Whitbread ups dividend, extends buyback despite flat sales

(Sharecast News) - Premier Inn owner Whitbread on Wednesday lifted its half-year dividend and said it would buy back an additional £100m in shares, despite a fall in earnings. The company held annual guidance as pre-tax profit for the six months to August 29 fell 22% to £309m on flat revenue of £1.5bn. The dividend was increased 7% to 36.4p.

Whitbread said the result reflected a weaker UK economic environment and investment in its five-year accelerated growth programme (AGP), offset by positive momentum in Germany which is becoming a key market for the group.

Sales of Premier Inn hotel rooms in the UK rose 1%, while food and beverage sales were down 7%. This was partially offset by a 22% rise in accommodation sales in Germany.

"We have seen an improving trend across the current trading period, after a soft start to September, with the result that total UK accommodation sales for the first six weeks were down 1% versus last year," the company said.

It added that bookings across October and November had picked up and was "confident in driving like-for-like sales in the second half".

Reporting by Frank Prenesti for Sharecast.com