While interim results from Whitbread PLC (LSE:WTB) saw profits fall more than expected, Barclays said the updated five-year plan meant there were more positives than negatives in the numbers.
Adjusted profit before tax from the FTSE 100 hotels group fell 13% to £340 million, which was below the £350 million consensus forecast and is likely to lead to a 2-4% reduction on full-year PBT cut by the City today, even if there are more cost savings than expected, analysts at Barclays said.
However, the Premier Inn owner's outlook was better, including a £100 million share buyback that was "not widely expected" accompanying a new five-year plan.
Under the plan, Whitbread expects to generate £300 million more profit and £2 billion of shareholder returns by the 2030 financial year, which Barclays said implies profits around 9% above the City consensus by 2030 and suggests around £100 million of share buyback firepower per annum, funded by sale and leasebacks.
"Importantly", said the Barclays analysts, the company's management also stated that they have seen an improvement in recent weeks with good pickup in bookings across October and into November for the market but also with outperformance driven by the company's own initiatives.
Analysts at Jeffries said the results "were a small miss to consensus", and they felt this would suggest FY PBT consensus coming down by only around 1%.
They noted that the buyback was weaker than the £150 million announced last time, but they "see re-rating potential" as Germany breaks even in the second half and "opex inflation rolls in FY26".
Shore Capital analysts said they are likely to nudge their full-year numbers down by circa £25 million to £500 million to reflect softer UK RevPAR, although the outlook for the second half is more positive.