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John Banham

John Banham. chairman. Annual Results 2002/3. Like-for-like sales - first 8 weeks 2003/4. Marriott -4.1% Travel Inn 4.0% Brewers Fayre/Brewsters 5.2% Beefeater 3.3% David Lloyd Leisure * 6.8%. * 5 weeks. Year-on-year % growth. 2002/3. 2001/2.

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John Banham

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  1. John Banham chairman Annual Results 2002/3

  2. Like-for-like sales - first 8 weeks 2003/4 • Marriott -4.1% • Travel Inn 4.0% • Brewers Fayre/Brewsters 5.2% • Beefeater 3.3% • David Lloyd Leisure* 6.8% * 5 weeks

  3. Year-on-year % growth 2002/3 2001/2 Four consecutive periods of double-digit earnings growth* * Profit after tax

  4. Whitbread’s winning brands

  5. David Richardson finance director Annual Results 2002/3

  6. Highlights • Strong profit growth • Positive cash flow • Improving returns

  7. Profit – pre exceptionals £m Stats. Proforma* Growth 2002/3 2001/2 % Division sales 1,803 1,822 (1.0) Less Pelican (23) (100) - Sales continuing 1,780 1,722 +3.5 Divisional profit 297 270 +10 Central costs (22) (21) - PBIT 275 250 +10 Interest (61) (63) - PBT 214 187 +14 Tax (66) (56) - PAT and minorities 147 131 +12 * Proforma excludes Pubs and Bars which was demerged in May 2002

  8. Positive cash flow £m Stats. Proforma Growth 2002/3 2001/2 % Cash flow from operations 370 336 +10.1 Dividends/repayments JVs 17 11 +54.5 Interest (63) (67) +6.0 Taxation (49) (37) (32.4) Net capex (190) (220) +13.7 Pensions (15) - - Acquisitions/Disposals 23 - - Dividends (54) (49) (10.2) Net Cash inflow/(outflow) 39 (26)

  9. Improved returns Operating profit ROCE Growth Growth % % % pts Marriott (pre goodwill amortisation) +0.0 6.5 +0.0 Travel Inn +10.8 12.6 +0.1 Pub restaurants +10.1 9.9 +0.9 High Street restaurants +25.1 19.1 +3.9 Total restaurants +13.0 11.1 +1.3 David Lloyd Leisure +25.9 9.1 +1.5 Group +10.0 9.4 +0.7

  10. Marriott Actual Growth Returns (post goodwill amortisation) 5.8% +0.0% pts Returns (pre goodwill amortisation) 6.5% +0.0% pts Like-for-like sales growth (0.5)% Occupancy 71.0% +2.0% pts Average room rate £72.75 (1.9)% Operating margin 18.3% +0.6% pts PBITA per room £7.5k +£0.1k • Sales vs markets • Leapfrog cost savings • Kensington - opening Summer 2003

  11. Travel Inn Actual Growth ROCE 12.6% +0.1% pts Like-for-like sales growth 6.1% Occupancy 82.0% +1.0% pts Average room rate £39.98 +3.6% Operating margin 32.7% (1.3)% pts Number of rooms 16,669 +745 • Brand strength • CRS/internet/cross sell • Business card • Room growth/WIP • Refurbishment cost

  12. Restaurants Actual Growth ROCE 11.1 1.3% Like-for-like sales growth 2.0% Operating margin 9.8% 0.9% Year end Pub restaurants 625 (1) Year end High Street restaurants 897 +49 • Marketing • Food and menu development • Labour control • Margin control • Tail disposal • Expansion

  13. David Lloyd Leisure Actual Growth ROCE 9.1% +1.5% pts Like-for-like sales growth 6.1% Number of members 308,469 +10.6% Operating margin 23.7% +2.9% pts Number of clubs 55 +6 • Differentiated product • New member sales/retention • Cost management • Maturing clubs

  14. Improved returns Operating profit ROCE Growth Growth % % % pts Marriott (pre goodwill amortisation) +0.0 6.5 +0.0 Travel Inn +10.8 12.6 +0.1 Pub restaurants +10.1 9.9 +0.9 High Street restaurants +25.1 19.1 +3.9 Total restaurants +13.0 11.1 +1.3 David Lloyd Leisure +25.9 9.1 +1.5 Group +10.0 9.4 +0.7

