Final Results - Year Ended 4 March 2000, Part 1

Whitbread PLC
4 May 2000

PART 1
                                                                      
Whitbread PLC
Preliminary results for the year to March 4, 2000
Strong second half boosts sales and profits 

                                          1999/00       1998/9       % change
                                          (53 weeks)    (52 weeks)

Adjusted turnover                          £3495m       £3250m        +7.5%
EBITDA*                                    £572.9m      £529.1m       +8.3%
Profit before tax*                         £391.2m      £365.3m       +7.1%
Dividend per share                         29.50p       27.78p        +6.2%

*Although Whitbread has adopted FRS15 for this latest set of accounts, for
ease of comparison the headline results above have been stated on a pre-FRS15
basis and before exceptional items - see note 3 to the accounts.  Post-FRS15
profit before tax was £348.0m an increase of 5.6% on a comparable basis.      
                             

Commenting on the results, Sir Michael Angus, Chairman, said: 'For the year as
a whole, adjusted turnover grew 7.5% and pre-FRS15 profit before exceptional
items and tax was ahead by 7.1% despite an additional £12.9m charge for
pensions.  Adjusted earnings per share (post-FRS15) were up 4.7% at 53.79p.  
The results demonstrated the appeal of Whitbread's brands as consumer
confidence and spending improved in the course of the year.

'As expected, growth was stronger in the second half year than in the first. 
Second half adjusted turnover grew 12.9% (+ 2.4% in HI) and pre-FRS15 profit
before exceptional items and tax was up 12.43% (+3.0% in HI).  

'These second half trends were particularly marked in Sports, Health and
Fitness, Whitbread Hotels and Whitbread Inns where Brewers Fayre achieved 5%
like-for-like sales growth and high street branded pub sales were ahead 3.4%
on a like-for-like basis.

'In addition, the Whitbread Beer Company grew its market share to 16% and
Whitbread Pub Partnerships' profit per pub growth exceeded 20%.

'Good progress was made towards Whitbread's objective of becoming the UK's
leading leisure company.  The acquisition of Swallow Group plc  in January
will enable us to significantly increase the distribution of the Marriott
brand in the United Kingdom.   The acquired hotels are trading well and the
conversion programme is proceeding to plan.

'The addition of a further 26 hotels brought the Travel Inn network to 233
hotels.  Taken together the expansion of the Marriott and Travel Inn brands
has earned Whitbread a strong second place in the UK hotel market with over
300 hotels. Including the entire Travel Inn network, hotels represent about
24% of annual Whitbread Group operating profits.

'Whitbread is the leader in the UK health and fitness market with the David
Lloyd Leisure, Marriott and Swallow clubs.   David Lloyd Leisure added 9 new
clubs during the year and, coupled with the acquisition of Racquets &
Healthtrack in September, this meant that the total number of clubs reached 43
- doubling the number of clubs in the last two years.   

'As in the previous year, capital expenditure was focused on hotels, health
and fitness and selected segments of the restaurant and pub markets.  This
reshaping of the company by expanding in areas with growth potential and
disposing of operations with limited prospects has been taking place for
several years and is expected to continue.  

'Improved trading conditions have continued into our new financial year which
has started well.  Coupled with the action which has been taken to increase
the scale and enhance the appeal of our brands, this means we are optimistic
about our prospects.

'Sir John Banham will succeed me as Chairman of Whitbread after this year's
Annual General Meeting.  He will find a business with strong brands, an able
management team and hard working people who care about looking after their
customers.  I should like to thank everyone who has helped to make my period
as Chairman so stimulating and rewarding.'

A final dividend of 21.85 pence per share is proposed which will make the
total dividend for the year 29.50 pence.  This will be paid on the  14th July
to shareholders on the register at close of business on the 19th May 2000.

Copies of the report and accounts and / or the annual review will be sent to
shareholders by  19 May 2000 and will be available to the public on the
Whitbread Website or from Simon Barratt, Company Secretary, Whitbread PLC,
Chiswell Street, London EC1Y 4SD.

