Investors were left disappointed on Thursday as hotels giant Premier Inn’s owner Whitbread warned profits will be flat next year amid market “uncertainty”.
The FTSE 100 firm expects underlying pre-tax profits in the year to February 2020 to “be consistent with” the £444 million analysts have pencilled in for the current financial year, which ends next month.
Shares in Whitbread fell 85p, or 1.8%, to 4688p. In early trading the shares dropped almost 5%.
Whitbread, which this month completed a £3.9 billion sale of its Costa Coffee arm to Coca-Cola, revealed the outlook as it updated on its remaining Premier Inn business.
Chief executive Alison Brittain said total sales rose 2.5% in the third quarter to November 28, but comparable sales were down 0.6%.
Brittain told the Evening Standard the London hotels market is “buoyant”, helped by tourism. But she said in the regions there was “much more caution... people are reining in spending, both on the business and leisure sides”.
She added: “We are cautious about the macro-environment for the next financial year due to increased uncertainty and continuing high inflation.”
It will continue to invest in expansion, with up to 4000 more rooms in the UK. However, in Britain it predicts weaker revenue per room growth in the regions.
Shore Capital analyst Greg Johnson said: “Given the expansion into its hotel estate, investors would have hoped for some modest growth in profits next year.”
Whitbread, which today began a £500 million share buyback programme to hand back funds to shareholders following the sale of Costa, has over 800 hotels in the UK, Germany and Middle East.
On Brexit, Brittain said: “I think it is urgent to a get a [government] consensus view to get some certainty. Ambiguity is the worst option.”