Premier Inn owner Whitbread looks beyond lockdown after 1,500 job cuts

Premier Inn owner Whitbread said on Thursday that a restructuring of its hotels and restaurants had resulted in around 1,500 job cuts, rather than the 6,000 predicted, and that it had outperformed the British market.

Shares in Whitbread, which also owns the Beefeater, Brewers Fayre and Bar + Block chains, were up 4.5% to 3,196.9 pence at 1141 GMT after it said it hit targeted cost savings as more employees took a cut in maximum contracted hours.

Britain's hospitality industry is suffering from the coronavirus crisis, with travel and entertainment spending severely limited by government rules to stop COVID-19's spread.

"Lockdowns drive the short term narrative but we argue that WTB will be the quickest company in our hotel coverage to recover," Jefferies analysts said.

After local restrictions in the run-up to Christmas, England moved into a third lockdown last week, shutting two-thirds of Whitbread's hotels and all of its restaurants.

Although Whitbread's total UK accommodation sales were down 55.2% for the 13 weeks ending Nov. 26, it said its performance over this period was 8.9 percentage points ahead of the midscale and economy market.

"With the vaccination programme underway, we look forward to the potential gradual relaxation of restrictions from the Spring," Chief Executive Alison Brittain said on a call.

Brittain told reporters that Whitbread is working on the assumption that there will be a tiering system after the lockdown and expects it to be in place beyond Easter.

Whitbread, which last year raised 1 billion pounds to weather the crisis, also said it had cash on deposit of 814.9 million pounds ($1.11 billion) and access to a 900 million pound undrawn revolving credit facility.

The group expects investment in its German expansion plans and COVID-19 curbs to delay the sales maturity of its operating hotels by 12-18 months and said losses there will increase in fiscal 2022 and continue into 2023.

The recent acquisition of 13 hotels in Germany will result in a loss of around 10 million pounds ($13.64 million) there next year while the sites are refurbished, Whitbread said.