Shares in Whitbread (LON:WTB) have posted a hefty fall in London this morning, even as the company reported a rise in revenue and profits for the first half of its financial year. Profit at its Costa Coffee unit, however, came in flat amid ongoing cost headwinds.
As of 09:12 BST, Whitbread’s share price was 4.13 percent lower at 3,779.00p, underperofmring the broader UK market, with the benchmark FTSE 100 index currently standing 0.03 percent lower at 7,522.49 points. The group’s shares have lost more than one percent of their value over the past year, as compared with an over seven-percent rise in the Footsie.
Whitbread announced in a statement this morning that its revenue had climbed 7.4 percent to £1.67 billion in the six months ended August 31, while its underlying operating profit had come in 7.1 percent higher at £342 million. The company further reported that operating profit at its Premier Inn business had grown to £295 million. At Costa Coffee, however, operating profit remained flat at £65 million.
“I am pleased with the progress we have made in executing the plan we set out in November last year, with earnings per share up 7.4 percent in the half and return on capital of 15.4 percent,” the group’s chief executive Alison Brittain said in the statement. The company further lifted its interim dividend to 31.4p.
Analysts weigh in
City A.M. quoted Nicholas Hyett, equity analyst at Hargreaves Lansdown, as commenting that while there was “clearly plenty of buzz around what Whitbread has to offer,” rapidly increasing revenue was not “enough to guarantee chief executive Alison Brittain a good night’s sleep, since the group is also having to cope with a whole raft of cost headwinds, from labour to the cost o’coffee and business rates”.