Whitbread PLC: 2016 First Quarter Trading Update

Dunstable / UK. (wbp) British Whitbread PLC in late June reported its trading performance for the 13 weeks to 02 June 2016.

Sales update (percent change versus prior year)

Sales for the 13 weeks to 02 June 2016	Like for like sales (1)	Total sales (2)
Premier Inn	2.1%	8.0%
Restaurants	0.2%	1.4%
Hotels and Restaurants	1.5%	5.9%
Costa	2.6%	11.5%
Total	1.8%	8.0%

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Whitbread Chief Executive, Alison Brittain said, «Whitbread delivered total sales growth of 8.0 percent in the first quarter as we continue with a relentless focus on our customers, innovation and investing in our strong brands. Costa has started the year well and Premier Inn continues to win share, albeit in a weaker than expected hotel market.Industry data has continued to show a soft hotel market in the UK, particularly in London. During the quarter Premier Inn grew total sales by 8.0 percent and like for like sales by 2.1 percent, which benefited from our substantial hotel extension programme. Against a strong comparator Premier Inn like for like revpar declined by 0.5 percent and total revpar declined by 1.2 percent. This reflects the market environment, the expected dilution of the impact of the extension programme and the circa 3’600 new rooms added in the final quarter of last year, which will mature over the next few years. We are on plan to open 4’000 to 4’500 new hotel rooms in 2016/2017.Costa grew total sales by 11.5 percent with UK retail like for like sales growth recovering to 2.6 percent. We remain on plan to open 230 to 250 Costa stores worldwide and have increased our target to install at least 1’250 new Costa Express machines this year. Although it is early in our new financial year and despite current market conditions, with the benefit of our cost efficiency programme we remain confident of making good progress for the full year». Trading highlights for the 13 weeks:

Hotels and Restaurants

• In the quarter, Premier Inn grew total sales by 8.0 percent and like for like sales by 2.1 percent benefitting from the extension programme.
• Like for like revpar for the quarter was down 0.5 percent impacted, as expected, by our substantial hotel extension programme and as stated above Premier Inn total revpar declined by 1.2 percent, with occupancy down 1.5 percent points year on year to 79.1 percent. Revpar was up 1.2 percent for the total market (3) and up 1.6 percent for the Midscale and Economy market (3).
• In London Premier Inn grew total sales by 5.6 percent in the quarter. Premier Inn like for like revpar was down 3.0 percent reflecting a soft market and the impact of our extension programme. Total revpar was down 6.0 percent, diluted by the high number of rooms which were opened in the final quarter of last year. Revpar was down 1.6 percent for the total market (3) and down 3.5 percent for the Midscale and Economy market (3).
• In the regions Premier Inn grew total sales by 8.5 percent. Like for like revpar was up by 0.3 percent again impacted by our hotel extension programme whilst total revpar was down 0.2 percent again diluted by the number of rooms opened in the final quarter of last year. Revpar was up 3.2 percent for the total market (3) and up 3.0 percent for the Midscale and Economy market (3).
• Restaurants delivered total sales growth of 1.4 percent and like for like sales growth of 0.2 percent, slightly ahead of a soft pub restaurant market outside the M25.

Costa

• Costa had a good start to the year, growing total system sales by 11.4 percent to 414.3 million GBP, 10.7 percent at constant currency). Within this, franchise system sales grew by 10.5 percent to 158.7 million GBP.
• UK Retail system sales, grew by 11.4 percent to 226.5 million GBP with equity stores growing like for like sales by 2.6 percent. We opened 35 net new UK stores.
• Costa Enterprises (including Costa Express UK + International) delivered system sales of 103.1 million GBP, up 11.2 percent. Costa Express maintained its success installing a record 448 Costa Express machines (5) in the quarter taking the total number of machines to 5’664.
• International system sales grew by 11.5 percent to 88.3 million GBP (8.5 percent at constant currency). In China we remain excited about the long term growth opportunity although recently we have seen a tougher trading environment, due to a weaker Chinese economy. We opened 18 net new stores in the quarter with 11 in EMEI and 7 in Asia.

Group

The Group’s strong financial position remains unchanged.

Site detail	03 March 2016	Opened	Closed	02 June 2016
Premier Inn UK (4)	64’599	329		64’928
Premier Inn Germany	201			201
Premier Inn International	2’164	145		2’309
Total Premier Inn (rooms)	66’964	474		67’438
Restaurants (sites)	409	2		411
Costa Retail Equity	1’196	25	-13	1’208
Franchise	539	22		561
Costa Enterprises	299	3	-2	300
Total Costa UK Stores (Retail + Enterprises)	2’034	50	-15	2’069
Costa EMEI	838	27	-16	849
Costa Asia	405	17	-10	412
Total Costa (stores)	3’277	94	-41	3’330
Costa Express Machines (5)	5’216	448		5’664
Total Equity	1’342	29	-15	1’356
Total JV	383	14	-7	390
Total Franchise	1’552	51	-19	1’584

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1. Like for like sales which are stated Pre IFRIC 13 adjustment are for Premier Inn – UK and Ireland and for Costa UK equity stores and Restaurants – UK. Post IFRIC 13 for the 13 weeks to 02 June 2016 Premier Inn like for like and total sales would be the same; Restaurants like for like sales would be 0.2 percent points higher and growth in total sales 0.1 percent point higher; Costa like for like sales would be 0.1 percent point lower, growth in total sales would be the same and growth in total system sales the same.
2. Premier Inn total sales include UK and International, all other Premier Inn numbers included in this statement relate to UK and Ireland only.
3. Hotel market performance data collected by STR Global.
4. Includes hub by Premier Inn.
5. Costa Express machines installed means net machine installations.