Whitbread seeks new head despite results froth
Pub and leisure group Whitbread has started the search for a new chief executive after Andy Harrison decided to step aside at the end of the financial year.
His decision to pursue fresh challenges came as the Bedfordshire-headquartered business announced a significant spike in revenues and profit for the year to February 26.
Revenue topped £2.6 billion – up 13.7 per cent year-on-year. Profit was up 13.2 per cent to £366.1 million.
Harrison (pictured), who formerly headed up easyJet, said the group’s Premier Inn hotel chain grew its total sales by 15.3 per cent; Whitbread also finished the year with record occupancy of 81.3 per cent.
Restaurants had a good year with total sales growth of 3.2 per cent and like for like sales up 2.1 per cent. Costa, the coffee shop chain, extended its outstanding track record with total sales growth of 17.9 per cent, driven by UK like for like sales growth of six per cent, 219 net new stores worldwide and 777 net new Costa Express machines.
Harrison added: “We are continuing to invest in strengthening our brands and organic network growth including in selected international markets. Our capital investment will rise to circa £700m in this financial year, up from £565.3m in 2014/15. Our investment programme has created around 3,000 new UK jobs and around 1,000 apprenticeships.
“We are also delivering good returns on our investment, with return on capital rising to 15.7 per cent, up 0.4 percentage points from the prior year. Our combination of rapid organic growth and good returns is generating a strong operating cash flow of £714.2m – up 17.8 per cent.”
He said Whitbread was on track to deliver its 2016 and 2018 growth milestones and has now published new growth milestones for 2020 which highlight the scale of the opportunity ahead.
Harrison added: “Trading in the new financial year has begun on plan with good momentum for Premier Inn and Costa and our restaurants business is trading slightly ahead of a subdued market outside the M25.”
Chairman Richard Baker paid tribute to Harrison’s role in taking Whitbread so far, adding that the group would consider external and internal candidates as his replacement. The succession would be effective from the end of February 2016.
Baker said: “Whitbread has gone from strength to strength under Andy's leadership, delivering consistent rapid and profitable growth built around our strong brands and the company's unique culture.
“Over the last five years our revenues have grown by 13 per cent per annum, driving a 17 per cent a year growth in our earnings per share, which has increased the company's market capitalisation from £2.5bn to £9.7bn.”
Harrison added: “After 18 years as chief executive of three different public companies it is time for me to plan my retirement from full time executive life and to seek new challenges.
“In the meantime, it is business as usual, which means that the Whitbread team and myself remain fully focused on continuing to deliver profitable growth.”