Coronavirus: Premier Inn owner aims to raise £1bn to battle crisis

Lianna BrindedHead of Yahoo Finance UK
Yahoo Finance UK
Photo: Getty
Photo: Getty

Whitbread (WTB.L), owner of huge UK brands such as Premier Inn, hopes to raise £1bn ($1.2bn) to help it battle the impact of the coronavirus pandemic.

It aims to raise the funds through a rights issue — giving the option to existing shareholders to purchase additional new shares in the company. The proposal is that Whitbread will offer one new share for every two existing shares.

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Whitbread said in a statement that “the purpose of the rights issue is to ensure that Whitbread emerges from the COVID-19 pandemic in the strongest possible position to take advantage of its long-term structural growth opportunities and win market share in both the United Kingdom and Germany.”

Whitbread announced at the same time that its adjusted pretax profit dropped to £358m for the year ending 27 February — just before the mass lockdowns — from £390m a year earlier.

It has already suspended its dividends for shareholders and it has had to shut all its hotels and restaurants in March due to the spread of COVID-19.

The group said it only expects to reopen hotels and restaurants in the UK in September at the very earliest. It has already reopened 16 hotels in Germany.

“Despite the challenges the industry faces, Whitbread's strategy to drive long-term value has not changed and remains compelling,” said Alison Brittain, CEO of Whitbread.  

“We have a significant opportunity to continue to build out our pipeline in the UK, along with optimising our large network of hotels by investing in upgraded formats such as our Premier Plus rooms, which are proving very popular with both our business and leisure guests. Germany offers an enormous opportunity for structural growth, with a large domestic market and a fragmented and  declining independent sector.  

“As a result of the current crisis, we expect there to be an impact on the competitive landscape and to see a material slowdown in the supply of rooms in both our key markets, and potentially an acceleration in the decline of the large independent sector. Our ownership and operating model underpins a winning customer proposition, that we believe will thrive as customers return to travelling domestically and continue to seek value and to rely on their most trusted brands.” 

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