For further information please contact:

City:

David Reed              020 7615 1324
Chris Wilkins           020 7615 1066
Harriet Brodrick        020 7615 1297

Media:

David Reed              020 7615 1324
Jeremy Probert          020 7615 1445





OPERATING AND FINANCE REVIEW

SUMMARY

Four particular factors have affected the year over year comparability of this
year's results.  These factors are:

- the implementation of a new Financial Reporting Standard (FRS 15 - 'Tangible
  fixed assets').
- the merging of our Thresher off-licence business with the off-licence
  business of Allied Domecq PLC, to form First Quench Retailing Limited, and    
 the implementation of FRS 9 ('Associates and joint ventures).  Both of these
  occurred in 1998/9; 
- the results of the three yearly valuation as at March 1999 of our principal
  group pension scheme; and
- 1999/00 was a 53 week period whereas 1998/9 was a 52 week period

These factors are more fully explained in the Finance Review.  In addition,
inter-divisional pricing for the supply of beer and related services was
rebased from the beginning of 1999/00.  The impact of this change on
divisional profits is summarised in note 2 to the accounts.

Turnover, including joint ventures, increased by 10% to £3739 million.  Under
the terms of FRS 9, however, there is some double-counting of sales within
this figure.  It includes sales of the group and our share of the sales of our
joint ventures, without the elimination of sales from Whitbread to the joint
ventures and vice versa.  If these double-counted sales are eliminated,
adjusted turnover increased by 7.5%.

Profit before exceptional items and tax grew by 7.1% on a pre FRS 15 basis. 
On the reported post FRS 15 basis, profit before exceptional items and tax
grew by 1.8%.  On a comparable post FRS 15 basis, profit growth was 5.6%. 
This result was achieved after having absorbed additional pension costs of
£12.9 million, following the three yearly valuation of the pension fund.  The
profit contribution from each business is described in the Operating Review,
which follows.

Adjusted basic earnings per share, excluding exceptional items and on a
comparable post FRS 15 basis, increased by 4.7% to 53.79 pence.  The proposed
final dividend is 21.85 pence per share, a 6.6% increase on last year.  The
full year's dividend per share, interim plus final, is up by 6.2% to 29.50
pence per share.

Two significant acquisitions were completed during the year (see note 28 to
the accounts).  The Swallow Group PLC was acquired on 6 January 2000; its
hotels are being integrated into our existing hotel business.  Racquets &
Healthtrack Group Limited was acquired on 30 September 1999 and is being
integrated into our Sports, health and fitness business.

£372 million was invested in existing businesses in the year.  This sum
includes expenditure of £190 million on acquiring and developing new retail
sites.  Most of the new site expenditure was allocated to David Lloyd Leisure,
Travel Inn, Brewers Fayre, Costa and TGI Friday's.

Cash outflow before financing was £675 million.  This includes the £632
million cost of businesses acquired in the year.  After adjusting for this,
for the expenditure on acquiring and developing new sites (see above) and for
businesses sold, the underlying cash inflow was £136 million.

Like for like sales figures quoted in the Operating Review exclude sales of
retail outlets opened for the first time or disposed of during 1998/9 or
1999/00 and also the 53rd week in 1999/00.

Operating Review

Operating profit referred to in respect of each business is stated before
exceptional items and on a comparable post-FRS15 basis - see notes 1 and 4 to
the accounts and the Finance Review.


Beer
Turnover £1116.0m  +5.9%
Operating profit before transfer price adjustment £57.1m  +11% 
Operating profit after transfer price adjustment £46.5m  -9.9%

The Whitbread Beer Company once again grew operating profit ahead of sales
prior to an adjustment in the transfer price of beer and related services to
other Whitbread businesses.

Total sales volumes were up by 1.1% against a market showing a 0.3% decline. 
On-trade volumes were down 1.4% in a market down 3.0% and take-home volumes
grew 7.6% in line with the market. Total market share grew from 15.8% to 16%
during the year.

The performance of Stella Artois was outstanding.  Volumes for the year
increased 18% and passed the two million barrel mark for the first time. 
Stella Artois is now the fifth largest grocery brand in the country.  Only
Coca Cola, Nescafe, Walkers and Persil have larger sales by value.

