- Hotels have been badly hit by virus-induced travel bans
- Whitbread plans to up its capital investment this year
Courtesy of ‘stay at home’ mandates, closed borders and grounded flights, the hotel industry has been among the worst affected by Covid-19.
The havoc wreaked by the pandemic was hammered home by Whitbread’s (WTB) full-year numbers. Revenues fell almost three-quarters, sending the FTSE 250 group deep into the red with operating losses of £831m, down from profits of £411m.
Yet despite that blow, management expects better things to come. Whitbread plans to invest more than £350m of capital this year, funding a major marketing campaign for the Premier Inn hotel chain and opening 2-3,000 rooms in the UK alone.
Many will argue that it is simply too soon to gauge how Westminster’s lockdown exit strategy will pan out, amid rising cases overseas and fears about virus variants. However, more than nine-tenths of Whitbread’s UK hotels have already opened and the group anticipates significant demand for ‘staycations’ this summer.
Analysts surveyed by Factset expect pre-tax losses to narrow to £104m for FY2022. We remain bullish in the long-term.
Last IC view: Buy, 3,160p, 30 Dec 2020
| WHITBREAD (WTB) | ||||
| ORD PRICE: | 3,267p | MARKET VALUE: | £ 6.60bn | |
| TOUCH: | 3,268-3,270p | 12-MONTH HIGH: | 3,709p | LOW: 1,997p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 1,898p | NET DEBT: | 85% | |
| Year to 25 Feb | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 3.11 | 0.52 | 231 | 95.8 |
| 2018 | 2.01 | 0.43 | 188 | 101.2 |
| 2019 | 2.05 | 0.22 | 96.7 | 99.7 |
| 2020 | 2.07 | 0.28 | 125 | 32.7 |
| 2021 | 0.59 | -1.01 | -482 | nil |
| % change | -72 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
