Phoenix House in Vauxhall [Photo from Whitbread plc]Construction work has begun to convert Phoenix House in Vauxhall, London into a 180-bedroom Premier Inn hotel – just eight months after parent company Whitbread agreed terms on a lease for the site.The high-profile location opposite Vauxhall underground station was acquired by Whitbread as part of its London expansion programme for Premier Inn.In an innovative arrangement, Whitbread agreed to lease the 10-storey 7,469 sqm former office building from Lambet ...

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Core Insights - The company has made excellent progress in the first half of 2026, as highlighted in the interim results presentation [1] - The Accelerating Growth Plan is a key strategic initiative aimed at transforming the business and is part of a broader 5-year plan [2] - The company has outperformed the market in the U.K. during the first half, benefiting from a strong guest proposition and ongoing commercial programs [2] - In Germany, the company is on track to achieve profitability by the end of the fiscal year 2026 [3]

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Core Viewpoint - Whitbread plc is making significant progress on its strategic initiatives aimed at delivering incremental profit and shareholder value by 2030 [4] Group 1: Financial Performance - The company is set to deliver at least GBP 300 million in incremental profit by the full year 2030 [4] - Whitbread aims to generate more than GBP 2 billion for shareholders through its strategic initiatives [4] Group 2: Market Position and Strategy - In the U.K., Whitbread is extending its market-leading position through network expansion and the Accelerating Growth Plan [4] - The ongoing program of commercial initiatives is enabling the company to perform ahead of the market [4]

Core Insights - Whitbread shares have declined by 20% over the past year, indicating significant weakness in the stock performance [1] Group 1: Company Performance - The stock has experienced a lackluster reaction from the market, contributing to its recent decline [1] Group 2: Investment Strategy - The focus is on identifying undervalued companies with strong fundamentals and growth potential, emphasizing robust cash flows, strong balance sheets, and competent management [1]

Core Insights - The article emphasizes the expertise of the company in analyzing restaurant stocks across various segments in the U.S. market, including QSR, fast casual, casual dining, fine dining, and family dining [1] Group 1: Company Overview - The company is led by a founder with a strong background in Business Administration and Accounting, holding an MBA in Forensic Accounting and Controllership [1] - The company utilizes advanced analytical models and specialized valuation techniques to provide detailed insights and actionable strategies for investors [1] Group 2: Industry Engagement - The company actively participates in academic and journalistic initiatives, contributing to institutions that promote individual and economic freedom [1] - Previous contributions include columns discussing monetary policy, financial education, and financial modeling, aimed at making these topics accessible to a broader audience [1]

Financial Data and Key Metrics Changes - In the first quarter, group total sales were 1% ahead of last year, driven by strong performance in the UK and Germany [10] - Total UK accommodation sales were up 55% compared to pre-pandemic levels, indicating a favorable supply backdrop [11] - The company maintains a healthy RevPAR premium of £5.62, outperforming the mid-scale and economy sector [19] Business Line Data and Key Metrics Changes - The UK business is expected to continue its market-leading position through a strong commercial program and an accelerated growth plan [18] - In Germany, total accommodation sales increased by 15% compared to last year, supported by the maturity of the estate and room growth [19] - The company is adding over 3,500 rooms to its UK estate, while also focusing on becoming the number one hotel brand in Germany [18] Market Data and Key Metrics Changes - The company is experiencing a combination of overs and unders in the UK market, with some uncertainty due to the election process [7] - Business demand remains resilient, with peak leisure demand also showing strength, although there is some softness in the soft peak leisure segment [35] - The company is confident in its ability to outperform competitors due to structural reasons in the market [29] Company Strategy and Development Direction - The company is focused on executing various strategic initiatives to drive business performance over the next few years [17] - There is a strong emphasis on cost efficiency and digital agility, with the largest ever cost efficiency program being implemented [18] - The company aims to leverage its upgraded technology stack to enhance operational performance and drive growth [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the full-year outlook, citing a positive forward booked position and strong commercial programs [12] - The company is optimistic about the levers available to drive performance, particularly in the German market, which is transitioning from a financial headwind to a tailwind [30] - Management noted that the upcoming events, such as the Euros and Taylor Swift concerts, are expected to provide a boost to performance [67] Other Important Information - The company has a pipeline of over 7,000 rooms, with a target of opening between 750 to 1,250 rooms this year [54] - The efficiency program is expected to yield significant improvements in the second half of the year compared to the first half [59] - The company is above the national living wage and has implemented a strong pay increase for its employees [75] Q&A Session Summary Question: How should the outlook be interpreted given the positive forward position? - Management feels encouraged and believes the quarter will likely strengthen, with various levers available to drive performance [23][24] Question: What are the expectations for RevPAR in the UK? - Management believes achieving the consensus of around 1% for the full year is feasible, supported by efficiency initiatives [27][28] Question: What conditions are needed for profitability in Germany by FY 2026? - Management refrained from speculating but emphasized the importance of RevPAR increases and refining the operating model [33][60] Question: How is the company managing booking processes for peak summer months? - The company is leveraging historical data to optimize pricing and booking strategies [66] Question: What impact will upcoming events have on Q2 performance? - Management anticipates material benefits from events like the Euros and Taylor Swift concerts, contributing positively to performance [67][68]

