Whitbread fortunes leave brewing behind

WHITBREAD, a brewer for 252 years, now earns more from pub-restaurants and branded restaurants such as Beefeater and TGI Friday's than it does from brewing.

In its financial year to 26 February 1994, operating profits for the Whitbread Inns division were, after stripping out a pension charge, up 10% to £95.6m from £86.8m and those at the Restaurants & Leisure division, which includes Country Club Hotels and Travel Inns, increased by 18.4% to £57.9m from £48.9m.

While its food-based retail businesses such as Beefeater, Brewers Fayre, Pizza Hut, and TGI all recorded further substantial growth in sales, the hotels group again struggled through a turbulent year.

However restructuring and rationalisation called for by hotels managing director Alan Parker are beginning to pay off. During the year 27 hotels were sold and labour costs were brought down by 5% as a percentage of turnover.

Occupancy at the hotels division, excluding Travel Inns, grew by two points to 56% and the average achieved room rate was up £1 to £45. Sales for the year grew from £62m to £64m.

At a Whitbread presentation at the Brewery in London earlier this week, Mr Parker told Caterer that his group had recorded a "commendable performance" despite the sale of 27 hotels.

He pointed out that while London hoteliers enjoyed a strong demand from tourism business, it was not happening in the provinces. "It's very competitive. Business is there but you have to be sensitively priced and deliver the right product," he said.

Conference and meeting bookings for autumn and winter 1994 at the Country Club Hotels Group, which now numbers 29 hotels, are strong and Mr Parker expected "a bounce back" later this year.

Overall, Whitbread reported pre-tax profits, excluding profits from the sale of shareholdings in other brewers during the year, of £231.7m, an increase of 5.8% from £219m in the previous year.

Total turnover from continuing operations was £2,360m. This stemmed from growth in Whitbread Inns and Restaurants, a decline in beer and a 13% decrease in Whitbread Pub Partnerships, which had on average 400 fewer pubs trading.

One of Whitbread's corporate objectives is to become the UK's "pre-eminent retailer in drinks and eating out". To this end, Whitbread is planning to sell around 800 leased pubs and expand its branded pubs and restaurants.