Interim Results - Part 2
Whitbread PLC
31 October 2000
PART 2
Group profit and loss account
Six months to 2 September 2000
6 months to 6 months to
2.9.2000 28.8.1999 1999/2000
(restated) (restated)
-------------------------------------------------
Before Excep- Before After After
except- tional excep- excep- excep-
ional items ional ional tional
Notes items (note 3) Total items items items
£m £m £m £m £m £m
----- -------------------------------------------------
Turnover - continuing
operations
Group and share of
joint ventures 1,765.6 - 1,765.6 1,798.9 1,798.9 3,738.9
Less share of joint
ventures' turnover (360.6) - (360.6) (359.0) (359.0) (787.5)
---------------------------------------------------
Group turnover 2 1,405.0 - 1,405.0 1,439.9 1,439.9 2,951.4
===================================================
Group operating profit -
continuing operations 219.4 (3.3) 216.1 204.9 197.3 345.2
Share of operating
profit in:
Joint ventures 3.0 (0.9) 2.1 4.4 4.4 (24.5)
Associates 9.0 - 9.0 9.5 9.5 12.3
Operating profit of the
group, joint ventures ---------------------------------------------------
and associates 2 231.4 (4.2) 227.2 218.8 211.2 333.0
Non operating items -
continuing operations
Net profit/(loss)on disposal
of fixed assets
Group excluding joint
ventures and associates - 2.3 2.3 - 1.3 5.4
Joint ventures - 0.4 0.4 - - (0.1)
Associates - 0.1 0.1 - (0.1) -
Loss on the disposal of
businesses 9 - (18.8) (18.8) - (1.6) (1.8)
Share of joint venture's
fundamental restructuring
costs - - - - (7.1) (17.4)
---------------------------------------------------
Profit before interest 231.4 (20.2) 211.2 218.8 203.7 319.1
Interest 4 (49.3) - (49.3) (25.3) (25.3) (63.1)
---------------------------------------------------
Profit before taxation 182.1 (20.2) 161.9 193.5 178.4 256.0
Taxation 5 (47.7)(19.2) (66.9) (42.5) (40.5) (75.4)
---------------------------------------------------
Profit after taxation 134.4 (39.4) 95.0 151.0 137.9 180.6
Equity minority interests (0.1) - (0.1) (0.1) (0.1) (0.2)
Preference dividends - - - (0.3) (0.3) (0.3)
---------------------------------------------------
Profit earned for ordinary
shareholders 134.3 (39.4) 94.9 150.6 137.5 180.1
Ordinary dividend (40.1) - (40.1) (38.0) (38.0) (146.5)
---------------------------------------------------
Retained profit for the
year 94.2 (39.4) 54.8 112.6 99.5 33.6
===================================================
Dividends per share
(pence)Interim 8.05 7.65 7.65
Final 21.85
Earnings per share
(pence) 6
Basic 19.11 27.79 36.36
Adjusted basic 27.87 30.52 54.22
Diluted 19.09 27.52 36.26
Adjusted diluted 27.85 30.22 54.08
Statement of total recognised gains and losses
6 months to 6 months to 1999/2000
2.9.2000 28.8.1999 (restated)
(restated)
Six months to 2 September 2000 £m £m £m
-----------------------------------------
Profit earned for ordinary
shareholders
Group excluding joint
ventures and associates 88.1 133.9 219.4
Joint ventures 1.1 (2.3) (46.6)
Associates 5.7 5.9 7.3
------------------------------------------
Group including joint
ventures and associates 94.9 137.5 180.1
Prior year adjustments for depreciation
arising from the introduction of FRS 15 - (141.3) (141.3)
Prior year adjustments for the
introduction of UITF24 (5.4) - -
Premium on cancellation of
preference stocks - (0.2) (0.2)
------------------------------------------
89.5 (4.0) 38.6
Currency translation differences
on net foreign investment (0.2) 1.4 3.0
------------------------------------------
Total gains and losses
recognised since previous
year end 89.3 (2.6) 41.6
==========================================
Cash flow statement
Six months to 2 September 2000
6 months to 6 months to
2.9.2000 28.8.1999 1999/2000
(restated) (restated)
Notes £m £m £m
------- -------------------------------------------
Cash flow from
operating activities 7 181.3 283.5 559.0
Dividends received from
joint ventures and
associates - - 1.7
Returns on investments and
servicing of finance
Interest received 0.9 6.1 7.2
