Whitbread this morning announced plans for £800m of asset disposals, including its central London headquarters.
Surplus cash from the disposals will be returned to shareholders, in addition to the promise of faster growth in future dividends. The group will relocate its head office to Bedfordshire after 254 years in the City of London.
Whitbread has also announced plans to bring its pub restaurants under a single management team, headed by Phil Urban.
The news came as the company reported a 9.4% rise in half-year pre-tax profits to £147.4m, towards the top end of analysts’ forecasts.
Sales at the pub restaurants were down 0.6% to £306m, with like-for-like sales up 0.7%. The drop was attributed in part to the disposal of 50 Beefeater outlets last year and the poor performance of Out & Out.
In addition, Beefeater has been held back by the disruption caused by its conversion programme, which has led to the loss of trading weeks.
57 outlets have now been converted to the new format, with Whitbread reporting ‘strong uplift’ in sales as well as margin improvements in those sites.
Operating margin across the pub restaurant business declined by 1.5% points to 15.9%.
High street restaurants reported sales up 6.7% to £221m, with like-for-likes up 2.7%. The group said that it was expanding its TGI Friday's brand with a smaller store. The first new outlets will open in the second half of the year in Bath and in Harrogate.
The company said its asset disposal programme would include some of its Marriott hotels, its German hotels and restaurants, 50 smaller pub restaurants and proceeds from the planned flotation of soft drinks group Britvic, where it has a 23.75% interest.
Alan Parker, the company’s chief executive, said: "What I am outlining today is the next chapter in Whitbread's story. Major structural change is not required.
"This review builds on the strength and success of our business and our expertise in managing the UK's leading hospitality group."
The group said that like-for-like sales growth since the half-year had been maintained, with improvements in Marriott and the pub restaurants compensating for a slower period in high street restaurants.
Total sales at the half-year were up 4.6% and subsequently have grown by 5.8%.
