Premier Inn owner to return £2.5bn to investors and slash costs
Premier Inn owner Whitbread has unveiled plans to return another £2 bn (€2.28bn) to investors following its Costa Coffee sale and slash costs by a further £220m (€251m).
Whitbread said it also saw potential to double the Premier Inn hotel chain to more than 170,000 rooms, including at least 110,000 in the UK, as part of a strategy update to investors.
It currently has over 74,000 rooms in the UK.
Whitbread shares rose nearly 3% as investors cheered plans to return cash from the mammoth £3.9 bn (€4.45 bn) sale of Costa to Coca-Cola.
The group's share buy-back plans mean it will be returning £2.5 bn (€2.85 bn) in total to investors, having already kicked off a £500m (€571m) programme in January after the £3.9 bn (€4.45 bn) Costa sale.
On the cost cuts, Whitbread said it would look to make the additional savings over the next three years.
The group did not give details of where the savings would come from, but they come on top of the £150m (€171m) achieved over the past three years.
Whitbread said the new target includes £120 m (€137 m)of operating cost savings and £100 m (€114 m) of capital cost savings.
Its new plans, which were revealed at its capital markets day, come just over a month after it completed the sale of Costa following investor pressure for a break-up.
Whitbread is already the biggest operator in the UK budget hotels market with Premier Inn, with an 11% of the 700,000 rooms currently on offer.
The group's new expansion target sees it increase the original aim for 100,000 rooms in the UK.
It also wants to "replicate the success" of Premier Inn in the UK across Germany, outlining aims for at least 60,000 rooms.
Whitbread created Premier Inn in 2004 through the combination of the Travel Inn and Premier Lodge businesses.
