The chief executive, Peter Jarvis, added, however, that Whitbread preferred to grow organically. Last year the company spent pounds 345m on capital expenditure, more than three times the rate of spend needed simply to replace its existing operating assets.
Spending of more than pounds 400m is promised this year as Whitbread steps up its move away from its traditional brewing roots into the faster-growing areas of managed pubs, hotels and leisure activities.
Mr Jarvis was speaking as Whitbread announced an 11 per cent rise in profits before tax and exceptional items, with higher profits from all four of its divisions. Star of the show was the restaurants and leisure arm, where the acquisitions of Marriott's UK hotels and the David Lloyd leisure clubs operation boosted profits by more than one third.
That contributed to a rise in group profits from pounds 275.4m to pounds 285.7m. Earnings per share increased from 38.5p to 43.3p, from which a dividend of 21.9p, up 8 per cent, was paid.
The restaurants and leisure division, which also takes in Whitbread's Beefeater restaurant chain, TGI Friday's and Costa Coffee, received a high share of the year's capital spending, helping to turn around sales at Pizza Hut, following 1993's profit collapse, and improve trading at Thresher, the drinks retailer, which also benefited from good summer weather, Sunday opening hours and the sale of Lottery tickets.
Profit and turnover at Whitbread Inns, which both grew by 13 per cent in the period, were driven by a strong showing from food sales, the fastest- growing part of the pub business, and an area in which Whitbread generates much higher sales per pub than its competitors.
Whitbread's shares, up 27 per cent over the past year, gave up 8p on profit-taking yesterday to close at 738p.
Investment Column, page 18