Whitbread ‘well placed’ in the UK despite pandemic losses

By Stuart Stone

- Last updated on GMT

Well placed: 'Whitbread’s long-term strategy remains as relevant and compelling as ever,' Whitbread CEO Alison Brittain said
Well placed: 'Whitbread’s long-term strategy remains as relevant and compelling as ever,' Whitbread CEO Alison Brittain said

Related tags Whitbread Pubco + head office Finance

The operator behind brands such as Brewers Fayre, Beefeater and Premier Inn has revealed a swing from £219.9m in pre-tax profit to a statutory loss of £724.7m in its interim first half results for the 2021 financial year.

What’s more, Whitbread also revealed overall revenue during its H1 trading period was down 76.9% year-on-year to £280.5m, resulting in an adjusted loss before tax of £367.4m.

Additionally, the operator announced that adjusted earnings before interest, tax, depreciation, amortisation and restructuring or rent costs (EBITDAR) dropped from £426.7m to a loss of £153.7m.

At the end of H1, Whitbread had access to £936.2m of cash and cash equivalents, an undrawn Revolving Credit Facility (RCF) of £950m, and up to £600m available under the Government’s Covid Corporate Financing Facility (CCFF) scheme.

The operator’s latest figures come after the PLC revealed sales during the first half of its financial year to 27 August slipped by almost 80% due to the forced closure of most of its sites. 

Whitbread also reported in August that its total UK sales had improved to just 38.5% down year-on-year with its accommodation division said to be performing ahead of the market and its restaurants "boosted by the positive impact of the Eat Out to Help Out scheme".

On top of running 800 Premier Inns across the UK – boasting 76,000 rooms – Whitbread also operates more than 400 venues under its Brewers Fayre, Beefeater, Cookhouse & Pub and Table Table brands. 

The former brewer, which in 1968 reached a deal to brew Heineken under licence, offloaded its breweries and pubs in 2001 to focus on its estate of hotels and restaurants.

Relevant and compelling strategy

As reported by The Morning Advertiser​ in September, Whitbread announced as many as 6,000 members of staff​ could face redundancy following a collapse in sales during the coronavirus crisis.

The business currently employs in the region of 35,000 workers across the UK meaning more than one-in-six could lose their jobs. 

According to reports in The Guardian​​, Whitbread was also in the process of cutting 15% to 20% of jobs at its head office, a further 150 positions.

“Whitbread’s long-term strategy remains as relevant and compelling as ever,” Whitbread CEO Alison Brittain said of the company’s latest results. 

“The impact of the Covid pandemic on the hotel sector will undoubtedly be significant and we are already seeing signs of distress and constraint in the competitive landscape. This is likely to accelerate the structural changes in the market with supply contraction and constrained investment amongst independent and budget branded operators in both the UK and Germany.

“We hold a uniquely advantaged position in the UK market as the largest player with the strongest brand. Our financial flexibility and resilience, combined with a strong balance sheet, give us the ability and the confidence to invest with discipline and focus on strong long-term returns. 

“We will be well placed to enhance our market leadership position even further in the UK, and accelerate our growth in Germany, supporting our guests and teams and driving long-term value for all our stakeholders.”

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