Shares of Premier Inn owner Whitbread PLC (GB:WTB) soared over 5% after the company outlined its five-year plan to generate higher profits and boost shareholder returns. The company projected that its adjusted pretax profit will rise by at least £300 million by Fiscal 2030 compared to the current year. It also expects to generate over £2 billion for dividends, share buybacks, and potential additional investments.
Whitbread is a British hospitality company that operates hotels and restaurants. The company owns Premier Inn, the UK’s largest hotel chain.
Whitbread Releases H1 Results with Favourable Outlook
In H1 FY25, Whitbread’s revenue remained relatively unchanged at £1.57 billion. Meanwhile, the company reported a 13% decline in its adjusted pre-tax profit of £340 million, compared to £391 million in the same period last year. Whitbread noted that the decrease was partly due to the effects of its growth initiatives on the UK revenue.
The company reported that performance improved in the six weeks leading up to October 10, following a sluggish start in September. The company also noted that demand in the leisure sector is still strong, with a noticeable increase in bookings throughout October and into November.
Speaking of shareholder returns, Whitbread announced an interim dividend of 36.4p per share, an increase from the previous 34.1p per share. Additionally, it initiated a £100 million share buyback program, set to be completed by its preliminary results scheduled on May 1, 2025.
Moving ahead, Whitbread expects an additional £10 million in cost efficiencies in FY25, bringing the total to £60 million. The company has also expanded its program to achieve an average of £50 million in cost savings annually through FY30.
Is Whitbread a Good Share to Buy?
On TipRanks, WTB stock has received a Strong Buy consensus rating based on a total of 12 recommendations. It includes 10 Buy and two Hold ratings. The Whitbread share price target is 3,961.01p, which implies an upside potential of 22.6% from the current trading levels.