Boddingtons sales grew 7.3% which was ahead of the ale market and gave the
brand a 4.6% share.  Heineken Cold Filtered grew 1.2%.   Source, the Beer
Company's fruit flavoured vodka drink, doubled its volume.

Further major productivity gains were made in manufacturing while in
distribution costs per ton of beer delivered fell by 5% in real terms.


Pub Partnerships
Turnover £146.9m  +1.5%
Operating profit £64.3m  +18%

Operating profit increased substantially despite the fact that there was an
average of 109 fewer pubs trading (6% of the total).  Profit per pub increased
by over 20% demonstrating that a well run leased pub estate can be a growth
business.

In addition, beer volumes outperformed an on-trade beer market down 3.0% with
a like-for-like decline for Pub Partnerships of only 0.6% in the year.  Cash
flow of £56m was generated bringing the total cash contribution from this
business to £370 million over the last five years.

Over 90% of the 1717 pubs are on 20 year leases providing the incentive for
strong, long-term working relationships between Pub Partnerships and their
lessees.  £12 million was invested in 135 capital developments.  151 lessees
were able to assign their leases and realise average premiums of £62,000.


Inns
Turnover £859.4m  +4.9%
Operating profit £173.5m  +7.2%

After a slow start to the year Whitbread Inns grew sales by 4.9% and operating
profit by 7.2%.   Average weekly sales per pub grew 6.4%.

Like-for-like sales were marginally positive after a 3.4% decline in the
previous year.  Inns focus on food and high street pubs meant Brewers Fayre
grew like-for-like sales by 2.3%, and high street brands grew 25% in total and
2.1% on a like-for-like basis.

Brewers Fayre total sales were up 8.9% as new menu developments, improvements
in service and better facilities for families with children were introduced. 
18 new Brewers Fayre's were opened bringing the total to 390. 

Hogshead  had a highly successful year in the face of intense competition on
the high street.  Drinks margins were maintained despite high levels of
competitive discounting. Average weekly sales grew by more than 10%.  16 new
Hogsheads were opened during the year bringing the total to 150.

Casa, the cafe-bar concept developed by Whitbread Inns, achieved  impressive 
sales growth from its 6 sites and a further 6 will be added in the current
year.  A number of other new concepts aimed at improving performance in
unbranded pubs produced promising results and will be expanded to full-scale
trial.  In addition, Life Cafe, a city-centre bar, restaurant and late night
concept,  was acquired in November and will be developed on further sites
during the year.


Restaurants
Turnover £733.8m  +5.9%
Operating profit £56.8m  +2.5%

Operating profit returned to growth after a negative performance in the first
half of the year. 

Beefeater  sales  were up 1.2%  and like-for-like sales for the year were down
0.7%.    In March 2000, a completely new menu was launched featuring mainly
modern British food and offering better value for money. 

Pizza Hut grew sales by 7.8% with like-for-like sales slightly positive.  This
was in a pizza market which declined 5.2% in the first half of the year and
was in only marginal growth in the second.  A new pizza product 'The Edge' was
launched in March, 2000 and has proved extremely popular.

T.G.I. Friday's sales grew 13% although like-for-like sales were negative.   
Three new stores  were opened bringing the total to 32 with a further 7 under
development.  The first Friday's American Bar opened at Heathrow shortly after
the end of the year.

Costa grew sales by 54% and like-for-like sales by 6.1%.  63 new units were
opened taking the total to 193.  In addition to its high street stores, Costa
is now expanding at high profile sites such as  the Millennium Dome, the BA
London Eye and Abbey National branches.

Pelican, which includes the Bella Pasta, Cafe Rouge, Dome and Mamma Amalfi
brands, grew sales by 1.3% although like-for-like sales for the group remained
slightly negative. The group ended the year with 220 restaurants.

Whitbread Restaurants Germany grew sales by 4.0% in total and 2.4% on a
like-for-like basis.


Hotels
Turnover £287.5m  + 29%
Operating profit £53.7m  +22% 

This was another very strong year for the Whitbread Hotel Company. Total hotel
profit, including the contribution of Travel Inn which is largely reported
through other businesses, was around £100 million.   With over 300 hotels,
Whitbread is in a strong second place to the UK market leader.

