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Whitbread is the UK’s largest hospitality company. It started life in the 18th century as a brewer but has redefined itself in the current century by focusing on three sectors in which it claims market leadership – budget hotels, high street and pub restaurants, and health and fitness clubs.

Its hotel division now comprises Premier Travel Inn, which also operates its standalone Touchstone conference centres.

Its restaurant division is split into pub-restaurants (Beefeater and Brewers Fayre, with more than one-third co-sited with Premier Travel Inns) and high street restaurants (Costa Coffee, TGI Friday’s, and Pizza Hut).

Whitbread also operates the David Lloyd Leisure health and fitness clubs.

The group serves more than 10 million customers a month and claims half the UK population has visited one of its establishments.

Timeline

• 1742: Samuel Whitbread starts brewing beer in London. The group grows into a national brand by 1868 and moves its operations to Chiswell Street in 1750 but ceases brewing there in 1976. The venue becomes a conference and banqueting centre but is sold in 2005.
• 1889: Whitbread becomes a limited company
• 1948: Whitbread becomes a public company under Colonel Bill Whitbread.
• 1962: The group acquires the Thresher off-licence business.
• 1974: The first Beefeater restaurant opens.
• 1979: Whitbread opens its first Brewers Fayre pub-restaurant.
• 1982: Whitbread opens Pizza Hut in a joint venture with PepsiCo of the USA. PepsiCo spins off its restaurants in 1997 to create Tricon Global Restaurants which is renamed Yum! Brands in 2002.
• 1985: Whitbread signs a franchise agreement with Carlson Hospitality of the USA to develop the TGI Friday’s restaurant brand in the UK.
• 1987: Whitbread opens its first Travel Inn.
• 1990: The group buys Berni Inns from Grand Metropolitan.
• 1994: The group buys the Maredo chain of Argentinean steakhouses in Germany.
• 1995: Whitbread buys Scott’s Hotels for £183m from its Canadian parent, gaining the UK Marriott franchise along with 12 Marriott and four Courtyard by Marriott hotels to become the UK’s third largest hotel group after Forte and Thistle/Mount Charlotte. It rebrands much of its estate under the Marriott flag and its Country Club Hotels and Resorts division is renamed Whitbread Hotel Company.The group also buys David Lloyd Leisure (for £201m), Curzons fitness clubs and CB Costa Brothers (paying £12.3m for 41 owned and franchised coffee shops). Disposals include 137 pubs to Pubmaster for £12.3m and 70 freeholds to United Breweries for £6.9m.
• 1996: Whitbread buys two restaurant groups - the Pelican Group for £133m in June and BrightReasons for £46m in November. The deal nets it almost 300 restaurants.
• 1997: Whitbread sells its three-star unbranded hotels and other non-core businesses.
• 1999: The group buys Racquets and the Healthtrack Group
• January 2000: Whitbread buys the Swallow Group for £578m in a deal that includes 38 Swallow hotels and 183 pubs which its sells in June to Enterprise Inns for £118m.
• May 2000: The group buys Allied Domecq Retailing in a deal that brings it around 3,500 pubs and restaurants, a 50% stake in the First Quench off-licence business and a 23.75% stake in Britannia Soft Drinks. To comply with monopoly regulations, it sells the Whitbread Beer Company to Belgian firm Interbrew for £400m and also offloads the off-licence business.
• March 2001: Whitbread sells its 3,000-strong pubs and bars division for £1.6b to Morgan Grenfell. They become the Laurel Pub Company.
• May 2002: The group sells its 153 Pelican and BrightReasons restaurants to a management buy-in team, Tragus Holdings, for £25m. They include the Café Rouge and Bella Pasta brands and a brasserie division. Whitbread also sells its 12 Curzons fitness clubs to Fitness First for £6m.
• July 2003: Whitbread sells 13 three-star Swallow hotels and the Swallow brand name for £57m to the London Inn Group. The remaining Swallow properties are rebranded as Marriott or Renaissance hotels. During the year it also buys Cannons Health and Fitness in the Netherlands.
• July 2004: Whitbread buys the 132-strong Premier Lodge chain of budget hotels for £505m from the Spirit Group to become the UK’s largest hotel operator. The deal includes 19 adjoining pub-restaurants, which are rebranded as Brewers Fayres. The entire hotel estate is rebranded Premier Travel by February 2005.
• November 2004: Whitbread exits the three-star hotel market with the sale of its remaining11 Courtyard by Marriott hotels for £79m to a partnership of property investment firm Chiltern Mondiale and Kew Green Hotels.
• January 2005: Pub-restaurants are consolidated under a single manager. The 144 under-performing Brewsters are gradually converted into Brewers Fayres and 31 Out & Out restaurants are sold or converted into Beefeaters.
• March 2005: Whitbread puts its 46 franchised Marriott hotels into a joint venture with Marriott, which takes over their management. Whitbread intends to sell the hotels within two years for at least £1b and receives an initial payment of £710m at this point.
• April 2005: Whitbread sells the 58-strong German chain of Maredo’s steakhouses (which now includes four Austrian outlets) for £24.8m.
• September 2005: Whitbread sells its historic conferencing and banqueting site, the Brewery in London's Chiswell Street, for £55m to the Earls Court and Olympia group.
• December 2005: Whitbread raises £117m from the sale of its 23.5% stake in the Britvic soft drinks company, which floats on the London Stock Exchange.
• March 2006: Whitbread buys seven Holiday Inns from property consortium LRG for £34.5m which will be converted to Premier Travel Inns.
• April 2006: Whitbread receives £237m from the £951.4m sale of 46 Marriott hotels to the Royal Bank of Scotland. The hotels were placed in a joint venture with Marriott in 2005 as a prelude to exiting the four-star hotel market and relinquishing itsUK franchise for the Marriott brand. Whitbread also announces a joint venture with the Emirates Group to take Premier Travel Inn to the Middle East, initially at three sites in Dubai.
• June 2006: Costa Coffee signals its intention to move into China via a joint venture agreement with the Yueda Group, a state-owned enterprise. The plan is to open more than 300 coffee shops in China over the next few years.

