Whitbread unveils sell-offs and savings

Pubs and hotels group Whitbread today unveiled an £800 million asset disposal programme and plans to quit its London head office.

Pubs and hotels group Whitbread today unveiled an £800 million asset disposal programme and plans to quit its London head office.

The group said it was planning to sell and "manage-back" 12 of its Marriott hotels next year and to dispose of its German hotel and restaurants.

It said it would relocate its head office to Bedfordshire after spending 254 years in the City of London.

The group added that it was planning to save £30 million a year through increased efficiencies and to return surplus cash to shareholders, although further details were unavailable.

Chief executive Alan Parker said his recent review of the business had concluded that while major structural upheaval was not needed, the changes proposed would build on the strength and success of the business.

"Whitbread will have a new approach to growth, a greater focus on return on capital and a clear commitment to returning surplus cash to shareholders," he said.

As well as the sale and manage-back of 12 Marriott hotels next year, Whitbread said it would do a further sale and manage-back of other Marriott hotels in 2006/7.

The group said it would sell its three-star Courtyard by Marriott hotel chain and was in the final stages of negotiating the sale, with an announcement due to be made shortly.

It added that it was selling its historic former headquarters in Chiswell Street in London, which is on the site of the original Whitbread brewery founded in 1742.

The group had planned to convert the building into a Marriott hotel, but later decided against that plan. It will retain management of the conference and banqueting centre on the site.

Whitbread also announced that it was doubling its capital spending from about £75 million this year to some £150 million-£200 million in each of the next four years.

It plans to expand its Premier Travel Inn business, which it is integrating with the recently-acquired Premier Lodge chain, by 1,500 rooms a year.

Whitbread acquired Premier's 132 hotels and a further nine proposed sites in July from Burton-on-Trent-based Spirit Group.

The enlarged operation, to be named Premier Travel Inn, is the biggest budget hotel business in the UK with 29,141 rooms in 461 locations.

It will integrate its Brewsters pub restaurant chain into its Brewers Fayre business and convert its Out & Out sites to the Beefeater format or sell them.

The group would continue to expand its David Lloyd Leisure sports club chain in the UK and Europe and launch a significant expansion of its Costa Coffee business through new sites and international franchises.

The announcements came as Whitbread posted a 9% rise in profits before tax and exceptional items to £147.4 million today.

Chairman Sir John Banham said: "These good results were achieved in mixed market conditions.

"Although forecasts for the UK economy and consumer spending are mixed, the board remains confident about the group's prospects."