Investment: Whitbread set for hard times

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VIEWS ARE mixed about where Whitbread goes from here. Forecasts for the full year to February 1999 have been shaved from profits of pounds 380m at the top to about pounds 365m, In 1999/2000, pounds 390m is pencilled in. That gives forward earnings multiples of 13 falling to 12.

On the face of it that looks reasonable value given the sharp fall in the share price since April's high of 1130p, After all, Whitbread is still going to be here long after this consumer slowdown is well and truly forgotten.

But analysts are also starting to look hard at the recent acquisitions. Pelican, which runs the Cafe Rouge chain, has proved a disappointment.

David Lloyd Leisure has yet to prove itself and although the Marriott and Travel Inn hotels are going well, pouring in cash at what could be the peak of the cycle must be a risk.

That leaves everything dependent on the core brewing, pubs and restaurant chains.

With no sign of a consumer revival in sight, the risks for the shares, down 30p to 785p on the day, still look on the downside. Sell.