Premier Inn’s owner has announced plans to convert underperforming restaurants into hotel rooms. This will result in the loss of approximately 1,500 jobs.
Whitbread, the company that runs pub-restaurants such as the Beefeater and Brewers Fayre, will convert 112 of its lower-returning properties into new hotel rooms. It will also sell 126 other sites, creating 3,500 additional rooms in the next five-year period.
The FTSE 100 firm has already agreed to the sale of 21 of these restaurants at £28 million.
Dominic Paul (52), who succeeded Alison Brittain last year as chief executive, said that “our freehold-backed balanced sheet, along with our strategy to continue to invest, allows us to take full advantage of the structural growth opportunity which exists after the decline in UK Hotel Supply.”
He stated that the short-term effect on the profit performance of this year will be “more than off set by the increase in the 2027 financial years, with further increases afterwards both in margins and returns. As we open more new extensions.”
Whitbread, founded in 1742 by Samual Whitbread, was originally a brewery. It sold its beer business to AB InBev in 1999. The group currently has 840 hotels in Britain with 83.500 rooms and 10,000 in Germany.
The growth plan, announced along with the annual results, showed that profits rose by 21% to £452m on £2,96bn in revenue, due to growth in Britain, and progress in Germany. Whitbread has announced a £115million final dividend. This is a 26 percent increase on the previous year, bringing it to 62.9p per share. It plans to purchase shares worth £150million.
The company reported that total sales were slightly lower in the seven weeks leading up to April 18. This was largely due to public holidays. It anticipates “a positive increase in demand for business and leisure travel over the next couple of weeks, supported by our revenue booked ahead”.
In afternoon trading, shares of the company rose by 122p or 4 percent to £31.69.