Whitbread share price falls after Q1 sales plummet
The British multinational hotel and restaurant group saw its share price slump on Tuesday after its first quarter (Q1) earnings showed a major dip in sales.
Whitbread has seen its share price fall more than 4% in early morning trading after the company unveiled a signifcant slump in sales in its first quarter results.
Sales at the British hotel and restaurant group fell by 79.4% in its first three months of trading as a result of the coronavirus pandemic, with the company hoping to bounce back from the crisis now that the majority of its sites will reopen by the end of July.
‘We are very pleased to have commenced the reopening of our hotel and restaurant estates, which are now able to welcome all business and leisure guests. In the UK we currently have over 270 hotels open and expect the majority of the remainder of the estate to be open by the end of July, Whitbread CEO Alison Brittain said in a statement.
‘In Germany all of our 19 operational hotels are open, including 13 that were refurbished and rebranded as Premier Inn during the lock-down period,’ she added.
The company admitted that it is still too early at this stage to draw any conclusions from the early bookings its restaurants and hotels have received so far. But the business did say that regional tourist destinations are seeing good demand, with travellers eager to have a summer holiday in spite of fears of a second wave of coronavirus cases.
Whitbread shares are trading at £23.33 at the time of publication, with the stock down 44% year-to-date.
Whitbread completes £1 billion rights issue
‘The successful completion of the £1bn rights issue on 10 June will enable us to maintain our competitive advantage and financial flexibility, as we have both strengthened our balance sheet and secured the business so it can withstand a long period of low revenues,’ Brittain said in the company’s Q1 results.
‘Our strong balance sheet, alongside both our leading operating model and the power of our brands, means that we are in the best possible position to take advantage of enhanced structural opportunities that we expect to become available in both the UK and Germany,’ she added.
The billion pound rights issue at £15 a share will not only strengthen its balance sheet during these unprecedented market conditions, but also help the hotel and restaurant owner take advantage of cheaper land prices in the UK and Germany in the wake of the coronavirus crisis.
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