Whitbread’s hotel woes
PREMIER Inn owner Whitbread suffered a major slump in profits after it offloaded coffee chain Costa for £3.9bn.
Analysts warned that the sale left Whitbread ‘extremely dependent’ on its hotels business as profits plunged 39pc to £260m in the 12 months to February 28.
The group blamed one-off costs relating to the disposal of Costa to Coca-Cola last year for hammering profits.
In the UK, hotel sales fell 0.6pc amid declining demand, particularly among business travellers, in the final three months of the financial year.
Whitbread lowered its full-year dividend to 99.65p per share from 101.15p a year earlier. Shares fell 6.2pc, or 294p, to 4460p after the announcement.
Whitbread has more than 800 hotels in the UK and is plotting a major expansion in Germany where it has 7,000 rooms in the pipeline. It is expecting to take a £12m hit this year as it invests in the country.
The results are Whitbread’s first full-year figures as a hotels business since the Costa deal.
Shareholders are set to pocket £2.5bn from the sale, with Whitbread having already started to buy back £500m worth of investors’ stock.
The group will kick off a further share buyback of up to £2bn in June.