Premier Inn owner Whitbread PLC's (LON:WTB) hopes for the new financial year are hanging on staycation bookings for its Premier Inn hotel chain and growth in its nascent market of Germany, with a sluggish opening up of international travel.
Before the 17 May pandemic reopening date, the FTSE 100 group said it had 92% of its UK estate open currently and leisure customers will be allowed to check in.
“Roughly 15% of the group’s hotels are dotted around the UK’s coastline and with travel restrictions causing chaos for holidays abroad those locations should benefit,” said analyst Laura Hoy at Hargreaves Lansdown.
“55% occupancy is the magic number at which Whitbread says it can break even, so we’ll be looking for overall bookings to exceed that figure.”
She said the pandemic’s not been all doom and gloom though for Whitbread as it has used its size and stability to grow its market share.
“Last year the group increased its hold on the UK market by 6.9 percentage points— only time will tell if that trend will continue as things loosen up.”
As for the German operations, they are expected to be loss-making both this year and next, but investors will be keen to hear whether the group’s hotels are gaining traction.
Halfords eyes profit from lockdown cycling boom
Halfords PLC (LON:HFD), the car parts and bikes seller, saw a boom in demand as people turned to cycling during the lockdown as a means of getting fit.
“While there may be concerns bike sales might have reached a pandemic peak, revenues from cycling sales continued on a rapid uphill trajectory earlier this year, rising 43% in the 7 weeks to February 19th, indicating a deep-seated shift in transport choices,” suggested Susannah Streeter, the senior investment and markets analyst at Hargreaves Lansdown.
“But supply chain issues have held back growth from shifting up to an even higher gear with the company having difficulties getting hold of the right stock. Halfords said it expected full-year pre-tax profit to come in at £90m - £100m, after better than anticipated trading in the first half of the final quarter. Despite reduced journeys because of the third lockdown, motoring sales have fallen less than expected, and are likely to tick up again as the country eases out of social distancing measures and more people return to a part-time commute,” Streeter said.
Thursday June 17
Trading announcements: Whitbread PLC (LON:WTB)
Finals: Halfords Group PLC (LON:HFD), Dr Martens PLC (LON:DOCS), NextEnergy Solar Fund Limited (LON:NESF), Record PLC (LON:REC), Renold PLC (LON:RNO), Syncona Limited (LON:SYNC), Volex PLC (LON:VLX)
Interims: Safestore Holdings PLC (LON:SAFE)
FTSE 100 ex-dividends to knock 1.39 points off the index: 3i Group plc (LON:III), Land Securities Group PLC (LON:LAND), Intermediate Capital Group PLC (LON:ICP)
Economic data: US jobless claims