Interest paid (51.0) (32.8) (86.2)
Other dividends received - 0.1 0.1
Loan interest received 0.7 1.1 1.8
Preference dividends paid (0.1) (0.4) (0.3)
-------- ------- -------
Net cash outflow from returns
on investments and servicing
of finance (49.5) (25.9) (77.4)
Taxation
UK Corporation Tax paid (25.9) (8.6) (52.8)
Capital expenditure and
financial investment
Property and plant purchased (170.5) (193.7) (372.3)
Investments purchased and
loans advanced (6.2) (5.6) (12.2)
Property and plant sold 122.8 4.1 16.9
Investments sold and loans
realised 15.4 6.3 22.9
------- ------- -------
Net cash outflow from capital
expenditure and financial
investment (38.5) (188.9) (344.7)
Acquisitions and disposals
New businesses acquired 8 (11.3) (0.1) (632.4)
Businesses sold 9 389.0 11.3 11.3
------- ------- -------
Net cash inflow/(outflow)
from acquisitions and
disposals 377.7 11.2 (621.1)
Equity dividends paid (108.5) (101.4) (139.3)
-------- ------ -------
Net cash inflow/(outflow) before
use of liquid resources
and financing 336.6 (30.1) (674.6)
Management of liquid
resources
Net movement on short
term securities and
bank deposits 10 0.1 0.7 0.2
Financing
Issue of shares 1.1 7.2 10.9
Repayment of preference
stock - (10.0) (10.0)
Net movement on short
term bank borrowings 10 (19.6) 21.5 2.0
Loan capital issued 10 310.0 62.1 1,070.2
Loan capital repaid 10 (651.4) (10.2) (368.3)
------- ------ ------
Net cash inflow/(outflow)
from financing (359.9) 70.6 704.8
------ ------ ------
Increase/(decrease)
in cash 10 (23.2) 41.2 30.4
====== ====== ======
Balance sheet
-------------
2 September 2000
----------------
Notes 2.9.2000 28.8.1999 4.3.2000
(restated) (restated)
£m £m £m
--------------------------------------------
Fixed assets
Intangible assets 157.9 8.3 157.7
Tangible assets 4,032.0 3,613.5 4,254.3
Investments
In joint ventures
Share of gross assets 236.3 292.9 235.3
Share of gross liabilities (120.1) (124.2) (108.6)
-------- ------- -------
116.2 168.7 126.7
In associates 55.8 50.2 50.0
Other investments 2.9 25.4 25.2
-------- -------- --------
4,364.8 3,866.1 4,613.9
-------- -------- --------
Current assets and liabilities
Stocks 32.8 67.3 64.9
Debtors 242.8 260.6 345.6
Cash at bank and in hand 160.6 69.3 123.1
-------- ------- -------
436.2 397.2 533.6
Creditors - amounts falling due within
one year (781.5) (807.1) (1,453.4)
-------- -------- --------
Net current liabilities (345.3) (409.9) (919.8)
-------- -------- --------
Total assets less current liabilities 4,019.5 3,456.2 3,694.1
Creditors - amounts falling due after
more than one year
Loan capital (1,310.2) (841.8) (1,120.2)
Provisions for liabilities and charges (35.8) (14.7) (31.9)
-------- -------- --------
2,673.5 2,599.7 2,542.0
======== ======== ========
Capital and reserves
Called up share capital 124.4 124.0 124.2
Share premium account 201.8 193.0 196.6
Revaluation reserve 622.2 668.5 669.1
Other reserves - non distributable (13.7) 24.6 (20.5)
Profit and loss account 1,733.4 1,587.4 1,567.3
-------- ------- --------
Equity shareholders' funds 11 2,668.1 2,597.5 2,536.7
Equity minority interests 2.3 2.2 2.2
Non-equity minority interests 3.1 - 3.1
-------- ------- --------
2,673.5 2,599.7 2,542.0
======== ======= ========
Notes to the accounts
---------------------
1. Basis of preparation of accounts
The interim accounts, which were approved by the board on 30 October 2000 and
are abridged, have been prepared on the basis of the accounting policies set
out in the 1999/2000 group accounts. The tax charge on profit before
exceptional items for the interim period has been calculated by applying the
forecast effective tax rate for the full year.
The balance sheet as at 4 March 2000 and the profit and loss account and cash
flow statement for the year ended on that date are extracts from the statutory
accounts which have been delivered to the Registrar of Companies. The
auditors' report on the statutory accounts was unqualified and did not contain
a statement under section 237 of the Companies Act 1985.
