Whitbread

Despite lacking strong comparatives, Whitbread has started the year well in both core divisions. Analysts are comfortable with the underlying UK economic recovery and point to major drivers this autumn, such as the Rugby World Cup, which imply full room occupancy. Whitbread’s strategic positioning and strong IT investment in hotel bookings leave it looking strongly placed in the medium term. Costa’s coffee chain expansion has ample to grow, as does the overall business model internationally. Costa Express continued to expand rapidly and plans to double its machine-based estate by 2020. There may have been some expectation that the failure to promote Costa’s CEO to the new Group CEO implied an impending split off for the business. This may account for the slight weakness upon these results but there is confidence in the management succession here at Whitbread and, as the Chairman, Richard Baker recently remarked, the new CEO’s job is to deliver but not re-write strategy. The next scheduled news is due out in early September, just before the Rugby World Cup and hopefully implying a strong Q3.