Leading sector analyst Geoff Collyer has called for Whitbread to provide the market with greater disclosure on the performance of its Restaurants business if it’s to be perceived as competing with its rivals.
Collyer, of Deutsche Bank, pointed to a series of positive performances in the division under new managing director Paul Flaum. For example, Buffet Place: the first 24 sites went live last year, with a further 50 due this year, while breakfast increased 23% in H2.
“With an increasing amount of detail coming out now that the Restaurants division has a clearer focus and drive, what Whitbread needs to do is to improve the reporting metrics that can be more directly compared to its peer group.”
He pointed out that Whitbread currently discloses just movement in estate numbers, total and like-for-like sales, covers growth and proportion of revenues.
“To the collection above we would add the following metrics to our disclosure wish-list. (i) Spend per head - though Whitbread is one of the few groups that can track that accurately – most just track food spend, not the total bill from the customers that are eating and drinking.
“(ii) Outlet profit – we made a stab at it in our table above, but Whitbread could just give it out; only JDW give the data to work it out. (iii) Labour costs’, cost of sales, consumables, occupancy, (rent and rates, though more likely just rates), and depreciation would also help.
“Before we get protests from Whitbread about such a long wish-list, we would point out that the group gave this last package of disclosures for Costa last year, and they are all at the unit level. And Spirit Pub Co has just published AWT (average weekly turnover), food mix and covers per week for each of its branded pub formats.
“If Whitbread is to aspire to ‘best in class’ status, it needs to be able to provide the market with the tools to assess how well it travelling along that path. The top line performance vs. the peer group is trackable, but the profits are not as the moment, and haven’t been for four years.
“With increasing focus on the Restaurant performance, improving disclosure is something that the group should now concentrate upon, otherwise the market is liable to come to the conclusion that one-quarter of the revenues are either performing below expectations – possibly unfair, although now improving – or are not part of the way forward for the group.”
