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Whitbread share price: what to expect from its Q1 results

When is Whitbread’s results date?

Whitbread will release its Q1 trading update on June 19.

Whitbread’s results preview: what does the City expect?

The last 12 months of trading have seen the hotel and restaurant group deliver a stellar performance, with strong earnings growth and significant value being returned to shareholders.

In what was a challenging year in terms of trading, with regional hotel market growth slowing over the last 12 months, Whitbread still managed to produce a solid financial performance.

Revenues for the continuing business were up by 2.1% to £2 billion and underlying operating profit was up by 0.6% to £466 million.

Just over year ago, Whitbread announced its plans to demerge its coffee chain, Costa, from the group, with the company eventually selling the unit to Coca-Cola in August 2018 for £3.9 billion.

The price achieved represented a significant premium compared to the value Whitbread would have gleaned if it had demerged the unit instead, with the capital from the deal helping the hotel and restaurant group to expand other operations at a faster pace, particularly of Premier Inn in the UK and Germany.

The sale also allowed Whitbread to return a significant proportion of the proceeds back to its shareholders, as well as helping the group pay down its debts and strengthen its overall balance sheet.

Whitbread share price soars after £2 billion share buyback plan

Since January this year, Whitbread has undertaken an on-market share buyback programme with the group returning around £380 million to shareholders to-date.

In February, the group announced its intention to run a tender offer, whereby all shareholders will be offered the opportunity to sell some or all their shares back to the company, with Whitbread looking to return up to a further £2 billion via this method.

In the weeks following the announcement, Whitbread’s share price climbed more than 7% to £51.14 a share in mid-March.

Whitbread’s share price is currently trading at £46.81 a share ahead of its Q1 results next week, though investment bank UBS has set a target price at £50 a share, contending that there is a potential upside of 5.6%.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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