Derren Nathan, head of equity research at Hargreaves Lansdown, said: “Whitbread’s shares have been trading strongly ahead of results, after the company’s five-year plan was leaked to the press earlier this week.
“Confirmation of that plan, a respectable increase in last year’s operational performance, and an encouraging start to the new financial year has been offset by a higher inflation steer and anaemic guidance for profitability in Germany.
“Premier Inn continues to outperform the competition, and a focus on efficiency helped to offset significant cost challenges.
“So far, events in the Middle East haven’t translated into a fall in demand for Whitbread’s hotel rooms, with the 1.9 per cent growth in UK accommodation sales so far this year split relatively evenly between new rooms and organic growth.
“The refreshed strategy builds on recent success, which has seen the group pull back on standalone dining outlets and lean into the integration of its restaurants into Premier Inn, which provides a captive audience of diners.
“Plans to reduce capex and release capital from the real estate portfolio, along with a £250million increase in planned cost savings, underpin targets to distribute £2billion of free cash flow to investors by 2031.
“However, there’s a lot to deliver here, and the board hasn’t got ahead of itself with no new buyback announced today and the final dividend held flat at 60.6p per share.”
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