Whitbread says it plans to cut 238 restaurants from its roster as part of a plan to drive returns for its UK business.
The Premier Inn owner says it will convert 112 lower-returning branded restaurants into new hotel rooms having first transferred the delivery of F&B to an integrated restaurant. It will also exit 126 lower-returning branded restaurants which will continue to operate as they currently do so they can be sold as going concerns, with the company already having agreed to sell 21 of these restaurants for £28 million.
Whitbread says this is part of a plan which aims to drive increased margins and returns for its UK business. The plan is expected to result in 3,500 new room extensions, taking the total number of rooms in the UK to 97,000 by the end of FY29, and will require around £500 million of investment over the next four years which Whitbread says will be funded through its existing annual capital expenditure programme.
The company adds that a one-off impact of between £20 million to £25 million reduction to UK adjusted pretax profit in FY25 will be fully recovered in FY26 and deliver incremental adjusted pretax profit of between £30 million to £40 million in FY27. It notes that by FY29 the plan should deliver increased adjusted pretax profit of between £80 million to £90 million.
The plan is expected to result in the reduction of around 1,500 roles out of a total UK workforce of 37,000.
This comes as Whitbread posted FY24 revenue for the 52 weeks to 29 February of £2.96 billion, up 13 per cent from FY23’s £2.62 billion and pretax profit of £452 million, up 21 per cent from the prior year’s £375 million. Premier Inn UK accounted for £2.77 billion of revenue for FY24.
In FY25, Whitbread plans to open between 750 to 1,250 rooms in the UK and around 400 rooms in Germany.
What they said
Dominic Paul, Whitbread chief executive said: “We are increasing our momentum to deliver long-term profitable growth and we plan to optimise our F&B offer at a number of our sites to unlock up to 3,500 room extensions that will enhance the service for our hotel guests and deliver increased operational efficiencies. The short-term impact on our profit performance this year will be more than offset by an uplift from FY27 with further increases thereafter in both margins and returns as we open more of the new extensions.”