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David Richardson, finance director, Whitbread PLC

David Richardson, finance director, Whitbread PLC. ABN AMRO Leisure Conference 2004. Whitbread 2003/4 operating profit (PBITA)*. *Excludes associates. Whitbread 2003/4 net assets. The value agenda. Improving returns Generating growth The four-star recovery Capital allocation.

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David Richardson, finance director, Whitbread PLC

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  1. David Richardson, finance director, Whitbread PLC ABN AMRO Leisure Conference 2004

  2. Whitbread 2003/4operating profit (PBITA)* *Excludes associates

  3. Whitbread 2003/4net assets

  4. The value agenda • Improving returns • Generating growth • The four-star recovery • Capital allocation

  5. Improving returns3-year ROCE profile 25.3% 13.6% 11.5% 10.4%* 9.5%* 6.2%* * pre-amortization of goodwill

  6. Generating growth3-year PBIT and EPS growth PBIT (£m) EPS (pence)

  7. Generating growth3-year like-for-like sales

  8. Generating growthincreased distribution(projected) • Travel Inn: • 18,200 bedrooms to 25,000 • Brewers Fayre/ Brewsters: • 395 pub restaurants to 600 • David Lloyd Leisure: • 56 UK/Eire clubs to 100 • Opportunities in Spain and Benelux • High Street: • Pizza Hut • Costa

  9. New site investment demands strong returns and good cash flow *Note: 2003/4 mature club ROCE 14.9%

  10. Whitbread group ROCE(PBIT, pre-exceptionals and goodwill amortization: year end assets)

  11. Recovery in 4-star hotels? rate vs occupancy (UK) Source: Hotelbenchmark.com

  12. Recovery in 4-star hotels? rate vs occupancy (London) Source: Hotelbenchmark.com

  13. Recovery in 4-star hotels?business & leisure mix (UK) business leisure Source: Whitbread analysis of TRI data

  14. Capital allocationasset ownership & the 4-star cycle WACC ROCE (%) Prop financing

  15. Capital allocationROCE vs WACC Chart shows impact of returns exceeding or falling below weighted average cost of capital, relative to capital employed by business unit.Notional WACC set at 10.1% pre-tax

  16. Levers for growth • Continued like-for-like sales growth • Increased distribution of high returning brands • Recovery in four-star hotels • Capital reallocation

  17. Appendix

  18. David Richardsonfinance director • External appointments: • Serco Group PLC (non-executive director and chairman of audit committee) • Britannia Soft Drinks Limited (director) • Previous experience: • Qualified as an accountant with Touche Ross before moving to ICL. David joined Whitbread in 1983 and was appointed to the board as strategic planning director in 1996. Finance director since March 2001. enjoy!Whitbread

  19. Hotels enjoy!Whitbread

  20. Travel Inn enjoy!Whitbread

  21. Restaurants enjoy!Whitbread

  22. David Lloyd Leisure enjoy!Whitbread

  23. Glossary of terms General Like-for-like sales Period over period change in total sales, less sales generated by businesses acquired or disposed of and retail outlets opened or closed during 2002/3 and 2003/4 Return on Capital Operating profit divided by period end net assets. (Where average ROCE is quoted it is based on the average of opening and Employed (ROCE) closing net assets.) Operating margin Operating profit expressed as a percentage of sales Restaurants Turnover per outlet Turnover in period divided by the average of opening and closing outlets Profit per outlet Operating profit (after allocation of overheads but before exceptional items) divided by the average of the opening and closing number of outlets Hotels Achieved Room Rate (ARR) Hotel accommodation income divided by the number of rooms occupied by guests Occupancy Number of hotel bedrooms occupied by guests expressed as a percentage of the number of bedrooms available in the period Yield (RevPar) Also known as "revenue per available room" this hotel measure is achieved by multiplying the ARR by the occupancy rate Income before fixed costs Hotel operating profit before directly attributable fixed costs (such as rent , rates, margin (IBFC) insurance, etc ) and central costs divided by hotel sales Profit per room Hotel operating profit ( after allocating central costs) divided by the number of rooms available David Lloyd Leisure Club EBITDA margin Club contribution before depreciation, amortisation and central costs divided by club sales in the period Revenue per member Club sales divided by the average of the opening and closing number of members EBTIDA per member Club operating profits before depreciation, amortisation and central costs divided by the average of the opening and closing number of members Retention rate The percentage of members at the start of the period who are still members at the end of the period expressed as a percentage of members at the start of the period enjoy!Whitbread

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