Financial Data and Key Metrics Changes - The company reported its highest level of profits and cash flow since focusing on the hotel group, with significant profit and margin increases compared to the previous year [5] - The UK business achieved a record return on capital of 15.5% [5] - The company declared an increased final dividend and a £150 million share buyback, bringing total cash returns to shareholders since April 2023 to over £1 billion [12] Business Line Data and Key Metrics Changes - The UK hotels outperformed the mid-scale and economy sector, driving strong revenue growth [5] - In Germany, the company added over 1,400 rooms and reduced losses, indicating improved trading performance [6] - The UK plans to grow its room pipeline by 50% over the next five years, increasing the total to over 97,000 rooms [7] Market Data and Key Metrics Changes - The UK market showed slight softness in early FY 2025, but the company continued to outperform the market, with a forward booked position ahead of the previous year [9] - In Germany, the company is on track to break even on a run rate basis this year, with a target return on capital of 10% to 14% [10] Company Strategy and Development Direction - The company is optimizing its food and beverage offerings to replace loss-making restaurants with higher-returning hotel rooms, aiming to increase market share and profitability [8] - The company launched its largest cost efficiency program to drive savings and support margin growth [11] - The accelerating growth plan is designed to take advantage of the structural decline in hotel supply in the UK [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to outperform the market due to strong brand health and value-for-money scores [18] - The company noted that while the first few weeks of FY 2025 were softer, the overall demand is expected to strengthen as the year progresses [47] - Management highlighted that the reduction in hotel supply will provide a strong underpin for the hotel market over the next few years [46] Other Important Information - The company is focused on building brand awareness in Germany and refining trading strategies to enhance performance [10] - The management emphasized the importance of maintaining a strong balance sheet and capital allocation framework to support growth and shareholder returns [23] Q&A Session Summary Question: RevPAR performance and confidence in future outperformance - Management reiterated confidence in driving returns up over the next few years through announced plans and commercial levers [16][18] Question: Cash returns and share buyback strategy - The company explained that the £150 million share buyback aligns with its capital allocation framework and will be reassessed at half-year results [20][24] Question: Profitability of retained pub restaurants - Management indicated that the retained restaurants are generally larger and perform better than those being sold, ensuring a better guest experience [33] Question: Room growth in Germany and pipeline concerns - Management acknowledged slower room openings but emphasized a strong pipeline and focus on driving increased returns rather than chasing growth for its own sake [36][37] Question: UK openings and market conditions - The company noted that the current pipeline is lower due to COVID-related delays but expects to profitably extend market share as competitors struggle to grow [41][42] Question: Cost efficiencies and inflation impact - Management outlined a £150 million efficiency program aimed at offsetting inflation and potentially achieving low net inflation in the coming years [87][88] Question: Leverage and capital allocation - Management confirmed a leverage ceiling of 3.5 times EBITDA, emphasizing the importance of maintaining investment-grade status while allowing for growth opportunities [70][73]

WHITBREAD PLC on our advantage Premier Inn 5 FY24 RESULTS 30 APRIL 2024 This document has been marked as Non-Confidential CONTENTS | --- | --- | --- | --- | --- | --- | |------------------------------|-------|-------|-------|-------|----------------| | | | | | | | | | | | | | | | HIGHLIGHTS | | | | | MARYLEBONE HUB | | | | | | | | | FINANCIAL REVIEW | | | | | | | STRATEGY UPDATE | | | | | | | CAPITAL ALLOCATION & OUTLOOK | | | | | | | CONCLUSION | | | | | | WHITBREAD 2 n in the same Premier Inn ** Rest easy ...