Whitbread is to double its capital expenditure on acquiring new sites and dispose of £800m of non-core and low-returning assets.
The strategy, which includes the sale and manage-back of up to 25 Marriott hotels, was announced by chief executive Alan Parker last week as the company revealed pre-tax profits up 9.4% to £147.4m for the six months to 2 September.
Parker said the group aimed to increase capital expenditure from £78m a year to more than £150m by acquiring new sites for its Brewers Fayre estate, increasing the number of Costa coffee outlets in the UK from 300 to 500, and growing its Premier Travel Inn business to 35,000 rooms by 2008.
However, leisure analyst Mark Reed of Tether & Greenwood said the group's strategy of doubling its capital expenditure on expansion when others were reducing theirs was "questionable".
The group had also "mismanaged City expectations", Reed said, by dressing up its strategy, much of which had been announced previously.
"This isn't the right time for a grandiose review of the business, when what they really need to do is batten down the hatches," Reed added.
For the chop
- Previously announced sale of 11 Courtyard by Marriott hotels (£80m).
- Former headquarters and brewery site on Chiswell Street in the City (£20m).
- The group has begun a sell-off of its £1.1b Marriott property portfolio, starting with a sale and manage-back of a quarter of its sites with a further quarter to follow in 12 months (£500m).
- The poorly performing Brewsters pub-restaurant brand, targeted at the family market, is to be scrapped and the sites rebranded as Brewers Fayre.
- Out and Out pub-restaurant brand to be scrapped, with the worst-performing sites sold off and others converted into Beefeaters (£30m).
- German hotel and restaurant operation (£30m) to be axed.
- Planned flotation of Britvic stake (£200m).
- The company will move its head office from London to Luton.