Downturn in Whitbread due to high-street slump |
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Fri, 29 Apr 2005 23:00
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Pubs and hotels group Whitbread’s financial performance for the year to March 3 may well reflect the current condition of the nation’s economy. The group yesterday posted a 17.8 percent rise in profits, but warned of tough trading conditions ahead as consumer spending had slowed down considerably.
Like-for-like sales (current sales achieved through activities when compared to the activities of the previous year) growth across the group’s businesses slowed down in the new year. The slackening was more apparent at its pub-restaurants and David Lloyd Leisure clubs.
| Meanwhile, rival Travelodge, the budget hotels chain, was fast catching up and had opened 800 rooms between January and March this year. They plan to add another 2,500 rooms taking their total to 17,500 rooms by the end of 2005. In contrast, Whitbread-owned Premier Travel Inn appeared to be lagging behind although it is seen as the leader in the business. Travelodge's comparative sales for the months January – March rose between 4% and 5% despite the slowdown in consumer spending which has affected the leisure business. However, the budget hotels sector appeared positive.
Whitbread’s pre-tax profits for the year to 3 March, meanwhile, shows an increase of 17.8% from last year’s £211.7m to current £249.4 m. Its Costa Coffee and TGI Friday chains also did reasonably well. Its health club business marked a 2.3% decline reflecting increased competition and dropping consumer confidence.
But the disappointing health club figures did not hurt total group sales which continued to grow because of a comfortable performance from the Premier Travel Inn chain, lifting sales from £230m to £323m and boosting operating profits by 47 per cent to £109m. The Premier Travel Inn was earlier known as Premier Lodge bought over by the group for £500m and merged with Travel Inn.
The group’s new addition, the newly integrated Premier Lodge Hotels also performed well. Travelodge's online site also contributed with 49% of room reservations.
Operating profits at Whitbread’s Beefeater and Brewsters chains fell by 7.3%.
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