Whitbread PLC (LSE:WTB) posted a mixed set of interim results, with a share buy-back of up to £100 million and new five-year profit guidance to sweeten flat revenues and a fall in profit.
The Premier Inn owner said the half-year to 29 August was a period that saw "a slightly softer UK demand environment", while management made investments in the five-year 'accelerating growth plan', partially offset by positive momentum in its newer market of Germany.
Revenue came in at £1.57 billion, which was just £4 million below the same period last year, as UK revenue per available room was 1% behind last year, food and beverage (F&B) sales fell 7%, but Premier Inn Germany increased total accommodation sales 22%.
Group underlying profit on an adjusted EBITDAR basis fell 3% to £611 million and statutory pre-tax profit plunged 22% to £309 million.
But the FTSE 100-listed company said it was "making excellent progress" on its five-year plan that chief executive Dominic Paul is "set to deliver a step change in our performance which will fund significant returns to shareholders", with the aims of expanding its estate to 98,000 rooms by the 2030 financial year, compared to the current estate of almost 86,000 rooms across 55 hotels.
During the period, Whitbread invested in 'optimisation' of F&B offers, planning for 3,500 rooms, a new reservation system to launch in 2025, alongside £60 million in annual cost efficiencies.
As a result, it said, it now expected to increase adjusted profit before tax in 2030 by at least £300 million compared to 2025 and generate more than £2 billion for dividends, share buy-backs and potential investments.
As well as the buyback, which is to be completed by the time of results next May, the interim dividend was hiked to 36.4p per share.
Paul reported an "improving trend" in the first weeks of the second half after a soft start to September, with the result that total UK accommodation sales for the first six weeks were down 1% versus last year.
The outperformance versus the market increased to one percentage point, while German accommodation sales were up 26%.