Whitbread has seen expressions of interest for the majority of its 126 sites currently on the market, with progress “bang on” target to exit the restaurants.
Speaking on a Q1 FY25 earnings call yesterday (18 June), CEO Dominic Paul updated on the group’s Accelerating Growth plan to optimise its F&B estate. Announced in April this year, the plan will see the Beefeater, Brewers Fayre, and Table Table operator exit 126 restaurants and convert 112 to hotel rooms.
“I would describe our progress on Accelerating Growth as bang on to where we would expect and wanted to be at this stage,” Paul said. “There are 126 sites that we are now actively marketing. We’ve actually had expressions of interest in the majority of the sites.
“Obviously, these things take time. We’ve factored that into our planning. And I would say we are exactly where we would expect and want to be at this stage.”
While making the announcement in April, Whitbread confirmed it had already sold 21 sites for £28m.
“It’s a three-year program. I’m still happy that £150m is very cheap over that time period,” CFO Hemant Patel added. “Yes, we’ll be trying to pull forward and get to the lower end of expectations in terms of net inflation and higher end of expectations in terms of our efficiency program.
“Clearly, if we can get to a higher number than £150m over the next three years, we’ll be informing you of that. But at this stage, we’re not changing our cost guidance.
“We think that, in three years’ time, £150m will make a big difference to our profitability and contribute towards offsetting any inflation that we’re seeing.”
The group also updated shareholders on the current outlook, with Paul saying the Euros could provide a boost to the German market this summer.
“I think in the UK, I think there are a combination of things…there are overs and there are unders,” he said. “There’s a bit of uncertainty because of the election process. On the other hand, there’s some events going on.”
Paul further noted that both business demand and peak leisure demand remain resilient, with the business pulling “a lot of levers” at its disposal. There are structural reasons to believe Whitbread can continue outperforming its competitors, he added.
“We’ve got this new technical stack which is enabling us to really pull our commercial levers, part of the reason for the outperformance in the market. And generally, as we go into busier peak times, that is where our vertically integrated model performs the best.”
The efficiency program has seen the group review all aspects of the business. While Whitbread has always been a well-run business with “budget and value at heart,” according to Paul, the group is looking to tech to help drive efficiency in both hotel and F&B operations.
“Of course, on top of that, we’re going to have the Accelerating Growth strategy which I think will deliver a step change in our performance over the next few years.”
