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1. Company Snapshot

1.a. Company Description

Whitbread plc operates hotels and restaurants in the United Kingdom, Germany, and internationally.It operates approximately 841 hotels with 82,286 rooms in the United Kingdom; 10 hotels in the Middle East; and 35 hotels with 5,875 rooms in Germany under the Premier Inn, ZIP by Premier Inn, and hub by Premier Inn brands.The company also operates 439 restaurants under the Brewers Fayre, Beefeater, Whitbread Inns, Cookhouse & Pub, Bar+Block Steakhouse, Thyme, and Table Table brands in the United Kingdom.


Whitbread plc was founded in 1742 and is based in Dunstable, the United Kingdom.

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1.b. Last Insights on WTB

Whitbread's recent performance was impacted by sluggish earnings growth, with the company's solid earnings report being conservatively accounted for. Rising labour costs and food inflation have been mitigated through cost-cutting measures, but Premier Inn sales have slipped in the UK. Additionally, the economic growth slowdown could lead to a downgrade in the Office for Budget Responsibility's assessment. According to a recent report, Whitbread's intrinsic value is potentially 24% below its share price (Source: UK£21.91 fair value estimate).

1.c. Company Highlights

2. Whitbread Delivers Resilient Performance Amid Challenging U.K. Market

Whitbread reported its full-year 2025 results, showcasing a mix of resilience and strategic progress despite a softer U.K. market. The company maintained flat accommodation sales year-over-year, outperforming the broader mid-scale and economy segments. Food and beverage revenues declined as expected, reflecting the strategic exit from lower-return branded restaurant sites. Whitbread also added 3,500 high-returning extension rooms, underscoring its focus on growth through high-margin opportunities. The company delivered £75 million in efficiency savings, surpassing its previous guidance, and reduced its U.K. cost base by 1% despite inflationary pressures. Diluted EPS came in at 0.571, slightly below consensus estimates of 0.617, reflecting margin pressures in certain segments.

Publication Date: May -03

📋 Highlights
  • Flat U.K. Accommodation Sales: Maintained year-over-year despite softer market demand, outperforming mid-scale and economy segments.
  • German Progress: Reduced losses significantly, on track for £5-10 million profit by 2026 with double-digit RevPAR growth.
  • £75 Million Efficiency Savings: Exceeded guidance, reducing U.K. cost base by 1% despite inflationary pressures.
  • Five-Year Growth Plan: Aims to deliver £300 million incremental profits and £2 billion shareholder returns by 2030.
  • Additional Share Buyback: Announced £250 million buyback, reflecting confidence in strategic progress and financial performance.

Operational Highlights and Strategic Progress

Whitbread's U.K. operations remain under pressure, with current trading behind last year, though forward booked revenue is ahead, supported by strong summer bookings. Germany, however, emerged as a bright spot, with significant progress in reducing losses and delivering strong trading performance. The company is on track to achieve its target of £5 million to £10 million in pre-tax profit in Germany by full-year 2026. Whitbread's five-year plan aims to deliver £300 million in incremental profits and over £2 billion in shareholder returns by 2030, supported by strong cash flow and £1 billion from recycling mature property assets.

Valuation and Shareholder Returns

Whitbread's shares trade at a P/E ratio of 20.59, reflecting market confidence in its long-term growth strategy. The company's P/B ratio of 1.41 and EV/EBITDA of 5.89 suggest a fair valuation relative to its peers, with its dividend yield of 3.67% providing attractive income for investors. Whitbread also announced an additional £250 million share buyback program, signaling confidence in its financial health and commitment to returning capital to shareholders.

Analyst Q&A and Strategic Focus

During the earnings call, management addressed key questions about RevPAR growth, property valuation, and market expansion. Dominic Paul highlighted that RevPAR growth is driven by customer segmentation and higher-yielding rooms rather than pricing alone. The company's focus on expanding Premier Inn and the Hub brand, particularly in urban locations, is expected to drive long-term growth. Whitbread's strategic focus on returns over pure growth, coupled with its robust commercial strategies, positions it well to navigate macroeconomic uncertainty and deliver on its five-year plan.

Outlook and Conclusion

Analysts expect Whitbread's revenues to grow -0.2% next year, reflecting ongoing macroeconomic challenges. However, the company's strong pipeline of room openings, improving performance in Germany, and disciplined cost management provide a solid foundation for future growth. Whitbread's ability to balance short-term pressures with long-term strategic initiatives underscores its resilience and growth potential.

