Whitbread, the owner of Premier Inn hotels, trimmed its full-year profit outlook for its German business, citing a softer market during the summer due to fewer major events.
The company now expects its German division to post an adjusted profit before tax of up to 5 million British Pounds, down from a previous forecast of between 5 million and 10 million British Pounds.
The downgrade came as Whitbread reported a 7% drop in group adjusted pretax profit to 316 million British Pounds for the 26 weeks to Aug. 28, on revenue that fell 2% to 1.54 billion British Pounds.
Despite the weaker outlook, the company said its German business is still on track to reach profitability this year, with first-half sales growing 9% and its adjusted pretax loss narrowing to 3 million British Pounds from 9 million British Pounds a year earlier.
In the U.K., Premier Inn's main market, accommodation sales were broadly flat, while food and beverage sales fell 11% as part of a plan to convert restaurants into hotel rooms.
"In Germany, we maintained our outperformance versus the M&E market, having traded well in what was a softer than expected demand environment over the summer," said Chief Executive Dominic Paul.
"We are continuing to grow our committed pipeline and having agreed the acquisition of eight hotels in prime city-centre locations, we are building a business of real scale."
Whitbread held its interim dividend flat at 36.4 pence per share and said it was on track to complete a 250 million British Pounds share buy-back.