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Premier Inn owner Whitbread resumes dividend as UK recovery builds

Premier Inn owner Whitbread resumes dividend as UK recovery builds
Premier Inn owner Whitbread resumes dividend as UK recovery builds Copyright Thomson Reuters 2022
Copyright Thomson Reuters 2022
By Reuters
Published on Updated
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By Radhika Anilkumar

-Premier Inn owner Whitbread resumed dividends on Thursday and said profit at its UK business could return to pre-pandemic levels this year despite inflationary pressures.

Shares in the company were up 3.4% at 1140 GMT as Britain's largest hotel chain also reported annual revenue that beat market expectations after UK accommodation sales surpassed pre-pandemic levels during the summer and autumn seasons last year.

"As we move through the year in the UK, we expect international inbound demand to increase, alongside recovering office-based corporate demand, complementing the already high levels of leisure and business trade demand," Whitbread said in a statement.

The London-listed company, which started out as a brewery in the eighteenth century, said UK accommodation sales for the year ended March 3 had nearly trebled from the previous year when pandemic restrictions were still in place.

Whitbread, which also owns steakhouses Beefeater and Bar+Block, said annual statutory profit before tax was 58.2 million pounds ($72.8 million), versus a loss of 1.01 billion pounds a year earlier.

It proposed a final dividend of 34.7 pence per share, its first since suspending payments in 2020.

"With (the dividend) back on the table, it sends a clear message to markets that sentiment is vastly improved and the return to profitability ... adds weight," Hargreaves Lansdown analyst Matt Britzman said.

"The recovery is by no means complete and there's still a way to go before the group's out of the woods," he added.

Whitbread said its German business had been recovering at a slower pace as coronavirus curbs in the country lasted longer, but it was confident business there would return to strong levels this year.

It also warned industry-wide cost inflation would reach 8%-9% this financial year, higher than initially thought, as British households and businesses bear the brunt of inflation reaching its highest in three decades.

($1 = 0.7990 pounds)

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