Whitbread confirms 1,500 job cuts as sales plunge

By James McAllister

- Last updated on GMT

Beefeater and Brewers Fayre operator Whitbread confirms 1,500 job cuts as sales plunge

Related tags Whitbread Restaurant Hotel Coronavirus Job losses

Whitbread has confirmed 1,500 job cuts from across its restaurant and hotel businesses amid a downturn in trade that saw sales more than halve.

The number of jobs axed is much less than the 6,000 initially forecast​ by the Beefeater and Brewers Fayre operator back in September.

It was subsequently reported in November that Whitbread was set to significantly reduce the number of job cuts proposed​, but it wasn't confirmed how many roles would be spared.

At the time it was understood that the decision had been based, in part, on the Chancellor's further extension of the furlough scheme.

The group, which also owns the Bar + Block steakhouse concept and the Premier Inn hotel chain, said it does not expect to make any more job cuts in the near future.

For the 13 weeks to 26 November, the business was able to open around 82% of its UK restaurant sites; with reduced capacity and demand, total sales were down 53.9% year-on-year.

UK accommodation sales were down 55.2% for the period, and dipped further in the five weeks to 31 December, with total sales down 66.4% and occupancy at just 31.1%.

However, as increased restrictions continued to impact the wider industry, Premier Inn’s share of the total hotel market by revenue grew by 4.1% to 11.4% in the quarter.

At 31 December 2020, the group’s net cash position was approximately £40.0m, compared to £196.4m at the end of H1.

Capital spend was £98.4m in the four months to 31 December 2020, and the group also had cash on deposit of £814.9m; access to a £900m undrawn revolving credit facility; and up to £300m available under the Government’s Covid Corporate Financing Facility (CCFF) scheme.

Whitbread's German business, meanwhile, saw sales were down 54.7% in the five weeks to 31 December 2020, and total Group sales were down 73.3% in the same period.

“We expect the current travel restrictions in the UK and Germany to remain until at the very least the end of our financial year,” said CEO Alison Brittain.

“With the vaccination programme underway, we look forward to the potential gradual relaxation of restrictions from the Spring, business and leisure confidence returning, and our market recovering over the rest of the year.

“We are well placed to continue to outperform the increasingly constrained budget branded and independent competitor sets, by leveraging the benefits of our unique operating model.

"We expect to see increasing opportunities to develop in both the UK and Germany and are pleased to have accelerated our growth in Germany with the recent acquisition of 13 hotels, taking the open and committed pipeline to 68 hotels, a major step on our path to achieving a nation-wide footprint with representation in most major towns and cities.

“We continue to protect our liquidity through the careful management of our cash position, and to take actions to ensure that we exit the crisis as a leaner, stronger and more resilient business.

"Our strong balance sheet also provides the opportunity to take full advantage of the enhanced structural opportunities that we are already seeing in the market.”

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