, while the full recovery of leisure demand is
dependent on the final release of lockdown, and the return of
unrestricted events. Trades business demand remains resilient,
albeit at prices some way below pre-COVID levels, and our
expectation is that office-based business demand does not start to
recover in earnest until the Autumn.
Notes:
1: STR data, full inventory basis, M&E market excludes
Premier Inn
For more information please contact:
Investor queries | Whitbread | investorrelations@whitbread.com
Media queries | Tulchan Communications, Sunita Chauhan / Jessica Reid | +44 (0) 20 7353 4200
A live Q&A teleconference hosted by Alison Brittain and
Nicholas Cadbury will be held at 8:00am BST. Details of which are
below.
Q&A teleconference participant dial-in numbers:
Start time - 8:00am BST
United Kingdom (Local): 020 3936 2999
All other locations: +44 203 936 2999
Participant Access Code: 467868
Appendix:
1) Premier Inn UK key performance indicators
March April May Q1
=================================== ======== ======== ======== =========
Room capacity open (average) 72% 83% 95% 83%
Occupancy (full inventory) 32.8% 40.2% 56.0% 42.2%
Average room rate GBP40.94
Revenue per available room GBP17.30
Total accommodation sales
growth (69.8)% (63.4)% (48.8)% (60.9)%
=================================== ======== ======== ======== =========
Restaurants open (average) 0% 17% 67% 26%
Total food and beverage
sales growth (98.4)% (92.6)% (64.6)% (86.0)%
=================================== ======== ======== ======== =========
Total sales growth (80.5)% (74.3)% (54.4)% (70.1)%
Outperformance vs M&E market(1) 7.5pp 11.0pp 15.0pp 11.0pp
Market share gains(2) 7.5pp 7.3pp 5.2pp 6.4pp
=================================== ======== ======== ======== =========
2) Premier Inn Germany key performance indicators
March April May Q1
================================ ======== ======== ======== =========
Room capacity open (average) 62% 63% 67% 64%
Occupancy (full inventory) 13.6% 14.0% 16.4% 14.6%
Average room rate GBP32.42
Revenue per available room GBP4.75
Total accommodation sales
growth (4.2)% 65.0% (5.4)% 8.8%
================================ ======== ======== ======== =========
Total food and beverage
sales growth (18.4)% (17.3)% (20.4)% (18.8)%
================================ ======== ======== ======== =========
Total sales growth (6.3)% 46.3% (7.7)% 4.1%
================================ ======== ======== ======== =========
Notes:
1: STR data, full inventory basis, M&E market excludes
Premier Inn
2: STR data, revenue share of total UK hotel market
3) UK Quarterly sales & RevPAR growth
FY21 FY22
====================== ================================================== ========
Q1 Q2 Q3 Q4 Full Year Q1(1)
====================== ======== ======== ======== ======== ========== ========
Accommodation (79.1)% (77.1)% (55.4)% (70.3)% (70.4)% (60.9)%
Food & Beverage (80.1)% (72.6)% (53.9)% (91.9)% (74.4)% (86.0)%
UK total sales
growth (79.5)% (75.6)% (54.9)% (79.0)% (71.8)% (70.1)%
====================== ======== ======== ======== ======== ========== ========
Regions (79.2)% (73.8)% (48.2)% (66.1)% (66.8)% (56.3)%
London (78.7)% (88.9)% (78.0)% (83.5)% (82.3)% (77.3)%
UK accom. sales
growth(1) (79.1)% (77.1)% (55.4)% (70.3)% (70.4)% (60.9)%
====================== ======== ======== ======== ======== ========== ========
Accommodation (79.4)% (77.6)% (56.2)% (70.7)% (70.9)% (62.1)%
Food & Beverage (80.5)% (72.8)% (54.3)% (92.0)% (74.7)% (86.2)%
UK LFL total
sales growth (79.8)% (76.0)% (55.5)% (79.3)% (72.3)% (70.9)%
====================== ======== ======== ======== ======== ========== ========
Regions (79.8)% (74.4)% (49.2)% (66.6)% (67.5)% (57.7)%
London (79.5)% (89.3)% (78.6)% (84.0)% (82.9)% (78.7)%
UK RevPAR growth(1) (79.7)% (77.7)% (56.3)% (70.8)% (71.1)% (62.4)%
====================== ======== ======== ======== ======== ========== ========
Regions (79.7)% (74.5)% (49.4)% (66.6)% (67.6)% (57.8)%
London (79.1)% (89.1)% (78.6)% (83.8)% (82.7)% (78.3)%
UK LFL RevPAR
growth(1) (79.6)% (77.7)% (56.4)% (70.8)% (71.0)% (62.3)%
---------------------- -------- -------- -------- -------- ---------- --------
Regions (78.3)% (73.9)% (53.5)% (71.6)% (69.2)% (63.8)%
London (79.6)% (87.6)% (79.9)% (83.5)% (82.7)% (80.5)%
M&E market
total sales
growth(2) (78.6)% (77.4)% (61.0)% (75.0)% (72.8)% (68.0)%
---------------------- -------- -------- -------- -------- ---------- --------
Regions (78.4)% (73.7)% (53.0)% (71.2)% (68.9)% (64.1)%
London (79.9)% (87.8)% (80.1)% (83.6)% (82.9)% (81.0)%
M&E market
total RevPAR
growth(2) (78.7)% (77.3)% (60.7)% (74.7)% (72.7)% (68.4)%
---------------------- -------- -------- -------- -------- ---------- --------
Notes:
1: Q1 FY22 data is vs Q1 FY20
2: STR data, M&E market includes Premier Inn
4) Comparison versus FY21
Financial highlights vs FY21
Q1 FY22 vs Q1 FY21
--------------------- ----------------------------
UK Germany Total
--------------------- -------- -------- --------
Sales growth:
Accommodation 87.0% 140.7% 87.6%
Food & beverage (29.7)% 138.0% (29.2)%
Total 45.7% 140.3% 46.4%
-------- -------- --------
Like-for-like sales
growth:
Accommodation 86.0% 31.9% 85.4%
Food & beverage (29.9)% 46.0% (29.7)%
Total 44.9% 33.6% 44.8%
-------- -------- --------
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END
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