Apr 25, 2018

Premier Inn owner Whitbread to spin off Costa Coffee

Whitbread, the hotels-to-lattes consumer group, said it will pursue a spin off of Costa Coffee, providing its shareholders with "Investments in two distinct, focused and market-leading businesses". "The board has for some time been of the view that separating Premier Inn and Costa would at the right time enhance focus and enable value to be optimised for shareholders over the long term," it said in a statement. "Given the significant progress that has been made . . . the board is confident that both Premier Inn and Costa will soon be businesses of sufficient strength, scale and capability to enable them to thrive as independent companies." Currently, Whitbread shares trade at a discount both to other budget hotel chains, such as Ibis owner Accor, and other fast-food businesses such as the UK's Greggs, he said. Pre-tax profit came in at £590m, slightly above company-compiled consensus forecasts for £583m. Same-store sales growth at Costa was 1.2 per cent, well ahead of expectations of 0.4 per cent, according to Bloomberg data.

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