Marriott occupancy was maintained at 76% and achieved room rates rose 6%.  The
brand grew its yield premium to the market to 13.5%, 10.1% in the provinces
and 23.7% in London.  Guest satisfaction scores continued to improve as did
the brand's awareness and popularity amongst business users as measured by the
Annual UK Hotel Guest Survey.

The Swallow hotels acquired in January will significantly increase the scale
and distribution of the Marriott brand as they are converted over the next two
years.  They include hotels in Central London and gateway cities such as
Birmingham, Edinburgh, Manchester and Liverpool.   The application of Marriott
standards and systems along with access  to the world-wide reservation system
is expected to improve the yield of the acquired hotels. 

In addition to expanding its brands, the Whitbread Hotel Company continued to
focus on improving the returns from its operations.  Project Infinity is a new
initiative to driveprofit improvement from sales growth, cost efficiencies and
investment-led benefits in Marriott hotels.  Nine hotels have so far been
reviewed with promising results.

Travel Inn comparable occupancy was 86% throughout the network.  The brand
added 26 units  to bring the total to 233 with 12,415 rooms.  A further 17
hotels with 2,500 rooms are already in the pipeline for the current year. 
Travel Inn is now the UK's largest branded hotel network. A new brand identity
helped differentiate Travel Inn from its competitors and improved awareness.


Sports, health and fitness
Turnover £103.6m  + 33%
Operating profit £23.0m  +31%

David Lloyd Leisure confirmed its leadership of the UK health and fitness
market with significant growth in membership.  Because new clubs take three
years to reach maturity, growth in operating profit slightly lagged growth in
sales. 

Nine new clubs were added during the year and in September the Racquets and
Healthtrack group of six clubs was acquired.  The total number of clubs is now
43 with three under construction.  There are some 190,000 members of David
Lloyd clubs along with a  further 45,000 in the clubs associated with
Whitbread Hotels.  

The  two most important indicators of success in this business are mature
clubs  sales and memberships renewals.  Mature clubs, defined as those trading
for more than three years, increased sales by 7% and pre-FRS15 operating
profit by 12%.  Membership renewal rates continued to exceed the industry
average.


Other drinks
Turnover £656.7m  +1.4%
Operating profit £14.4m  -23%

This segment comprises Whitbread's share of the profits from its joint venture
in First Quench and its minority shareholding in Britannia Soft Drinks. 
Results from First Quench were clearly disappointing but action is being taken
to improve the performance of this business.



FINANCE REVIEW
                           
Comparability

As previewed in the Summary section, four particular factors have affected the
comparability of this year's results:

- The Financial Reporting Standard FRS 15 ('Tangible Fixed Assets') has been
  adopted early.  As explained in note 1 to the accounts, the figures for       
 1998/9 have been restated.  A recent abstract issued by the Urgent Issues      
Task Force ('Application of the transitional rules in FRS 15') limits the      
extent of the restatement.  Specifically it does not permit restatement in     
respect of the equivalent depreciation charge for buildings.  Had a full       
comparable restatement been permitted, the depreciation charge in 1998/9       
would have been £12.1 million higher and profit would have been £12.1 million  
lower. Reference to a 'comparable post FRS 15 basis' means that the            
comparable 1998/9 figure has been adjusted for this additional depreciation    
of buildings 
- The merging of our Thresher off-licence business and that of Allied Domecq
  PLC, to form First Quench Retailing Limited, and the implementation of FRS 9
  ('Associates and Joint Ventures') has distorted turnover comparisons.  Both   
 of these occurred in 1998/9 and were referred to fully in last year's annual
  report.  FRS 9 does not allow for the elimination of turnover between the
  group and its joint ventures in arriving at the headline 'Group and share of
  joint ventures' turnover.  In addition, the group turnover figure for 1998/9
  includes six months turnover of Thresher prior to its integration into First
  Quench but no turnover for First Quench
- The results of the 1999 three yearly valuation of our principal group
  pension scheme has increased the charge for pensions in 1999/00 by £12.9
  million.  This has depressed the profits of all our businesses for 1999/00
- 1999/00 was a 53 week period, whereas 1998/9 was a 52 week period.  The
  extra week will have benefited both turnover and profit in 1999/00.

