Proactive Investors - Whitbread PLC (LON:WTB) shares booked in with some gains as the Premier Inn owner boosted its dividend 40% and launched a new £300 million share buyback after strong demand lifted half-year revenue and profits.
The FTSE 100-listed group also expressed confidence in its hopes for 2024 and beyond, saying UK hotel demand is strong but that supply is not now expected to return to pre-pandemic levels for at least five years.
Interim results for the six months to 31 August showed revenue rose 17% to £1.57 billion, while adjusted pre-tax profit jumped 44% to £391 million.
Adjusted basic EPS rose 37% to 146.1p from 107.0p and the interim dividend was increased by 40% to 34.1p from 24.4p.
Premier Inn UK saw total UK accommodation sales 15% ahead of last year and 55% above the first half of 2020, with strong revenue per available room growth in both London and the regions.
Whitbread said it is seeking opportunities to grow its pipeline towards a long-term potential of 125,000 rooms across the UK and Ireland.
UK adjusted pre-tax margins increased to 27.5% from 24.4% and UK return on capital employed improved to 14.9% from 11.0%, well ahead of pre-pandemic levels.
In Germany, the company said it continues to make good progress, reconfirming previous guidance for the year.
Trading in the second half appeared strong, with the six weeks to 12 October seeing total UK accommodation sales growing 13%.
Whitbread increased its capex guidance for the current financial year to £500-£550 million from £400-£450 million before but left other guidance unchanged, including that it expects an adjusted loss before tax of £30-40 million.
“We remain optimistic about the outlook; leisure and business demand remains strong as evidenced by our forward booked position; favourable supply dynamics are set to continue for some time with the continued decline of independent hotels and constrained UK room supply growth,” Whitbread said.
The shares rose 3.9% to 3,452p by mid-morning on Wednesday.