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Thu 21st May 2020 - Whitbread launches £1bn rights issue, assuming UK hotels closed or at low occupancy until September
Whitbread launches £1bn rights issue, assuming UK hotels closed or at low occupancy until September: Whitbread has launched a rights issue to raise £1bn. The company said its UK hotels are ready to open when the government advises – internal scenarios include the assumption that hotels are closed, or at low levels of occupancy, until September 2020. Its German hotels re-opened 11 May 2020. The company said it has revised operational protocols that have been tested and working in 39 open hotels. The company stated: “Our operating model ensures strict social distancing, significantly enhanced hygiene standards and specific staff training can be rigorously and consistently enforced across the estate.” It said that 27,000 furloughed staff remain on full pay. Whitbread chief executive Alison Brittain said: “Whitbread delivered a resilient financial performance in FY20 in line with expectations, against a backdrop of low UK business and consumer confidence which particularly impacted the regional hotel market. The commercial initiatives we implemented during H1 helped drive a particularly strong end to the year, when we were trading ahead of the market and achieving very strong guest scores. In Germany, we completed the acquisition of the Foremost Hotels on 28 February 2020, growing the number of open and pipeline hotels to 52. However, the period after the year-end has been dominated by the impact of the rapidly evolving covid-19 pandemic. In response, the business took rapid and decisive action to protect our teams and our guests, and to secure our business to ensure that we will be in the best possible position to rebound strongly. We are pleased to have been able to help in the national effort, by keeping 39 hotels open that are located near hospitals for use by NHS staff and other front-line key workers. We transferred our vehicle delivery capacity to supermarkets to help their supply chains, and also donated over 158 tonnes of food to charities, producing over 335,000 meals for those in need. I would like to take this opportunity to thank all our employees for their hard work over the last year, and the resilience they have shown in the face of the current very challenging situation. I am extremely proud of, and grateful to, all our teams and in particular those colleagues who have volunteered to work in our open hotels. Having taken every step we could to ensure that we have the financial capability to withstand the initial period of lockdown, our focus has turned to re-opening and positioning ourselves for a successful recovery. The hotels that we have re-opened in Germany and the UK have given us a head start in implementing new and comprehensive safety, health and hygiene protocols that will give our teams and guests the re-assurance that we can continue to deliver the very high quality standards that they expect from Premier Inn. Despite the challenges the industry faces, Whitbread’s strategy to drive long-term value has not changed and remains compelling. We have a significant opportunity to continue to build out our pipeline in the UK, along with optimising our large network of hotels by investing in upgraded formats such as our Premier Plus rooms, which are proving very popular with both our business and leisure guests. Germany offers an enormous opportunity for structural growth, with a large domestic market and a fragmented and declining independent sector. As a result of the current crisis, we expect there to be an impact on the competitive landscape and to see a material slowdown in the supply of rooms in both our key markets, and potentially an acceleration in the decline of the large independent sector. Our ownership and operating model underpins a winning customer proposition, that we believe will thrive as customers return to travelling domestically and continue to seek value and to rely on their most trusted brands. Our strong balance sheet has for many years been a source of competitive advantage and has underpinned our long-term success. To enable us to continue to invest with confidence in the compelling structural growth opportunities that we see in the UK and Germany, we are raising £1bn through a fully underwritten rights issue. Optimising the balance sheet in this way will enable the business to be in the best possible position to continue investing and taking market share in our fragmented sector when the current situation normalises. Whitbread is a strong and much-loved business that has successfully navigated numerous turbulent periods during its proud 278-year history. The combination of the strengths of our people, business model and our brands, alongside a strong balance sheet and the decisive action that we have taken, means that when the covid-19 situation passes, we will be in a position of strength to continue to increase market share, support our colleagues and guests and create further significant value for shareholders.”

Welcome Break to re-open 72 major food and beverage brands: Welcome Break is to reopen 72 Starbucks (cafe and drive thru), KFC and / or Burger King units across its 26 motorway service areas by 4 June as the UK starts to return to work. 32 F&B units across 18 MSAs have already reopened and by 4 June an additional 40 F&B units across all 26 MSAs will have reopened. This is in addition to all 39 forecourts and 36 retail stores which have remained open throughout the lockdown. The company stated: “As an essential service for the nation’s motorists we remained open throughout the lockdown with a limited offer to support those who needed to stay on the road and required a safe place to rest and refuel. This latest move means that by 4 June motorists will be able to access some of their favourite hot food brands and Starbucks across our Welcome Break motorway service areas. This move follows much planning and preparation with our brand partners as well as closely following strict government and Public Health England guidelines to ensure the safety of all. As we begin to reopen these brands, the health and safety of our customers and team members remains our highest priority. As such, we have made a number of important changes. We have reconfigured our layout to enable customers to navigate around the building and adhere to social distancing guidelines; whilst further stepping up our hygiene and cleaning processes.” John Diviney, chief executive at Welcome Break, added: “As the lockdown slowly eases and people around the UK gradually return to work we are delighted to be opening up these great brands. It will provide a much-needed boost to those on the road and to support Britain working again. We very much look forward to welcoming back our returning customers. The health and safety of our colleagues and customers remains our absolute priority and we will continue to be guided by advice from Public Health England at all times.”

BrewDog loses Trump association libel claim: BrewDog has had a libel claim brought against a PR company over an offer of free beer to supporters of Donald Trump thrown out by the High Court. The company sued Frank Public Relations for defamation over a September 2018 press release announcing a deal with US brewery Scofflaw to launch its products in the UK. BrewDog arranged a number of promotional events in September and October 2018 as part of the launch, which was announced by a press release issued by Frank PR – without BrewDog or Scofflaw’s approval. The press release said “redneck US brewers Scofflaw” had partnered with “badass beer brand BrewDog to launch in the UK”, adding: “The self-confessed ‘trailer trash’ brewers are renowned in the states for their lawless attitude and have landed in London today – their aim? To get the UK ‘beered up redneck-style’, completely free of charge. But there is a hook… you have to be a Trump supporter.” BrewDog, which says it is known as being critical of the US president, claimed the press release “prompted criticism of BrewDog for associating with Donald Trump”. It argued people could take the meaning of the press release to be that BrewDog is “a supporter of the policies of Donald Trump and/or right-wing politics and/or politics of intolerance and prejudice”, and that the brewer is therefore “a hypocrite”. Lawyers for Frank PR said the “overall tone of the press release was light-hearted and played on Scofflaw’s redneck image”, and that “recipients of the press release would recognise the offer of free beer for Trump supporters for what it was: a publicity gimmick”. The judge stated: “Simply to say of someone that they were a supporter of Donald Trump (or his policies) would not arguably lower that person in the eyes of right-thinking people generally.”

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