(Alliance News) - Whitbread PLC shares jumped on Tuesday, after it delivered a strong set of results amid recovering demand and announced a GBP300 million share buyback programme.
In London, Whitbread was the top blue-chip stock in early morning trade, up 4.9% to 3,278.60 pence each.
In the financial year that ended March 2, the Premier Inn-owner posted a pretax profit of GBP374.9 million, multiplied from GBP58.2 million the year before. Whitbread said this was above pre-pandemic levels, driven primarily by its Premier Inn UK division, which saw total sales growth of 22%.
Revenue surged 54% to GBP2.63 billion from GBP1.70 billion.
On the back of these results, Whitbread declared a final dividend of 49.8p per share, up 44% from 34.7p a year earlier. This brings the full-year dividend to 74.2p. Its final dividend in the prior financial year was its sole payout, reinstated after the Covid-19 pandemic.
Looking ahead, Whitbread said that it remains confident in its full year outlook for financial 2024, despite ongoing economic uncertainty.
In the UK, the company currently has a pipeline of 7,400 rooms, and it expects to open 1,500 to 2,000 rooms in financial 2024. In Germany, where it has 7,000 rooms, it expects to open 1,000 to 1,500 room. Whitbread expects total capital expenditure of GBP400 million to GBP450 million.
Chief Executive Officer Dominic Paul said: "These are a fantastic set of results. Whilst the recovery in market demand in conjunction with a structural decline in the independent sector has provided a helpful backdrop, it is the combination of our own initiatives and our clearly differentiated business model that has sustained our brand strength and delivered such an impressive operational and financial performance."
Moving away from results, Whitbread announced a share buyback programme of up to GBP300 million. The purpose of the buyback is to reduce the capital of Whitbread by returning surplus capital to shareholders.
The company said that the share buyback, which will be complete in the first half of financial year 2024, reflects its confidence in its outlook.
The share buyback programme will take place in two tranches of GBP150 million each, Whitbread explained.
The maximum number of shares that can be purchased under the programme is 20.2 million shares.
By Sophie Rose, Alliance News reporter
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