• Group hopes Premier Inn hotel chain will reopen soon as UK eases itself out of lockdown
• Yet for investors it remains unclear when the business will fully reopen and what impact the ongoing distancing measures might have on revenues
• Results show 8% drop in adjusted pre-tax profits to £358.3m, although figures only run up to February so do not include any of the impact of the Covid-19 pandemic
• Shares fall 15% in early trading
• Recommendation: The shares do not look good value and with so much uncertainty about future trading we maintain our Sell recommendation

Whitbread today reported full-year results and while the quarterly performance had improved steadily in the year to February, most of its hotels and restaurants closed in March so the full impact of the lockdown is yet to be seen. Around 27,000 staff have been put on furlough, but Whitbread said it has now established protocols to enable its UK hotels to open and says it is ready when the government gives the go-ahead. The German hotels reopened ten days ago.

The company is taking a range of measures to boost its finances during the pandemic and says it plans to use the proceeds of the rights issue to grow its Premier Inn business in the UK and Germany. However, for investors there remains a lot of doubt about when its UK business will fully reopen and what impact the ongoing distancing measures might have on revenues. The severe economic slowdown could also have a longer lasting impact on demand and dividends remain suspended.

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