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Whitbread PLC on Friday warned that measures announced in the UK government’s 2025 budget will significantly increase its cost base next year, even as the firm maintained confidence in its current-year outlook. The Dunstable, Bedfordshire-based owner of Premier Inn chain said third-quarter trading remained strong, with UK revenue per available room continuing to grow and forward bookings running ahead of last year. In Germany, demand improved further in the quarter, helped by a robust events calendar, and Whitbread said it continues to outperform the market. Guidance for the financial year ending February 2026 is unchanged. However, Whitbread said the budget’s changes to business rates, driven by higher rateable values for many hotels, will materially increase costs in the next financial year. The group now expects the changes to business rates to result in a £40 million to £50 million hit in the year to February 2027. Shares in Whitbread traded 6.4% lower at 2,632.00 pence each early afternoon in London on Friday. Including the estimated effects of the budget, Whitbread forecasts gross UK cost inflation of 7% to 8% on its £1.7 billion cost base. After accelerated cost-saving measures totalling £60 million, net UK cost inflation is expected to be 3.5% to 4.5%. Chief Executive Officer Dominic Paul said the company was ‘extremely disappointed’ by the budget outcome, warning it would have ‘a significant impact on our business and the wider hospitality industry.’ He added: ‘We have a strong track record of responding to inflationary headwinds& and over time, we are well placed to mitigate their impact through careful management of our cost base.’ Whitbread said it will explore further options in the coming months to support profits, margins and returns ahead of its third-quarter trading update on January 13. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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