Whitbread to put emphasis on food
This year Whitbread will lift its capital spending by 50 per cent to pounds 300m. Most of the money will be spent on Brewers Fayre, Beefeater, Pizza Hut and Travel Inn - businesses that Sir Michael Angus, chairman, said had 'proven their ability to grow profits'.
Whitbread's managed pubs, with their increasing bias towards food, and its restaurants and hotels provided the momentum behind a 5.8 per cent increase in pre- tax profits to pounds 231.7m in the year to 26 February, excluding non-operating items such as losses on disposals. The dividend is up 5.9 per cent to 18.8p with a final of 13.8p.
Interest charges also fell sharply from pounds 42.2m to pounds 25.1m, mainly reflecting the receipt of a net pounds 285m from the buyout of Whitbread Investment Trust and sale of shares in regional brewers. Profits were lowered by an extra pounds 15m charge to top up Whitbread's pension fund.
Excluding the pension charge, profits from Whitbread Inns, the managed pub operation, increased by 10 per cent to pounds 95.6m. Although beer volume per pub was static, higher margin cash sales rose by 20 per cent and food 15 per cent.
Restaurant and leisure profits led by Beefeater, rose by 18.4 per cent to pounds 57.9m despite the loss of profits - put at 'a few millions' by Alan Perelman, finance director - at Threshers Drinkstores because of imports from Europe.
Brewing profits edged ahead by 3.7 per cent to pounds 73m as a strong performance by premium brands and cost savings offset a 4 per cent drop in beer volume. Profit in Whitbread's leased estate fell by 12.3 per cent to pounds 50.1m, reflecting the sale of 400 pubs.
Bottom Line, page 26
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