Financial snapshot

Full Year

Turnover: £1.58b (2004-5: £1.45b)
Pre-tax profit: £181.1m (2004-5: £160.1m)

Half Year*

Turnover: £809.1m (2004: £713.6m)
Pre-tax profit: £102.9m (2004: £92.7m)
* the figures cover continuing operations

Financial year end: 2 March 2006
Half year end: 1 September 2005

Operating data

Total number of employees: more than 50,000

Financial figures below are from the year to 2 March 2006:

Premier Travel Inn
Turnover: £407.8m (+27.7%)
Like-for-like sales grew by 7%
Operating profit: £139.2m (+37.8%)

Occupancy: 78.4% (like-for-like: 80.8%)
Revenue per available room: £35.95 (+4.8%)
Profit per room: £4,982

Number of hotels: 466
Number of bedrooms: more than 30,000
Number of conference venues: nine Touchbase centres

Pub-restaurants (Brewers Fayre, Beefeater)
Turnover: £605m (+1.4%)
Like-for-like sales fell by 1.8%
Operating profit: £60.7m (-22.7%)

Total number of outlets: around 629 (more than one-third co-located with Premier Travel Inns)
Number of Beefeaters: 158 (plus 28 Out & Out venues awaiting conversion)
Number of Brewers Fayre 443

High-street restaurants (Pizza Hut, Costa Coffee, TGI Friday’s)
Turnover: £235.1m (+7%)
Like-for-like sales fell by 0.3%
Operating profit for the division: £12.7m (-18.6%)
Operating profit for Costa Coffee: £13.3m (+25.5%)
* these figures do not include Pizza Hut, which is a joint venture with Yum! Brands.

Total number of outlets: 1,282
Number of Costa coffee shops: 550, including 73 franchised outlets in the UK and 121 franchised sites overseas
Number of Pizza Huts: 687, of which 150 are franchised
Number of TGI Friday's: 45

David Lloyd Leisure
Turnover: £224.6m (+2.8%)
Like-for-like sales fell by 0.6%
Operating profit: £22.7m (-41.6%)

Total number of outlets: 57 in the UK, 10 overseas (Netherlands, Belgium, Dublin, Barcelona)

Strategy

Having completed its exit from the four-star market with the sale of 46 joint-venture Marriott hotels, Whitbread plans to focus on expanding its buoyant budget hotels and coffee shop brands.

It intends to boost the number of Premier Travel Inn bedrooms from 30,000 to 45,000 and to double the number of Costa Coffee outlets to more than 1,000 venues in the UK and overseas by 2010.

Turning to the under-performing pub-restaurants, Whitbread plans to sell off its standalone Brewers Fayre and Beefeater venues, retaining the 271 sites co-located with a Premier Travel Inn and examining plans to build budget hotels alongside another 100 sites.

The group will also review the "nature and size" of its investments in the stagnant Pizza Hut and TGI Friday's high-street restaurant brands.

Source: annual results statement, 25 April 2006

Chief executive

Alan Parker

Key directors

Chairman: Anthony Habgood
Group finance director: Christopher Rogers
Managing director, Travel Inn: Patrick Dempsey
Managing director, David Lloyd Leisure: Mike Tye
Managing director, pub restaurants: Mark Phillips
Managing director, Pizza Hut (UK): to be announced
Managing director, Costa Coffee: John Derkach
Managing director, TGI Friday’s: Tim Hammond
Managing director, David Lloyd Leisure: Stewart Miller

Contact

Whitbread House
Park Street West
Luton
Bedfordshire
LU1 3BG

Tel: 01582 424 200

Website: http://www.whitbread.co.uk

Commentary

Whitbread has grown into the UK’s largest hotel operator since 1992, when its hotel division contributed a mere £2m in profits, and has also built up leading positions in restaurants and health clubs. The group has continued to transform and streamline itself since the sale of its brewing and pub interests in 2000 and 2001 while promising accelerated growth in its chosen fields.

Unable to generate acceptable returns on its Marriott properties, the group has exited both the three-star and the four-star hotel market in order to focus on its star-performing budget hotel business.

By April 2006, the group had raised around £1.3b from the sale of the Marriott hotels, its stake in Britvic soft drinks and The Brewery conference centre in London.

It intends to boost the number of Premier Travel Inn bedrooms from 30,000 in 2006 to 45,000 by 2010 and to expand the brand to the Middle East. 

Having sold or converted its underperforming Brewsters and Out & Out pub-restaurants, Whitbread has elected to keep only those pub-restaurants that are co-located with a Premier Travel Inn.

The high-street restaurant division is also being transformed. Whitbread sold its Maredo chain in Germany in 2005 and is now reveiwing its investments in the Pizza Hut and TGI Friday's brands.

The successful Costa Coffee chain, which is the UK’s second largest coffee shop brand, has switched focus from quantity to quality through partnerships with such companies as BAA, Virgin Atlantic, Waitrose, Waterstone’s,Ottakar’s, P&O and Esso. It has also spread overseas through franchising to the Middle East, Dublin, Cyprus, India and Pakistan and Whitbread intends to grow the brand to 1,000 outlets here and abroad by 2010.