Like-for-like sales at Beefeater pub/restaurants are continuing to lag, and Pizza Hut is also disappointing, Whitbread revealed when it announced interim results this morning.

While Brewers Fayre grew like-for-like sales by 3.5% with the Brewsters brand performing “exceptionally well” at 5% like-for-like growth, Beefeater's like-for-like sales were up only 1.4%.

Operating margins at Brewers Fayre rose by 0.3% points to 18.8% and half-year return on capital rose from 7.3% to 7.6%. At Beefeater operating margin grew by 1.1% points to 10.2% and operating profit was up by 12%. Return on capital also rose, by 0.7% points. The top quartile of Beefeater's units produced an annualised return on capital in excess of 18%, Whitbread said, and “further action is being taken to improve the performance of this brand.”

Whitbread said total sales in its entire pub/restaurant division were up just 1% to £302.2m for the six months to August 31, after the disposal of 31 units. However, operating profit was up 6.3% to £46.9m.

In the "retained" High Street restaurants division, which mostly means Pizza Hut, like-for-like sales were up just 0.5% because of the slow-down in London tourism, Whitbread said. However, sales were up by 5.4% to £195.6m, return on capital was also ahead and conversion improved "dramatically", with significant increases in operating margin and profit per outlet.

Overall, Whitbread unveiled an 11% rise in interim profits to £121.3m, beating analysts’ expectations of £110m to £115m. All divisions, with the exception of its upscale hotels wing, Marriott/Swallow, saw profit increases.

The profit margin for continuing Whitbread increased from 13.9% to 15.2%, ebitda grew by 5.8% to £215.1m, and return on capital for the half year increased from 4.9% to 5.2%. Net interest was covered 5.1 times by operating profit. Adjusted earnings per share, excluding exceptional items and goodwill amortisation, rose by 12% to 28.91p. The company spent £58m on acquiring and developing new outlets.

Whitbread said trading since the half-year has been encouraging with most of its major brands improving their like-for-like sales position. After 32 trading weeks, like-for-likes at Travel Inn were up 6.6%, Beefeater up 1.7%, Brewers Fayre up 4.4% and David Lloyd Leisure 6.3%. However, Marriott remained "slightly negative", with an l-f-l fall of 0.7%.

The group's chief executive, David Thomas, said new site capital expenditure was being focused on the brands which were producing the strongest return, namely Brewers Fayre, Brewsters, Travel Inn and David Lloyd Leisure.

Its shares rose 23p to 523p in early trading this morning.

Whitbread retail at-a-glance

Pub restaurants



+ 1.0%

Like-for-like sales


+ 2.7%

Operating profit


+ 6.3%

High Street Restaurants (retained)



+ 5.4%

Like-for-like sales


+ 0.5%

Operating profit