Underlying profits at budget hotels and coffee shop company Whitbread (WTB) rose 10.6 per cent year on year to £193.4m, although it's not clear whether that performance can be maintained - management implies it's unlikely. The consumer market is "broadly flat" and management expects "like-for-like sales growth to be more moderate".
The outlook is toughest for the restaurants and Premier Inn hotels businesses, which generates 83 per cent of profits. Premier Inn substantially outperformed the market in the first half, raising revenue per available room (RevPAR) by 2.4 per cent, compared with a 3.6 per cent fall for the midscale and economy hotel sector. However, competition is growing and the London market is cooling after the Olympics - Whitbread estimates that accounted for 70 basis points of the first-half RevPAR rise.
Costa continues to grow strongly and boosted underlying profits by 30 per cent to £36.1m. Net debt was broadly flat, despite significant investment during the six months in 141 coffee shops and 1,591 new hotel rooms. Full-year opening targets are for 350 shops and 4,500 rooms.
Broker Numis Securities forecasts full-year pre-tax profit of £349m, giving EPS of 144.6p (from £320.1m and 134.1p for 2012).
| WHITBREAD (WTB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,280p | MARKET VALUE: | £4.1bn | |
| TOUCH: | 2,278-2,280p | 12-MONTH HIGH: | 2,407p | LOW: 1,465p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 751p | NET DEBT: | 39% | |
| Half-year to 30 Aug | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 0.89 | 189 | 90.8 | 17.5 |
| 2012 | 1.02 | 192 | 98.2 | 19.5 |
| % change | +14 | +2 | +8 | +11 |
Ex-div: 7 Nov Payment: 10 Jan | ||||