Group turnover

Group turnover, i.e. excluding our share of sales by joint ventures, increased
by 0.3%.  In 1998/9 group turnover included the sales of Thresher, until its
transfer into First Quench, and subsequent sales by Whitbread to First Quench,
whereas 1999/00 includes only sales by Whitbread to First Quench.  If all
sales relating to Thresher and First Quench are excluded from both years,
comparable group turnover growth is 9.5%.

Operating profit

Reported operating profit before exceptional items grew by 4.1%.  On a
comparable post FRS 15 basis, the growth in operating profit was 7.4%.  This
result reflects both the increased pension costs and the 53rd week.  The
contribution of each business is described in the preceding Operating Review.

Earnings before exceptional items and interest, tax, depreciation and
amortisation ('EBITDA')

EBITDA, which is not impacted by the adoption of FRS 15, grew by 8.3% to £573
million.

Interest

Net interest increased by £9.9 million to £63.1 million.  This increase
reflects the higher net debt resulting from the business acquisitions
described earlier and the capital expenditure programme.  Net interest was
covered 6.5 times by operating profit before exceptional items.

Pension Fund valuation

The additional pension cost of £12.9m arose as a consequence of the normal
three yearly valuation of the pension fund.  The previous valuation took place
in 1996, before the withdrawal of the dividend tax credit for pension funds. 
The £12.9m is split between operating segments (see note 2 to the accounts) as
Beer £4.1m, Pub Partnerships £0.3m, Inns £3.8m, Restaurants £1.8m, Hotels
£1.5m and Central Services £1.4m.

Exceptional items

Exceptional costs of £78.5 million were charged against operating profit, of
which £46.8 million represents asset write-downs.  There were also exceptional
non-operating items that totalled a net amount of £13.9 million.  The total 
exceptional charge of £92.4 million is analysed in note 3 to the accounts.

With regard to the restructuring costs, only those which are permissible under
FRS 12 ('Provisions and Contingencies') have been provided for in 1999/00. 
There will be further restructuring costs which fall into 2000/1 and which
will be accounted for as an exceptional item in that year.

Reorganisation

The restructuring of the pubs and restaurants businesses results in the
formation of two new divisions - Pubs & Bars and Restaurants.  The pro forma
1999/00 segmental profits for these two new divisions are estimated as £174m
and £121m respectively.  

Taxation

The taxation charge for the year was £75.4 million.  The effective rate of tax
on profit before exceptional items was 23.3% compared with 22.3% for the
previous year (restated for FRS 15),  or 23.1% for the previous year on a
comparable post FRS 15 basis.  The effective rate of tax continues to be lower
than the standard UK corporate tax rate of 30%, principally because of the
recent levels of capital expenditure.  The resulting tax relief has exceeded
the charge for depreciation.

Second half year as a discrete period

The second half benefited from an extra week's trading (the 53rd week).  It
also benefited from improved sales trends as described earlier.

The early adoption of FRS 15 for the full year's accounts has created a
mismatch between the profits of the two half years.  The full year effect of
FRS 15 was £43.2 million.  The pro forma effect of FRS 15 on the first half
year's profit is estimated as £20m.

Cash flow

Cash inflow from operating activities increased by £40 million to £559
million, reflecting the growth in underlying profitability.

Net cash outflow from 'capital expenditure and financial investment', at £345
million was slightly ahead of last year.  Capital expenditure was £71 million
lower, while proceeds from the disposal of property and plant was £100 million
lower at £17 million.  Disposals in 1998/9 were significantly boosted by sales
of some large blocks of pubs and pub/restaurants.

The cash outflow before financing was £675 million.  In order to assess the
underlying cash flow performance, it is necessary to eliminate the cash flows
relating to the acquisition and disposal of businesses (net outflow of £621
million) and the investment in new retail outlets (outflow of £190 million
included within 'property and plant purchased').  Underlying cash inflow,
after making these adjustments, was £136 million.  The equivalent figure for
1998/9 was £179 million.


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