Whitbread plans European foray
Whitbread is close to disposing of its troubled Pelican high street restaurants and is poised to move into mainland Europe.
The announcements came as the company unveiled solid full-year results lifted by a strong performance from the David Lloyd Leisure health clubs.
The company is set to take its Lloyd clubs to the Continent and has acquired a site in Brussels. David Richardson, finance director, said Whitbread was in final discussions with an unnamed buyer, but would not say when an announcement would be made.
The group of 153 restaurants, which include the Café Rouge and Bella Pasta chains, have been up for sale since October.
Their disposal will be the final stage in a two-year restructuring that has transformed Whitbread.
The group has also sold its brewing arm and the 3,000-strong pub chain in an effort to become more focused on its leisure operations.
The group paid Roger Myers and Karen Jones £133m for the Pelican chain in 1996. It is thought the company will now not get more than £50m for the business.
It is understood to be in talks with private equity group ECI Ventures.
The news on Pelican came as Whitbread announced full-year results marred by restructuring charges and the September 11 terrorist attacks on the US.
Pre-tax profits before exceptionals in the year to March were £213.4m compared with £334.4m previously. Including one-off charges of £206.4m, the pre-tax line dropped to £7m on sales of £2bn against £3.1bn last time.
In the hotels division, which accounts for more than 50 per cent of group profits, sales rose by 3.7 per cent but operating profit declined by 2.4 per cent as a result of lower yields following the terrorist attacks.
Mr Richardson said Marriott, the group's upscale brand, has continued to suffer since the beginning of the new financial year, with like-for-like sales down by 2 per cent in the first seven weeks as demand remains poor in London.
The strongest growth came from David Lloyd Leisure, the health clubs, which reported like-for-like sales up 15 per cent. Whitbread opened five new clubs last year and has plans for another five this year.
Whitbread shares rose 5p to 685p in early London trading.
