Whitbread accepts offers on 51 pub restaurants for total of £56m, five-year plan will see pre-tax profit increase by at least £300m: Whitbread has accepted offers on 51 of its pub restaurant sites for a total consideration of £56m. The company said its accelerating growth plan to optimise its UK food and beverage offer “to deliver a more tailored guest proposition”, is “on track” and as a result of its five-year plan the Premier Inn operator expects to increase its adjusted profit before tax versus FY25 by at least £300m. At the end of April, Whitbread, which operates the Beefeater, Bar + Block and Brewers Fayre brands, set out plans to exit 126 of its lower-returning branded restaurants as it seeks to optimise its food and beverage offer. The revamp, costing £500m over four years, will also include the conversion of 112 restaurants to 3,500 new hotel bedrooms. Whitbread said planning applications for more than a third of the 3,500 extension rooms have now been submitted. Whitbread reported its food and beverage sales in the six weeks to 10 October 2024 were 14% behind last year, which were “in line with expectations given the accelerated growth plan”. Total UK accommodation sales at Premier Inn were 1% behind the previous year. However, the company said with the continued deployment of its commercial initiatives, its outperformance versus the market increased to one percentage point. The company stated: “We have seen an improving trend across the current trading period, after a soft start to September. Occupancy remained strong over the period at 84.2%, with London at 82.5% and the regions at 84.6%. We are also maintaining high levels of average room rate resulting in total UK revpar of £72, 4% behind last year and well ahead of pre-pandemic levels. We have seen an improvement in recent weeks with a good pick-up in bookings across October and into November. Our positive forward booked position, together with the continued deployment of our commercial initiatives, means that we remain confident in driving like-for-like sales in the second half. Having also accepted offers on 51 branded restaurants for a total consideration of £56m, we remain on course to realise expected proceeds from property-related transactions of between £175m and £225m in FY25. In Germany, we continued to deliver a strong performance through September, which is an events-led period, with total accommodation sales 26% ahead of last year. Revpar for the total estate in Germany was €79, 22% ahead of last year. Our cohort of more established hotels delivered a revpar of €87, 22% ahead of last year and significantly ahead of the market. We are continuing to build on the excellent progress we have made in the first half. With the increased maturity of our brand and estate, we have a strong forward booked position, and remain on track to breakeven on a run-rate basis this calendar year. Since the period end, we have completed two sale and leasebacks for a total consideration of £56m, representing an average yield of 4.1%. There are no changes to our previous FY25 guidance other than with increased cost efficiencies of £60m in FY25 (previously £40m-£50m), we now expect UK net inflation to be between 2% and 3% We are executing well and remain on course to deliver a step change in our profits, margins and returns as reflected in our five-year plan. Reflecting our increased confidence in the delivery of our plans over the period to FY30, we expect to increase adjusted profit before tax versus FY25 by at least £300m, and generate more than £2bn for dividends, share buy-backs and, if suitable opportunities arise, additional high-returning investments.” Whitbread also announced it is beginning a share buy-back programme of up to £100m. It comes as Whitbread reported UK food and beverage sales in the 26 weeks to 29 August 2024 were down 7% “in line with expectations” and “reflecting the changes made to a number of our branded restaurants as part of the accelerating growth plan, partially offset by stronger trading in our integrated restaurants as a result of sustained high levels of hotel occupancy”. The company reported total statutory revenue for the period was flat at £1.57bn “reflecting a slightly softer UK demand environment, investment in our accelerating growth plan and lower interest receivable, partially offset by positive momentum in Germany”. Adjusted profit before tax was down 13% to £340m compared with £391m the year before. Chief executive Dominic Paul said: “We are making excellent progress with our plans and over the next five years are set to deliver a step change in our performance which will fund significant returns to shareholders. Demonstrating our confidence, we have today announced details of our five-year Plan that sets out the scale of our ambition to FY30. In the UK, we have a clear pathway to further extend our market-leading position and capitalise on the favourable UK supply backdrop. We are determined to build on our significant outperformance since the pandemic and while the market has been slightly softer than last year, we remain on course to grow our UK returns substantially over the medium-term whilst continuing to deliver for our customers, as evidenced by our high guest scores. Our passion for operational excellence, together with our brand strength, scale and value proposition are sustaining our strong performance and revpar premium versus the rest of the UK mid-scale and economy sector. In Germany, we are really encouraged by our progress to date. Our trading performance and the progressive maturity of our estate mean we are set to reach breakeven on a run-rate basis later this year. Our longer-term plans to become the country’s number one hotel brand are also on track, as we move towards replicating our success in the UK market, delivering double digit returns on our current open portfolio by FY30. Having laid the foundations for future growth, we are executing at pace and remain confident in the outlook as reflected by our increased interim dividend and further share buy-back.”