Whitbread assets plunge: Revaluation to send property values down by 450m pounds

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The Independent Online
MORE than pounds 450m is set to be wiped off property values at Whitbread, the UK's fourth- largest brewing company.

The figure equates to pounds 1 off the net asset value of the ordinary shares. Net assets were last stated as 562p. The 'A' shares stood at 464p last night.

An extensive four-month revaluation has just been completed by six teams of chartered surveyors. The teams comprised 24 Whitbread property surveyors and independent assessments were made by Gerald Eve, the chartered surveyors.

Whitbread has six breweries, 5,200 pubs, 1,600 off-licences, 60 offices, depots, and warehouses and more than 1,000 unlicensed properties such as cottages, shops and agricultural land.

The company announced it was undertaking the revaluation last November, when it reported a marginal increase in half-year profits before tax to pounds 143m.

Whitbread's properties were last valued in 1989, when prices for pubs and retail outlets were still rising in most of the country. The company now intends to revalue one-third of the estate annually.

In the latest issue of the company's in-house newspaper, Peter Brown, Whitbread Property's estate director, said: 'It is undeniable that in the last four years properties have devalued.

'But it is important this work is carried out and the company's assets are correctly stated in its books.

'If we didn't revalue, the City would be sceptical about the values stated in our accounts.' While the City was aware of the revaluation, one industry observer said yesterday that many analysts had probably forgotten about it.

Whitbread declined to comment on the size of the write-off, although a spokesman said any revaluation would be comfortably absorbed by the balance sheet. The revaulation reserve in the 1991/2 accounts was stated as pounds 990m, and tangible assets were pounds 3bn.

Write-downs of property values by competitors have started at 10 per cent of assets, but more recently have been about 15 per cent.

Despite falling property values, the company also disclosed that it intends to increase the size of its Travel Inn hotel estate from 36 to 50 units in a year.

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