Abstract number 24 of the Urgent Issues Task Force, Accounting for start-up
costs, (UITF 24) requires that start-up costs should be written off as
incurred, instead of being amortised over a short period after the opening of
an outlet. UITF 24 has been implemented and it's effect on the balance sheet
can be seen in note 11. The effect on the segmental analysis and operating
profit is disclosed below.
The 1999/2000 accounts complied with the requirements of FRS 15 (Tangible
Fixed Assets) and FRS 16 (Current Tax), neither of which were implemented in
the interim accounts for that year. The comparative amounts for the six months
to 28 August 1999 have therefore been restated to comply with the new
standards. The effect of the changes caused by FRS 15 and FRS 16 are disclosed
below.
6 months to 2.9.2000 6 months to 28.8.1999
------------------------- ------------------------
Impact of FRS 15 and UITF 24
on operating profit
FRS 15 UITF 24 Total FRS 15 UITF 24 Total
------- ------- ------- ------- ------- ------
Hotels (4.9) 0.5 (4.4) (2.5) 0.3 (2.2)
Restaurants (9.5) 0.1 (9.4) (8.6) 0.2 (8.4)
Sports, health and.
fitness (4.2) 0.2 (4.0) (2.7) (0.1) (2.8)
------ ------ ------ ------ ------ ------
(18.6) 0.8 (17.8) (13.8) 0.4 (13.4)
Pubs & Bars - leased (1.6) - (1.6) (1.6) - (1.6)
- managed (5.8) (0.3) (6.1) (4.9) - (4.9)
Beer - - - - - -
Other drinks (0.2) - (0.2) (0.2) - (0.2)
Central services - - - - - -
------ ------ ------ ------ ------ ------
Net increase/(decrease)
in profit (26.2) 0.5 (25.7) (20.5) 0.4 (20.1)
====== ====== ====== ====== ====== ======
Impact of FRS 15 and 2.9.2000 28.8.1999
UITF 24 on net assets FRS 15 UITF 24 Total FRS 15 UITF 24 Total
------ ------- ------- ------- ------- ------
Hotels (26.2) (3.0) (29.2) (21.3) (3.5) (24.8)
Restaurants (43.7) (0.9) (44.6) (34.2) (1.0) (35.2)
Sports, health and fitness (18.1) (0.7) (18.8) (13.9) (0.9) (14.8)
------ ------ ------ ------ ------ ------
(88.0) (4.6) (92.6) (69.4) (5.4) (74.8)
Pubs & Bars - leased (27.0) - (27.0) (25.4) - (25.4)
- managed (68.9) (0.3) (69.2) (63.1) - (63.1)
Beer - - - (3.1) - (3.1)
Other drinks (0.4) - (0.4) (0.2) - (0.2)
Central services (0.6) - (0.6) (0.6) - (0.6)
------ ------ ------ ------ ------ ------
Net increase/(decrease)
in net assets (184.9) (4.9) (189.8) (161.8) (5.4)(167.2)
====== ====== ====== ====== ====== ======
The implementation of FRS 16 has resulted in a reduction in the tax charge and
an increase in profit after tax of £nil (1999 - £0.4m).
