Whitbread reports plans to optimise F&B offer ‘on track’ with 38 branded restaurants sold for £38m, full-year revenue down in ‘softer’ hotel market: Whitbread has reported its plan to optimise its food and beverage offer is “on track” and has now sold 38 of its branded restaurants for £38m. Last April, the Premier Inn owner set out plans to exit 126 of its lower-returning branded restaurants and unlock 3,500 new rooms. As part of the plan, 112 lower-returning branded restaurants were to be converted into new hotel rooms “having first transferred the delivery of food and beverage to an integrated restaurant”. Updating on progress, the company stated: “Our plan to optimise our food and beverage offer at a number of sites and unlock 3,500 new extension rooms is on track. Planning applications for more than 70% of affected sites have been submitted and permission for circa 50% of sites has already been approved. Construction has started at several sites and the first of our 3,500 new extension rooms will open later this year. We are exiting more than 100 branded restaurants and having sold 38 sites for £38m, we also remain confident of exiting the remaining sites over the next 12 months as planned. Having impacted profitability in FY25, we expect this to fully reverse in FY26, in line with our previous guidance. Our operational and strategic progress in FY25 mean we are positive about the medium-term outlook and the delivery of our five-year plan. While we have limited visibility of short-term market demand and inflation, our vertically integrated model means we have significant self-help levers that can provide positive like-for-like sales momentum while also reducing our costs. By focusing on what we can control, together with strong growth potential in both the UK and in Germany, we remain confident in generating at least £300m incremental adjusted profit before tax by FY30, releasing more than £2bn available for share buy-backs and dividends.” In the new financial year, Whitbread said it expects to open between 1,000 and 1,200 new hotel rooms in the UK, the majority of which will open in the second half of the year; and 500 to 700 of these new rooms are extension rooms through the five-year plan. The company also announced the launch of a new £250m share buy-back scheme. It comes as Whitbread reported its UK food and beverage sales in the seven weeks to 17 April 2025 were 16% behind last year, “reflecting the removal of a number of lower-returning branded restaurants, in line with our expectations”. Total UK accommodation sales were 1% behind the previous year, “but two percentage points ahead of the wider mid-scale and economy market”. The company stated: “Our forward booked position is ahead of last year, supported by strong peak leisure demand. Although the UK macroeconomic outlook remains uncertain, with the introduction of further commercial initiatives, we remain confident in continuing to outperform the market. In Germany, our strong performance has continued into the current trading period, with total accommodation sales up 23% in local currency versus last year.” Whitbread reported UK food and beverage sales in the 52 weeks to 27 February 2025 fell 11% “due to the impact of the five-year plan, partially mitigated by strong breakfast sales”, and was “in line with our expectations”. The company reported total statutory revenue for the year was down 1% to £2.92bn compared with £2.96bn the previous year. Adjusted profit before tax was down 14% to £483m compared with a record £561m the year before. The company stated: “While the expected impact of the five-year plan and softer market demand in the UK made for a more challenging trading backdrop, Premier Inn UK outperformed the midscale and economy market and delivered a robust financial performance.” Chief executive Dominic Paul said: “Having laid the foundations for significant growth, we are executing at pace and making excellent progress on our strategic initiatives, against what has been a softer market backdrop over the past year. By focusing on what we can control, our five-year plan is on track to deliver a step-change in our profits, margins and returns and we remain positive about the medium-term outlook. As we open our growing committed pipeline, we will reach at least 98,000 open rooms in the UK and Ireland by FY30. At the same time, our commercial strategy is driving our outperformance versus the market and we are continuing to realise material cost savings across all areas of our business without compromising our reputation for both quality and value. With a more favourable outlook in the property investment market, we will look to recycle at least £1bn of our more mature property assets to fund future growth and drive higher financial returns. Given our confidence in our five-year plan, together with the strength of our balance sheet, we are recommending a final dividend of 60.6p per share and are accelerating the planned delivery of shareholder returns with a £250m share buy-back to be completed over the next 12 months.”