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Whitbread FY20 Pre-tax Profit Rises; Says COVID-19 To Impact FY21 Earnings

British restaurant company Whitbread plc (WTB.L) reported Thursday that its fiscal 2020 profit before tax rose 28.4 percent to 280 million pounds from a restated 218 million pounds in the prior year.

The increase in profit was primarily due to separation costs incurred in the prior year from the disposal of the Costa business.

Statutory profit for the year increased 23.2 percent to 218 million pounds from a restated 177 million pounds last year. Basic earnings per share grew 50.9 percent to 145.9 pence from 96.7 pence a year ago.

Adjusted profit before tax was 358 million pounds, compared to 390 million pounds last year. Adjusted basic earnings per share were 193.6 pence, compared to 172.0 pence a year ago.

The results reflect weaker UK travel market conditions, particularly in the regions, the high rate of industry-wide inflation, despite mitigating cost saving actions, and the start-up nature of the company's German operations.

Revenue for the year increased 1.1 percent to 2.07 billion pounds from 2.05 billion pounds in the prior year.

Whitbread noted that its quarterly performance improved sequentially through the year, with fourth-quarter total UK accommodation sales growth 20 basis points ahead of the market.

The company's board has decided not to declare a final dividend for the full year 2020 and to suspend future dividend payments until the COVID-19 situation is clearer.

Whitbread said its UK hotels are ready to open when the government advises. However, internal scenarios include the assumption that hotels are closed, or at low levels of occupancy, until September 2020. The company's German hotels re-opened on 11 May 2020.

Looking ahead to fiscal 2021, Whitebread said that COVID-19 is expected to result in a very material loss of revenue during the year.

The company added that COVID-19 is likely to have a material impact on its earnings which may result in the Group not making any profit during the financial year, with the clear possibility that it is materially loss-making during that period.

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