2. Segmental analysis of turnover, profit and net assets
6 months to 2 September 2000
Operating Net
Turnover EBITDA profit Assets
***
£m £m £m £m
-------- -------- -------- --------
By business segment
Hotels 218.6 65.1 46.0 1,227.0
Restaurants 563.0 93.0 65.7 1,255.0
Sports, health and
fitness 66.6 21.9 13.1 418.6
-------- -------- -------- --------
848.2 180.0 124.8 2,900.6
Pubs and Bars - leased 74.8 38.1 36.4 387.4
- managed 266.5 65.9 51.6 781.8
Beer 288.6 20.7 12.1 0.5
Other drinks 299.5 9.1 9.1 124.0
Acquired businesses for disposal ** 16.1 2.6 2.6 9.7
-------- -------- -------- --------
Segmental turnover, operating profit
and net assets 1,793.7 316.4 236.6 4,204.0
Inter-segment turnover (see note below) (63.7)
Share of joint ventures
turnover (360.6)
Central services 35.6 (2.1) (5.2) (151.5)
Exceptional items (note 3) (4.2) (4.2)
-------- -------- -------- --------
1,405.0 310.1 227.2 4,052.5
======== ======== ======== ========
By geographical segment
United Kingdom 1,371.5 307.5 226.3 4,033.1
Rest of the world 33.5 2.6 0.9 19.4
-------- -------- -------- --------
1,405.0 310.1 227.2 4,052.5
======== ======== ======== ========
2. Segmental analysis of turnover, profit and net assets (continued)
6 months to 28 August 1999
Operating Net
Turnover EBITDA profit Assets
***
£m £m £m £m
-------- -------- -------- --------
By business segment
Hotels 127.6 34.5 24.8 558.9
Restaurants 521.2 86.6 60.7 1,181.9
Sports, health and
fitness 46.0 16.3 10.4 295.2
-------- -------- -------- --------
694.8 137.4 95.9 2,036.0
Pubs and Bars - leased 73.1 35.8 34.0 387.0
- managed 256.7 65.2 52.1 767.0
Beer 559.2 47.5 30.7 309.2
Other drinks 302.3 13.3 12.9 182.1
-------- -------- -------- --------
Segmental turnover, operating profit
and net assets 1,886.1 299.2 225.6 3,681.3
Inter-segment turnover (see note below) (120.5)
Share of joint ventures
turnover (359.0)
Central services 33.3 (2.9) (6.8) (184.6)
Exceptional items (note 3) (7.6) (7.6)
-------- -------- -------- --------
1,439.9 288.7 211.2 3,496.7
======== ======== ======== ========
By geographical segment
United Kingdom 1,406.4 284.9 209.2 3,474.4
Rest of the world 33.5 3.8 2.0 22.3
-------- -------- -------- --------
1,439.9 288.7 211.2 3,496.7
======== ======== ======== ========
*** EBITDA is earnings before interest, tax, depreciation and amortisation.
** The Acquired businesses for disposal relates mainly to the pubs business
acquired with Swallow Group plc.
Inter-segment turnover is from Beer to the other segments. Central services
turnover comprises, primarily, food distribution services provided to a joint
venture. The geographical analysis of turnover and profit is by source. The
analysis of turnover by destination is not materially different. Sales
between geographical segments are not material. The results and net assets of
the majority of Travel Inns are included in the divisions that operate them,
not within Hotels. The results and net assets of the Marriott and Swallow
leisure clubs are included within Hotels. Net assets included above are total
net assets excluding net debt.
Following the sale of The Whitbread Beer Company, there remains a continuing
activity within the Beer segment. This is as a result of the terms of the
sale of The Whitbread Beer Company to Interbrew, which included arrangements
for Whitbread to retain the people and the necessary production capacity to
ensure compliance with its obligations for the remaining period of the
Heineken and Murphy licences.
The segments have been changed to reflect the new divisional structure of the
group.
In the profit and loss account, turnover of the group and share of joint
ventures includes sales from the group to joint ventures amounting to £74.6m
(1999 - £111.4m) and sales to the group from joint ventures amounting to £6.0m
(1999 - nil).
2. Segmental analysis of turnover, profit and net assets (continued)
6 months to 6 months to
2.9.2000 28.8.1999
£m £m
------------ -------------
The exceptional costs are detailed in Note 3.
The analysis is as follows:
Pubs & Bars and Restaurants* (2.9) -
Other drinks (0.9) -
Central services (0.4) (7.6)
--------- ----------
(4.2) (7.6)
========= ==========
* These costs relate to the restructuring of these businesses into the new
divisions of Pubs and Bars and Restaurants. This was a combined project and
there was no suitable basis for allocating the costs to individual divisions.
3. Exceptional items 6 months to 6 months to
2.9.2000 28.8.1999 1999/2000
----------------------------------------
£m £m £m
Restructuring/rationalisation costs (3.3) - (14.4)
Impairment of leasehold properties - - (7.2)
Integration costs - - (15.0)
Abortive acquisition costs - (7.6) (7.7)
------ ------ ------
Group excluding joint ventures and
associates (3.3) (7.6) (44.3)
Share of joint ventures restructuring
costs (0.9) - -
Impairment of investment in First Quench - - (34.2)
------ ------ ------
Charged against operating profit (4.2) (7.6) (78.5)
Non operating items
Net profit on disposal of fixed assets
Group excluding joint ventures and
associates 2.3 1.3 5.4
Joint ventures 0.4 (0.1) (0.1)
Associates 0.1 - -
Loss on the disposal of businesses
(note 9) (18.8) (1.6) (1.8)
Share of First Quench's fundamental
restructuring costs - (7.1) (17.4)
------ ------ ------
(20.2) (15.1) (92.4)
====== ====== ======
The restructuring/rationalisation costs relate mainly to the reorganisation of
Pub Partnerships, Inns and Restaurants into the new Pubs & Bars and
Restaurants divisions. The integration costs relate to the acquisition of the
Swallow Group plc. Abortive acquisition costs relate to the lapsed Allied
Domecq Retailing offer.
