Whitbread has recorded a 14% drop in its adjusted pre-tax profit, reaching £483m in the year to 27 February 2025.

The Premier Inn owner said the fall was a result of its accelerating growth plan, cost inflation and lower interest income, which has been partially offset by increased cost savings and "excellent progress" in Germany.

The drop was in line with Whitbread's expectations, as its revenue fell in this period by 1% to £2.92bn.

Furthermore, its earnings per share dropped by 12% to 141.5 pence per share.

The hospitality firm said in its full-year preliminary results announcement that its five-year plan is currently on track to deliver incremental adjusted profit before tax of at least £300m by the 2030 financial year.

It added that its accelerating growth plan is "progressing well", as its looks to replace lower-returning branded restaurants with an "integrated F&B offering".

Chief executive at Whitbread, Dominic Paul, said: "Having laid the foundations for significant growth, we are executing at pace and making excellent progress on our strategic initiatives, against what has been a softer market backdrop over the past year. By focusing on what we can control, our five-year plan is on track to deliver a step-change in our profits, margins and returns and we remain positive about the medium-term outlook.

"In the UK and Ireland, our accelerating growth plan is progressing well and as we open our growing committed pipeline, we will reach at least 98,000 open rooms by FY30.

Looking ahead, Whitbread said it was positive about its medium-term outlook and the delivery of its five-year plan.

It added that while is has "limited visibility" of short-term market demand and inflation, its model means it has self-help levers that can provide positive like-for-like sales momentum, whilst also reducing costs.

The firm has also launched a new £250m share buyback scheme, which is set to be completed over the next 12 months.

Head of equity research at Hargreaves Lansdown, Derren Nathan, said that investors "won’t be losing too much sleep" following the results.

He added: "It’s tough out there for hoteliers but the UK’s largest hotel brand is continuing to outperform the competition. Domestic room openings offset a small drop in occupancy and room rates, but it takes time for new beds to match the profitability of the existing estate. That’s reflected in a fall in profitability.

"The group’s sticking to its room opening plan but if the market remains weak the bottom line will remain under pressure this year. There’s little room to push up room rates, and while Whitbread’s cost management is impressive, it’s still expecting around 2% inflation on UK costs.

"Whitbread’s a quality outfit in a robust financial position. It’s sticking to its promises to payout over £2bn to shareholders by 2030, but with significant investment plans on the horizon, management will be hoping the demand picture doesn’t deteriorate. That will be down to the health of the global economy, which remains firmly under the cloud of tariff uncertainty."

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