Whitbread (LON:WTB) has inked a deal to acquire a portfolio of 19 hotels in Germany as it looks to boost the presence of its Premier Inn business in the country, the company has said. The move comes after the FTSE 100 group, which also owns Costa Coffee, recently posted weak like-for-like sales growth in the UK due to tough market conditions.
Whitbread’s share price has been little changed on the news, having lost 0.28 percent to 3,917.00p as of 09:48 GMT. The decline is largely in line with losses in the broader UK market, with the benchmark FTSE 100 index currently standing 0.25 percent lower at 7,264.19 points. The group’s shares have added a little over two percent to their value over the past year, as compared with a flat Footsie.
Whitbread snaps up German hotels
Whitbread announced in a statement this morning that it had acquired a portfolio of 19 hotels in Germany, from Foremost Hospitality. The acquisition, which is for an undisclosed amount, is intended to boost Premier Inn’s presence in the country, increasing the unit’s total committed network pipeline to 31 hotels with over 5,700 rooms.
“We believe Germany has many of the structural growth drivers that have underpinned the success of Premier Inn in the UK and that Germany is a market that will deliver strong returns in the future,” the FTSE 100 group’s chief executive Alison Brittain commented in the statement.
The company noted that the German hotel market, which is 35 percent larger than the UK, is similar to the British market 10 years ago, experiencing a structural shift from independent hotels to branded hotels, which, Whitbread argues, are the biggest beneficiary of the shift.
Analysts on Premier Inn owner
The 23 analysts offering 12-month price targets for Whitbread for the Financial Times have a median target of 4,150.00p on the shares, with a high estimate of 4,950.00p and a low estimate of 3,100.00p. As of February 24, the consensus forecast amongst 28 polled investment analysts covering the Costa Coffee and Premier Inn owner advises investors to hold their position in the company.