Whitbread warns of £60m increase in costs due to inflation | Whitbread

The owner of Premier Inn and restaurant chains including Beefeater has reported a bounceback in profits to above pre-Covid levels but warned of a £60m increase in costs this year fuelled by soaring inflation.

Whitbread, which runs 800 Premier Inn hotels, also said it was increasing its target of number of rooms from 110,000 to 125,000 to take advantage of independent accommodation operators going bust in the UK and Ireland.

The company, which operates hotels in the UK, Ireland and Germany as well as chains including Bar & Block and Brewers Fayre, beat forecasters’ expectations, reporting pre-tax profits of £307.4m in the six months to 1 September.

This compares with a loss of £19m in the same period last year, and is 40% ahead of the same period 2019, before the pandemic struck.

Total revenues of £1.35bn were 25% above pre-Covid levels, although its food and beverage business remains 5% below 2019.

However, the company added that a combination of inflation in labour, utility bills such as energy and food and beverage costs – as well as increased investment in IT and marketing – would cause total costs to increase by £60m for the year to March.

“Despite macroeconomic uncertainties, our current trading performance is strong and our business has proven its resilience in previous downturns,” said Alison Brittain, the chief executive of Whitbread.

“With a robust balance sheet and significant growth potential in both the UK and Germany, we remain confident in the full year outlook and our ability to deliver long-term value for all our stakeholders.”