Snow 'n' ice dents Whitbread's fortunes

'Value' meal deals are continuing to drive customers into Whitbread's pub restaurants, the group said today, but it warned recent bad weather had slowed sales.

In the 39 weeks to December 2, 2010, the hotels-to-pubs group said total covers in its 370-strong restaurant empire had risen 5.5 per cent with "great value meals underpinning performance".

However it warned that sales growth had slowed in the third quarter, exacerbated by the recent difficult weather conditions.

Like-for-like sales in the 39 week period rose 3.3 per cent, and in the third quarter by 1.5 per cent.

Andy Harrison, Whitbread's chief executive, said the business retained what he called "substantial growth opportunities", while it planned to have opened nine new pub restaurants and 26 new hotels by the end of the current financial year.

"The positive momentum in our business gives us confidence that, despite tougher comparatives and an uncertain outlook for consumer spending, the outturn for the full year will be in line with market expectations for strong profit growth," he added.

Despite the relatively upbeat statement Whitbread's shares dipped by two per cent.

Analyst Nigel Hicks, of Liberum Capital, said the performance of Whitbread's restaurants was "slightly disappointing" in the light of recent trends reported by other managed pub operators in the last few weeks, "although with this reporting period takes into account some of the snow-affected late November and early December, so it is possibly not a Whitbread issue. It had tougher comparatives than most others after a strong performance last year".

Simon French of Panmure Gordon said he did not expect consensus expectations [of £285m-worth of annual pre-tax profits] to move upwards "given what seems to have been a difficult start to the fourth quarter given the recent weather conditions and the strong comparative period".