As Whitbread busy themselves in preparing to secure liquidity through raising circa £1bn from shareholders, CEO Alison Brittain has sent out a note of acquisition intent to the hospitality industry.
Brittain in a note to the press said Whitbread didn’t need the £1bn to stay afloat, with the money intended as a war chest to make acquisitions.
She even outlined the basic strategy – targeting weaker chains and independents hit by the Covid-19 crisis. The hotel group suggested it would also look at pub sites that may become available.
Whitbread have been severely hit by Covid-19 itself and is unlikely to make a profit in the year ahead. Currently costs are in the region of £80 million a month while most of its estate is closed. As costs remain, income has been almost wiped out by the Covid-19 lockdown.
Hotel room, and food and drink revenues at Whitbread were down 99% in the seven weeks to 14 May after hotel chain Premier Inn closed the majority of its sites in late March.
The group made some bullish noises too, saying it hopes to open another 60 UK hotels in June. The potential openings follow the Government’s loosening of rules on categories of workers allowed to use hotels. New categories include a workers in sectors including utilities, IT, and food production.
In relation to potential future acquisitions Brittain added: “We want to invest in the business without being cautious about it and we think there are going to be very significant opportunities to do that. A lot of people will struggle with either cash flow or profit.”
Yesterday we were predicting a frenzy in restaurant acquisitions. Whitbread signalling their imminent acquisition intent feeds that frenzy with even more bite.
Whitbread CEO serves notice of acquisition intent