Whitbread shares rise as long-term outlook and cost-saving measures offset misses
Investing.com -- Shares of Whitbread plc (LON:WTB ) surged following the release of its first-half 2025 results.
At 5:10 am (0910 GMT), Whitbread was trading 5% higher at £3,228.
Whitbread reported total sales of £1.57 billion for the first half of 2025, slightly below the consensus estimate of £1.579 billion and in line with UBS projections of £1.568 billion.
This minor revenue miss was viewed in a broader context, as the slight shortfall did not significantly alter the market's view of the company’s overall trajectory.
Similarly, profit before tax was reported at £340 million, which was again just below the market consensus of £347 million.
Although both figures fell short of expectations, they were seen as relatively minor misses in the context of ongoing operational performance and future potential.
Whitbread’s net income came in at £220 million, noticeably below the consensus of £256 million.
The dip was due to adjusting items totaling £31 million, which included impairment charges on properties in Germany and costs associated with new hotel systems.
This weighed on the bottom line, but the company’s longer-term strategy, especially its expansion in Germany and efficiency measures, helped mitigate immediate concerns among investors.
Whitbread declared an interim dividend of 36.4p per share, a touch lower than the expected 39p.
The decision to extend the company’s £100 million share buyback program and its longer-term commitment to shareholder returns provided a cushion to what could have otherwise been a negative reaction to the dividend miss.
Performance across the company's segments offered further insight. UK accommodation sales in the second quarter were down by 1.6% on a like-for-like basis, slightly underperforming the consensus expectation of a 1% decline.
Food and beverage sales also lagged, with a 4.9% decline, slightly worse than the anticipated 4% drop.
However, Whitbread's UK Premier Inn business remained solid, and the company continued its aggressive expansion in Germany, where it managed to reduce losses from £14 million to £9 million.
One of the key drivers of positive sentiment was Whitbread’s long-term outlook. The company expects improvements in profitability over the next several years, projecting that its adjusted profit before tax in 2030 will increase by at least £300 million from its 2025 level.
Additionally, Whitbread has set ambitious goals for its German operations, targeting £70 million in PBT by fiscal year 2030 along with a substantial increase in room capacity to 20,000 rooms.
Whitbread said it had raised its forecast for cost efficiencies to £60 million for fiscal 2025, up from the previous estimate of £45 million.
This increase in savings helped offset concerns about rising costs and net debt, which stood at £4.5 billion by the end of the period.
The sale of 51 restaurants, nearly double the number initially announced, also provided reassurance about the company's ability to streamline operations and generate additional capital.
Whitbread expects to raise between £175 million and £225 million from the disposal of these assets by the end of fiscal 2025.
Source: Investing.com