3. NewsRoom

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FTSE 100 Live: Blue-chip index flat; banks and builders on the march

Nov -27

Source: proactiveinvestors.com

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FTSE 100 Live: London index dragged down by ex-divs and tobacco stocks

Nov -27

Source: proactiveinvestors.com

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Best and worst UK hotel chains revealed

Nov -06

Source:

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Whitbread's (LON:WTB) Solid Earnings Have Been Accounted For Conservatively

Oct -28

Source:

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Whitbread plc's (LON:WTB) Intrinsic Value Is Potentially 24% Below Its Share Price

Oct -17

Source:

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FTSE 100 closes higher despite sluggish economic growth

Oct -16

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Premier Inn sales slip in UK despite boost from Oasis gigs

Oct -16

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What Is Whitbread plc's (LON:WTB) Share Price Doing?

Aug -11

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.56%)

6. Segments

Accommodation

Expected Growth: 4%

Whitbread's Accommodation segment growth is driven by increasing demand for budget hotels, strategic expansion into new locations, and investments in digital platforms to enhance customer experience. Additionally, the company's focus on providing high-quality services, improving operational efficiency, and maintaining a strong brand reputation contribute to its growth.

Food, Beverage, and Other Items

Expected Growth: 6%

Whitbread plc's 6% growth in Food, Beverage, and Other Items is driven by increasing demand for premium coffee and breakfast offerings, successful menu innovation, and expansion of Costa Coffee and Premier Inn outlets. Additionally, strategic pricing, effective cost management, and investments in digital capabilities have contributed to the growth.

7. Detailed Products

Premier Inn

A chain of budget hotels offering comfortable and affordable accommodations for business and leisure travelers

Hub by Premier Inn

A compact, stylish, and affordable hotel concept designed for urban travelers

Restaurants (Brewers Fayre, Table Table, and Cookhouse + Pub)

A range of restaurants offering a variety of cuisines and dining experiences

Costa Coffee

A global coffee shop chain offering a wide range of coffee and food options

8. Whitbread plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Whitbread plc, as a hospitality company, faces a moderate threat of substitutes. While there are alternative accommodations and dining options available, the company's strong brand presence and loyalty programs help to mitigate this threat.

Bargaining Power Of Customers

Whitbread plc's customers have relatively low bargaining power due to the company's large market share and diversified portfolio of brands. This limits customers' ability to negotiate prices or demand customized services.

Bargaining Power Of Suppliers

Whitbread plc's suppliers, such as food and beverage providers, have moderate bargaining power. While the company has some dependence on these suppliers, its large scale and diversified supply chain help to mitigate this risk.

Threat Of New Entrants

The threat of new entrants in the hospitality industry is relatively low due to the high barriers to entry, including significant capital requirements and regulatory hurdles. Whitbread plc's established brand presence and scale also make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The hospitality industry is highly competitive, with many established players vying for market share. Whitbread plc faces intense rivalry from other hotel chains, online travel agencies, and alternative accommodation providers, which can lead to pricing pressure and marketing expenditure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 59.14%
Debt Cost 5.06%
Equity Weight 40.86%
Equity Cost 9.32%
WACC 6.80%
Leverage 144.72%

11. Quality Control: Whitbread plc passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
NEXT

A-Score: 5.6/10

Value: 1.8

Growth: 5.7

Quality: 6.7

Yield: 4.4

Momentum: 7.0

Volatility: 8.0

1-Year Total Return ->

View Full Report
Stock-Card
InterContinental Hotels

A-Score: 5.4/10

Value: 3.8

Growth: 6.2

Quality: 6.3

Yield: 1.9

Momentum: 6.0

Volatility: 8.3

1-Year Total Return ->

View Full Report
Stock-Card
Whitbread

A-Score: 5.2/10

Value: 4.4

Growth: 5.9

Quality: 3.8

Yield: 4.4

Momentum: 5.0

Volatility: 7.7

1-Year Total Return ->

View Full Report
Stock-Card
Redrow

A-Score: 4.9/10

Value: 6.7

Growth: 3.8

Quality: 7.4

Yield: 4.4

Momentum: 4.0

Volatility: 3.0

1-Year Total Return ->

View Full Report
Stock-Card
Accor

A-Score: 4.8/10

Value: 3.6

Growth: 6.2

Quality: 5.3

Yield: 3.1

Momentum: 4.0

Volatility: 6.3

1-Year Total Return ->

View Full Report
Stock-Card
Pandox

A-Score: 4.4/10

Value: 4.3

Growth: 5.4

Quality: 3.9

Yield: 2.5

Momentum: 3.5

Volatility: 6.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

23.73$

Current Price

23.73$

Potential

-0.00%

Expected Cash-Flows