Whitbread insists it's not for sale

By This Is Money
Updated: 05:02 EDT, 1 March 2006

WHITBREAD today confirmed its status as the sick man of the leisure sector as it reported another set of declining sales figures for nearly all divisions.

In its trading snapshot to 16 February, the group - under constant takeover speculation - reported sales growth from branches a year or older, known as like-for-likes, was even down at the star-performing Premier Travel Inn budget-hotels chain compared with the last update.

PTI like-for-likes were up 6.9% for the year compared with the 7.3% posted in mid-December. Meanwhile, its High Street restaurants' like-for-likes declined 3.7% compared with a 3.4% fall in December. David Lloyd Leisure centres fell 0.6% against 0.4% before.

Only pub restaurants, where a revamp of the Beefeater chain is finally paying off, showed any improvement, with the sales decline improving from 2.1% to 2%. But chief executive Alan Parker was upbeat, particularly about PTI, Costa Coffee and Beefeater, repeating his mantra that the business was not for sale.

Analysts believe Whitbread will report annual pre-tax profits of between £170m and £180m before accounting for the disposal of its stake in drinks maker Britvic for £114m and the sale of Marriott Hotels.

Chief executive Alan Parker said the firm was expecting a full-year result in line with hopes and trumpeted the prospects for growing Premier Travel Inn by converting hotels currently owned by rivals.

This week, the company opened the Hammersmith Premier Travel Inn in London after taking over a lease on a hotel from Best Western.

Lower spending on the high street continued to weigh on its chains there, but a new advertising campaign will begin on television to bring customers back to Pizza Hut including an all-day buffet priced at £3.99.

Whitbread highlighted positive trends at Costa Coffee, where like-for-like sales rose nearly 5% in the past quarter.

The company has concentrated on expanding Costa, with 140 new sites opening over the financial year, including 50 international sites.

At David Lloyd, Whitbread said a new management team was making good progress and had attracted 20% more new members in the key months of December and January at those clubs that have been open at least a year.

But bosses remained tight-lipped on potential approaches for David Lloyd or whether they were interested in Next Generation, which owns sites including the Chelsea Harbour Club.