(Reuters) - Revenue growth at Whitbread Plc (WTB.L) slowed in the first half of 2018 as the expansion of Premier Inn hotels only partly offset the impact of the uncertain economic and political outlook in Britain.
The group, which will focus on hotels after completing the $5 billion sale of its Costa Coffee chain to Coca-Cola (KO.N), said on Tuesday like-for-like revenue had grown just 0.2 percent in the period, reflecting an uncertain British economic mood before the planned exit from the European Union next March.
“Given the recent economic and political environment, along with inflationary pressures in the consumer sector, there is a degree of caution on demand,” the company said in statement.
Shares of the company fell nearly 3 percent in morning trading, hitting a near two-month low of 4,336 pence, before clawing back some of their losses to trade down 1.4 percent at 4,402p by 0735 GMT.
Revenue rose to 1.08 billion pounds from 1.05 billion, benefiting from an influx of tourists to the UK and a rise in overall capacity at its hotels, but was still just short of estimates from analysts at both Credit Suisse and Liberum.
The company outlined further planned investment in rooms in the UK and Germany, but said UK consumer demand had been weak, hurting its occupancy rate by 170 basis points in the first half.
Total sales growth in the UK at Premier Inn was 4.8 percent. Whitbread said it expects to open between 4,000 and 4,500 Premier Inn rooms in the UK and Germany in 2019, including two hotels in Germany, aiming to benefit from a trend for holidaymakers and business travellers to stay in cheaper accommodation.Premier Inn, which relies heavily on corporate demand, is also targeting clients in the Middle East with a partnership with airline Emirates [EMIRA.UL] and is expanding its operations in Dubai ahead of the World Expo to be held in 2020.
Founded 276 years ago as a brewery by Samuel Whitbread and Godfrey and Thomas Shewell, Whitbread grew into a sprawling group that had interests spanning pubs, fitness clubs, casual dining and Costa, which it bought for 19 million pounds in 1995.
The sale of the coffee chain extends a process of simplifying that business to centre on Premier Inn, but which also still takes in the Brewers Fayre and Beefeater pub and restaurant brands.
Most of the proceeds of the sale will be given to shareholders but Alison Brittain, chief executive, said in a statement the exact amount, timing and method would only be determined following talks with stakeholders.
Reporting by Karina Dsouza in Bengaluru; Editing by Patrick Graham and David Holmes