4. Interest
6 months to 6 months to
2.9.2000 28.8.1999 1999/2000
----------------------------------------
£m £m £m
Interest payable 50.0 33.9 73.4
Interest receivable (1.3) (7.1) (8.8)
Interest capitalised (1.7) (3.4) (5.4)
------ ------ ------
47.0 23.4 59.2
Interest payable by:
Joint ventures 1.1 0.6 1.9
Associates 1.2 1.3 2.0
------ ------ ------
49.3 25.3 63.1
====== ====== ======
5. Taxation
6 months to 6 months to
2.9.2000 28.8.1999 1999/2000
----------------------------------------
£m £m £m
Current taxation on profits before
exceptional items
UK Corporation Tax at 30.0%
(1999 - 30.08%) 47.6 39.2 88.7
Deferred tax - - (8.0)
Overseas tax 0.4 0.1 0.4
------ ------- -------
48.0 39.3 81.1
Adjustments to earlier periods
Corporation Tax (2.8) - (4.6)
------ ------- -------
45.2 39.3 76.5
Joint ventures 0.3 1.0 1.6
Associates 2.2 2.2 3.0
------ ------ ------
47.7 42.5 81.1
Tax on exceptional items
Group 19.2 - (6.8)
Joint ventures - (2.0) 1.1
------ ------ ------
66.9 40.5 75.4
====== ====== ======
6. Earnings per share
Basic earnings per share is calculated by dividing earnings for ordinary
shareholders of £94.9m (1999 - £137.5m) by the weighted average number of
ordinary shares in issue during the year, 496.6m (1999 - 494.8m). Adjusted
basic earnings per share is calculated as follows:
Earnings (£m) Earnings per share (p)
------------------------------ ------------------------------
6 months 6 months 6 months 6 months
to to to to
2.9.2000 28.8.1999 2.9.2000 28.8.1999
(restated) 1999/2000 (restated) 1999/2000
(restated) (restated)
-------- --------- -------- --------- --------- --------
Earnings and basic
earnings per share 94.9 137.5 180.1 19.11 27.79 36.36
Earnings and basic
earnings per share
attributable to:
Goodwill amortisation 4.1 0.4 1.8 0.83 0.08 0.36
Exceptional items,
net of tax 39.4 13.1 86.7 7.93 2.65 17.50
----------------------------------------------------------
Adjusted earnings
and basic earnings
per share 138.4 151.0 268.6 27.87 30.52 54.22
==========================================================
Earnings includes a number of exceptional items. In order to demonstrate the
effect of these, together with the impact of goodwill amortisation, an
adjusted earnings per share figure is also presented. Diluted earnings per
share is the basic and adjusted basic earnings per share after allowing for
the dilutive effect of the conversion into ordinary shares of the weighted
average number of options outstanding during the period. The number of shares
used for the diluted calculation is 497.0m (1999 - 499.6m).
Notes to the accounts
7. Net cash inflow from operating activities
1999 1999/2000
2000 (restated) (restated)
£m £m £m
-----------------------------------
Group operating profit 216.1 197.3 345.2
Investment income (0.1) (0.2) (0.3)
Depreciation/amortisation 82.9 77.1 161.8
Impairment of leasehold properties - - 7.2
Movement on provisions (8.1) - 17.7
Other non cash items 2.1 2.4 17.9
(Increase)/decrease in stocks (9.4) (2.6) 3.2
Increase in debtors (171.6) (76.1) (4.0)
Increase in creditors 69.4 85.6 10.3
--------- -------- -------
Cashflow from operating activities 181.3 283.5 559.0
========= ======== =======
8. Acquisitions
Cash outflow in respect of new businesses 6 months to 6 months
acquired to 2.9.2000 to 28.8. 1999/
1999 2000
£m £m £m
--------------------------------
Cost of acquisitions - - 687.4
Deferred consideration - - (11.7)
Payments in respect of previous years' 11.3 0.1 0.1
acquisitions
Swallow dividend paid to Swallow shareholders - - 9.2
Loan stock issued as consideration - - (26.1)
Cash and overdrafts of businesses acquired - - (26.5)
--------- -------- -------
Cash outflow 11.3 0.1 632.4
========= ======== =======
9. Disposals 6 months
to 2.9.2000
£m
-----------
The following relates to the disposal of.....
