Costa owner saw 8% rise in revenues and 2% rise in EPS
Companies: Whitbread PLC
Whitbread (LSE: WTB) announced a reasonable set of Interims this morning slightly ahead of analyst expectations, but also delivered negative LFLs in London, highlighting how competitive the market is in the capital.
It reported an 8% rise year-on-year in revenues to £1.556m but a smaller boost to the bottom line as Basic EPS rose 2.2% to 111p. The main driver of this appears to be £43m of exceptionals following Premier Inn's pull-back from some international markets.
Dividends have increased 4.9% vs H1 2015 to 29.9p per share and are well covered with EPS being 3.7x the payout.
Looking at the Hotel RevPAR performance, Premier Inn's was flat on a LFL basis with sales up 2.7% vs total sales up 9.6%. London RevPAR was disappointingly down 7.4% and regional RevPAR was modestly up. Restaurants LFL sales were more or less flat (+0.5%).
Panmure flagged in a note published this morning that the growth is being driven less by RevPAR and more by room extensions in Hotels:
"put out a LFL sales of 2.0% was an improvement from 1.8% in Q1 but is increasingly being driven by room extensions rather than RevPAR or Costa LFL - hence is likely to be a drag on returns"
Costa total sales grew 10.7% primarily as a result of store growth of 124 net year-on-year. On a LFL basis, UK sales grew 2.3%.
Shares are down 2.5% today as the market focussed on the cautious outlook statement rather than the more-or-less-inline results. Over the last 12 months the shares have fallen 25%. Based on current consensus forecasts the shares are trading on a forward PE ratio of 15x 2016 earnings, and offer investors a 6.5% earnings yield on that basis.
