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Whitbread (LON:WTB) report: company review and analysis

Whitbread Group PLC is a hospitality company based in UK and it primarily specializes in the management of many popular brands of restaurant, hotels and coffee houses. Some of the reputed names that the company manages in the above field are Costa Coffee, Table Table, Brewers, Fayne, Beefeater, Taybams and Premier Inn. The headquarters of the company is located in Dunstable, Bedfordshire and it was founded by Samuel Whitbread and Thomas Shewell in the year 1799. The company was originally founded as a brewery and after dealing in the above trade for a very long time, it decided to sell all its breweries and related interests in the year 2001 to Interbrew. Currently the group has employee strength of more than 34,000 people and it also serves around 10 million customers each month across 2000 outlets in the UK. Whitbread Group PLC is listed on the London Stock Exchange and it is currently an element of the FTSE 100 Index.

Issued in a latest interim managerial statement Whitebread PL claimed that it anticipated a potent growth in its profits in the present financial fiscal. The biggest hotel and restaurant group in the UK witnessed the opening of sales at Premier Inn Hotels for over a year increase by 8.7 percent in the third quarter of the fiscal year. Likewise sales at Costa Coffee outlets that were open for over a year grow up to 11 per cent. The group is also churning out stringent plans for expanding all across Europe and it claims to have 55,000 Premier Inn rooms in the nation in the final phase of 2013/2014. Though there is uncertainty from the economic perspective, the positive and consistent impetus of the management of the company has earned it the confidence of profit growths that are parallel and strong with the expectations of the market.

Cons:

- An economic decline would create an impact on the hotel industry though its effects would be potentially less than other rival companies.
- A change in the post of the chief executive in November may result in the extent of some forthcoming uncertainty.
- The recent weather condition issues have not aided the pub and the restaurant business of Whitbread.

Pros:

- Though there has been tough comparatives and apprehension that growth rates may not be maintained in the first half of the fiscal, Whitbread has successfully witnessed a positive and impressive growth in the second phase with a share price that adds up to 35 percent over the previous year.
- The group has a potent balance sheet that has been underpinned with a freehold asset base that is currently estimated to have a book value of ?1.7 billion.
- There is a persistent bid speculation with regard to the merger and acquisition activities in the sub sections of the restaurant business sector.