"Flying start" for new-look Whitbread

Whitbread chairman John Banham claimed today that the restructured company had got off to a "flying start" as it reported a 23% rise in operating profits in its hotels, restaurants and sports centres during the year to 3 March. Over the last 12 months, the company has sold off its brewing interests, its off-licence chain First Quench, and its 3,000-strong pubs and bars division. It is now concentrating on its Travel Inn and Marriott hotels, its more profitable restaurant chains, and its David Lloyd fitness centres. Turnover for the group as a whole during the year dropped by 17% to £3.1b and pre-tax profits by 4% to £335m, before exceptional items. But in the new core businesses, turnover rose by 17% to £1.7b and operating profit before exceptionals was up by 22% to £241m. Earnings before interest, tax, depreciation and amortisation (EBITDA) were up by 23% to £354m. Last year, Whitbread set its chains the target of 5% like-for-like sales growth every year. Banham said Marriott, Travel Inn, Costa and David Lloyd had exceeded that target. Brewers Fayre and Pizza Hut were "close to it". The first 10 Swallow hotels have been converted to Marriotts, with seven more due to switch during the spring. Five more will follow in the autumn. Travel Inn opened 29 new hotels during the year and now has 262 hotels and 14,186 bedrooms. Banham said the new financial year had started well, with all divisions of the new-look Whitbread showing like-for-like sales growth. But Marriott had been affected by a fall in the number of US visitors to London. Hotels: In the hotels division, sales increased by 53% to £440m. Like-for-like sales were up by 9% and operating profit by 66% to £90m. Occupancy at Marriott was 75% and achieved room rates rose by 8% to £83.13. Revenue per available room was up by 8% to £62.35. Travel Inn occupancy was 85% and its sales were up by 19%. Whitbread now has a total of 336 hotels and 25,000 bedrooms. A further 16 hotels are under construction. Total like-for-like sales in the hotels division grew by 7%, with Marriott up by 9% and Travel Inn by 5%. Restaurants: Sales in the restaurants division were up by 5% to £1.13b. Like-for-like sales were up by 2%, and EBITDA up by 3% to £179m. Operating profit was up by 1% to £123m. The growth was largely driven by Brewers Fayre, Beefeater, and the Travel Inn hotels attached to them. Figures from Travel Inns attached to restaurants are reported through the restaurants division. Together, the three chains accounted for 91% of the Beefeater for 17%. Like-for-like sales increased by 4% at Brewers Fayre, by 2% at Beefeater and by 4% at Pizza Hut. But at Pelican (mainly Café Rouge and Bella Pasta) total sales were down by 4%, following restaurant closures, and like-for-like sales were up by just 0.5%. Like-for-like sales at TGI Friday's fell by 5%. In Whitbread's restaurants in Germany, like-for-like sales fell by 4% as a result of the BSE scare. Like-for-like sales at Costa coffee bars were up by 10%. The number of cafés increased from 192 to 253 during the year. Pubs and bars: Like-for-like sales were flat in both managed and tenanted pubs. Operating profits were down by 3% to £105m. Web linksWhitbread