Whitbread brings back dividend as it returns to profitability

Whitbread PLC has reported it has returned to profitability in the 53-week period ended 3 March 2022 (FY22) as it hailed pre-tax profits of £58.2m, compared to a loss of £1bn in FY21. As a result, Whitbread is reinstating dividend payments with the board declaring a final dividend per share of 34.7p, resulting in a total dividend payment of £70m. Whitbread said this reflects both the group's “encouraging” trading, and confidence in its outlook post-Covid. It also comes as FY22 statutory revenues increased 189% year-on-year from £589.4m to £1.7bn, due to “strong” recovery in sales post-Covid restrictions, along with the estate growth in the UK and Germany. Overall, Whitbread’s UK food and beverage sales increased 170.2% from FY21, although this is down 30.9% from pre-Covid levels (FY20) due to lockdown closures. Meanwhile, Premier Inn’s UK food and beverage sales were up 163.4% year-on-year, but 32.7% behind FY20. Whitbread said this reflects restaurant closures from the start of the year until 12 April, when outdoor service only was permitted in England. The estate was largely reopened on 17 May, with total food and beverage sales improving to 13.3% behind FY20 levels in the second half of the year. Whitbread said the overall value pub and restaurant sector's recovery has been slower than other restaurant sectors, and greater impacted in Q4 by the impact of the Omicron variant. However, Premier Inn’s UK food and beverage sales improved to be “well ahead” of FY22 and 4.6% behind FY20 levels in the seven weeks to 21 April 2022. The group said that new menus, “enhanced” drinks offering, and improved digital marketing will help drive an improvement in food and beverage sales in the year. Additionally, the group said it expects to offset higher levels of inflation through cost efficiencies, estate growth and pricing power. Alison Brittain, Whitbread CEO, said: “The value pub and restaurant sector in which we operate has seen a slower recovery post reopening in May 2021. We are seeing an improvement in our UK restaurants performance, and we are confident the commercial initiatives we have recently launched will help drive a further improvement in sales. “During the year we set further stretching targets, including accelerating our net zero Carbon target to be achieved by 2040, and setting eight clear diversity and inclusion commitments, including a target of 40% female representation in our senior leadership roles, which we have already surpassed.”