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Whitbread PLC on Tuesday hailed a ‘strong’ third quarter performance, and the hotel operator sees a lower-than-expected hit from UK business rates ahead. Whitbread shares rose 3.9% to 2,684.50 pence each in London on Tuesday morning, the best FTSE 100 performer. The wider FTSE 100 was flat. The Premier Inn owner now sees a roughly £35 million hit from changes to business rates, cut from its prior forecast of £40 million to £50 million for its next financial year. Turning to its current year, it reported a ‘strong performance’ in the third quarter ended November 27. Third quarter sales rose 2% on-year, or 3% on a like-for-like basis. In the UK alone, like-for-likes rose 2%, while in Germany, they surged 11%. Year-to-date, total sales are flat, rising 1% like-for-like. ‘In the UK, the overall market continued its return to growth and we delivered a positive revenue per available room performance, which has continued and stepped up in the current trading period. The structural shift in supply, together with our brand strength and commercial programme, means we are confident in our ability to maintain a healthy RevPAR premium versus the market,’ Chief Executive Dominic Paul said. ‘In Germany, demand has increased and we outperformed the wider market in what is an important trading period with a number of key events. We remain confident in reaching profitability this year, which is a key milestone as we progress towards fulfilling our ambition of becoming the country’s number one hotel brand.’ During the six weeks to January 8, UK accommodation sales and RevPAR were both up 4%. In Germany, accommodation sales were 11% higher during the period, with the RevPAR rising 5%. For the current financial year, Whitbread expects to deliver ‘greater cost efficiencies’ between £75 million and £80 million, across labour, technology and procurement. This is up from its previous view of £65 million and £70 million. It said it is ‘making great progress’ with around 90% of planning applications submitted. It also noted it sealed the sale of leaseback of nine further hotels for £89 million. The sale was to LondonMetric Property PLC and at ‘attractive yields’. LondonMetric said the sale and leaseback portfolio is let on new 30-year leases and generates £5.0 million of annual rent. ‘The mature and purpose-built hotels totalling 955 bedrooms are South East focused and located at Southampton Airport, Kings Langley, Milton Keynes, Poole, Colchester, Fareham, Waltham Abbey, Chipping Norton, and Warwick,’ LondonMetric added, noting Whitbreasd is now its fourth largest occupier. Whitbread now contributes £11.3 million of annual rent, 2.7% LondonMetric’s total. Whitbread said it is on track to recycle £250 million to £300 million of ‘property proceeds into high-returning growth opportunities’. It also said it plans to complete a £250 million share buyback by the end of April. So far, £217 million has been completed. In the UK, changes to business rates come into effect at the start of April, hitting the hospitality sector. Whitbread also owns the Brewers Fayre and Beefeater pub restaurant chains. CEO Paul said: ‘Looking forward, we now expect the cost impact from the proposed changes in business rates included in the recent UK budget to be [around] £35 million in FY27, which is lower than our preliminary estimate of £40 million-£50 million. We continue to believe the proposed changes to business rates are damaging for the overall sector and will impact future investment and job creation and we, along with the wider hospitality industry, continue to press the UK government for changes. ‘Our vertically integrated model means we are well-positioned to adapt to shifts in the trading and fiscal environment and can continue to deliver sustainable and long-term value for shareholders. As previously announced, in response to the recent UK budget, we are exploring a variety of options in order to further drive profits, margins and returns and will provide an update to the market regarding our five-year plan at the time of our FY26 preliminary results on 30 April 2026.’ LondonMetric shares were flat at 195.30 pence in London on Monday morning. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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