The Whitbread Beer Company on the 25 May 2000
Intangible fixed assets 7.9
Tangible fixed assets 305.9
Investments 24.1
Net working capital, excluding cash and overdraft (5.3)
-------
Carrying value of net assets 332.6
-------
Gross sale proceeds 394.2
Less costs (8.9)
-------
Net sale proceeds 385.3
-------
Profit before goodwill write back 52.7
Less goodwill write back (71.5)
-------
Loss on disposal (18.8)
=======
Net sale proceeds 385.3
Accrued costs 3.7
-------
Cash inflow 389.0
=======
10. Reconciliation of net cash flow to movement in net debt
6 months to 6 months to 1999/
2.9.2000 28.8.1999 2000
£m £m £m
------------------------------------
Increase/(decrease) in cash in the
period (23.2) 41.2 30.4
Cash (inflow)/outflow from movement
in loan capital 341.4 (51.9) (701.9)
Cash inflow from movement
in liquid resources (0.1) (0.7) (0.2)
Cash (inflow)/outflow from movement in short
term borrowings 19.6 (21.5) (2.0)
-------------------------------
Changes in net debt resulting from
cash flows 337.7 (32.9) (673.7)
Loan capital issued in connection with
acquisitions - - (26.1)
Loan capital acquired with acquisitions - - (172.7)
Foreign exchange movements (1.2) 2.5 4.7
Amortisation of premiums and discounts 5.7 1.7 14.9
---------------------------------
Movement in net debt in the period 342.2 (28.7) (852.9)
Opening net debt (1,721.2) (868.3) (868.3)
---------------------------------
Closing net debt (1,379.0) (897.0) (1,721.2)
=================================
Notes to the accounts
11. Shareholders' funds 2.9.2000 28.8.1999 4.3.2000
£m £m £m
--------------------------------
Movements in equity shareholders' funds
Opening equity shareholders' funds 2,536.7 2,634.5 2,634.5
Adjust for start-up costs in accordance
with UITF 24 (note 1) - (5.8) (5.8)
Adjust comparative periods for the implementation
of FRS 15 - (141.3) (141.3)
-------- -------- ------
Comparative shareholders' funds - restated 2,536.7 2,487.4 2,487.4
Profit earned for ordinary shareholders 94.9 137.5 180.1
Dividends (40.1) (38.0) (146.5)
--------------------------------
54.8 99.5 33.6
Other recognised gains and losses relating
to the period (0.2) 1.4 3.0
Goodwill on disposal 71.5 8.0 8.1
Other reserve movements - - (0.3)
Share capital issued 5.3 11.2 14.9
Cancellation of preference stock - (10.0) (10.0)
--------------------------------
Closing equity shareholders' funds 2,668.1 2,597.5 2,536.7
================================
12. Post balance sheet events
First Quench
On 16 October 2000 Whitbread PLC and Punch Group Limited completed the sale of
First Quench Retailing Limited to Carmelite Acquisitions Limited, a company
formed and financed by the Principal Finance Group of Nomura International
plc. The initial payment was approximately £225 million, of which 50% was
payable to Whitbread. The final consideration will depend on the net asset
position which will be shown by the completion accounts.
Whitbread to restructure, tighten focus and return value to shareholders
On 19 October 2000 the Board announced that it is to implement a radical
restructuring and focusing of the Whitbread Group. The effect of this
restructuring will be:
- the formation of 'Future Whitbread', comprising Whitbread's hotel,
restaurant and leisure club businesses;
- the unlocking of the full value in the 3000 pubs which comprise the Pubs and
Bars division; and
- a substantial return of value to shareholders.
Full shareholder value will be unlocked from Pubs and Bars through one or more
transactions. The Board intends that approximately 75% of the net proceeds
will be returned to shareholders whilst ensuring that Future Whitbread has the
financial flexibility to invest for organic growth. The return of value to
shareholders is expected to be substantially complete by mid-2001. In the
meantime, Whitbread may utilise its existing authority to buy back shares as
part of the mechanism for returning value to shareholders.
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