Shares in Whitbread (LON:WTB) have fallen into the red in London this morning even as the Premier Inn owner reported a rise in revenues for the first half of its financial year. The news comes after the company recently agreed to sell its Costa Coffee business to The Coca Cola Company.
As of 08:40 BST, Whitbread’s share price had given up 1.55 percent to 4,395.00p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.70 percent lower at 6,993.76 points. The group’s shares have added more than 11 percent to their value over the past year, as compared with about a seven-percent drop in the Footsie.
Whitbread updates on performance
Whitbread announced in a statement this morning that its revenue had climbed 2.6 percent to £1.08 billion in the first half of its financial year, while its underlying operating profit had surged 2.9 percent to £286 million. The company said that its Costa business was now reported as a discontinued operation, with statutory profit for the period having increased 3.5 percent to £47 million. The update comes after earlier this month, the FTSE 100 group’s shareholders overwhelmingly backed the proposed sale of Costa Coffee to The Coca Cola Company.
“The highlight of the first half was the announcement of our agreement for the sale of Costa to The Coca-Cola Company for £3.9 billion, which received the overwhelming approval of our shareholders in October,” Whitbread’s chief executive Alison Brittain commented in the statement. “We intend to return a significant majority of the net cash proceeds to shareholders, although the exact amount, timing and method will be determined following discussions with stakeholders.”
Analysts on Premier Inn owner
The 18 analysts offering 12-month price targets for Whitbread for the Financial Times have a median target of 4,900.00p on the shares, with a high estimate of 5,600.00p and a low estimate of 2,000.00p. As of October 20, the consensus forecast amongst 22 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.