Premier Inn owner aims to return £2bn to shareholders

The owner of Premier Inn has said that it aims to return more than £2 billion to shareholders over the coming five years and increase profits by at least £300 million as it reported a fall in first-half profits amid softening demand in the UK.
As part of the plan, Whitbread wants to increase room numbers to 98,000 in the UK and to 20,000 in Germany. It currently has nearly 86,000 rooms in the UK and 10,500 in Germany.
Its plan includes selling 126 restaurants — of which it has accepted offers on 51 — and converting 112 restaurants into 3,500 bedrooms. It said planning applications had already been submitted for a third of those rooms.
The FTSE 100 leisure company said that the restructuring, which will cost £500 million over four years, was “on track”.
Whitbread reaffirmed its full-year guidance, despite reporting flat revenues of £1.57 billion for the six months to August 29 and a 22 per cent decline in pre-tax profits to £309 million.
As the company expected, the group’s food and drink sales fell 7 per cent, reflecting the impact of a significant restructuring of its restaurants. Revenues at its German hotels rose 21 per cent as a result of the “progressive maturity” of its estate.
Whitbread said it had seen a “good pick-up in bookings” in October and November, giving bosses confidence that it would drive like-for-like sales in the second half. The company plans to pay an interim dividend of 36.4p per share and will launch a further £100 million buyback of shares.
Dominic Paul, who replaced Alison Brittain as chief executive last year, 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. In the UK, we have a clear pathway to further extend our market-leading position and capitalise on the favourable UK supply backdrop.”
Whitbread was founded by Samuel Whitbread as a brewery in 1742 but it sold the beer business in 1999. Today it has more than 855 hotels and employs 38,000 people. At the beginning of 2019 it sold its Costa Coffee chain to Coca-Cola for £3.9 billion and expanded into Germany.
The shares rose 111p, or 3.6 per cent, to £31.83p.