  15. Exceptionals £m Pelican/Curzons (7.8) Site disposals +1.6 Provision for lease (5.0) Tax credits +16.4 Net exceptional profit after tax +5.2

  16. EPS/dividends 2002/3 2001/2 Growth % EPS Adjusted 52.85p 47.85p 10.4 Basic 51.77p (15.91)p - Dividends Final 14.30p 12.75p 12.2 Total 19.87p 17.80p 11.6

  17. Balance sheet strength 2002/3 2001/2 Interest cover (before exceptionals) 4.5 times 4.2 times Gearing 47% 52% Assets per share £6.70 £6.37

  18. Capital expenditure £m 2002/3 2003/4 Actual Guidance Marriott 27 25-35 Travel Inn 65 65-75 Restaurants 62 75-85 David Lloyd Leisure 54 55-65 Other 10 15-20 Total 218 c275

  19. Future years • ERP System • Year end date • Financing

  20. Summary • Good growth • Strong cash • Better returns • More to come

  21. David Thomas chief executive Annual Results 2002/3

  22. Year-on-year performance Sales(%) (3.1) 15.2 1.2 5.3 10.5 Like-for-like sales (%) (0.5) 6.1 2.7 1.6 6.1 Operating margin (% pts) 0.6 (1.3) 1.0 0.8 2.9 Operating profit (%) 0.0 10.8 10.3 25.1 25.9 ROCE (% pts) 0.0 0.1 0.9 3.9 1.5 Marriott Travel Pub High Street David Lloyd Inn restaurants restaurants Leisure

  23. Whitbread’s winning brands

  24. Whitbread’s winning brand approach • Understanding consumers’ needs • Developing compelling brand proposition • Operational excellence • Performance management

  25. Travel Inn • Everything you need for a good night’s sleep • Breaking the mould • Industry success story • Continuous innovation

  26. Rooms 1st Touchbase opened 1st City Metro opened 1st Capital unit opened Travel Inn - probably the fastest rooms growth of any hotel company * projected

  27. Travel Inn’s performance • Like-for-like sales +6.1% • Occupancy of 82.4% +1.3% points • ARR £39.98 +3.6% • Operating profit +10.8%

  28. Brewsters – the family-friendly restaurant • Unique positioning • Heaven for kids • Brewsters Club – 560,000 • Haven for parents • Like-for-like food sales +6.0%

  29. Brewers Fayre/Brewsters - a great combination • Non-competing brands • Synergistic benefits realised • Strong growth potential • 200 new units

  30. Brewers Fayre/Brewsters performance • Like-for-like sales +4.0% • Operating margin 15.4% +0.5% points • ROCE of 12.0% +0.5% points

  31. David Lloyd Leisure

  32. David Lloyd Leisure - brand differentiation Suburban rather than Urban Families/couples rather than Singles Lifestyle rather than Fitness Big rather than Small Club rather than Gym

  33. David Lloyd Leisure’s performance • Like-for-like sales +6.1% • Operating margin 23.7% +2.9% pts • Operating profit +25.9% • ROCE +1.5% pts

  34. Beefeater - progress report • Estate review complete • Tail identified • 51 sites being sold • 7 sites transferred • Brand review under way • Customer research completed • Pilot sites on track • Roll out decision by Sept 2003 • Improving performance • Operating profit +18% • ROCE +1.2% pts

  35. High Street restaurants - a winning trio • Costa - the profitable coffee shop model • Pizza Hut - record sales and profits • TGI Friday’s-successful turnaround strategy

  36. Marriott

  37. % Marriott brand delivers yield premium

  38. % De Vere Hilton M&C Thistle Six Continents Marriott Marriott – operating margin change 2002 vs 2001 Source: Internal analysis of published accounts

  39. £k Marriott brand Average top 3 (Hilton, De Vere, M&C) Marriott - profit per room

  40. Whitbread positioned to deliver sustainable growth • Focussing on growth markets • Improvingreturnsfromexistingassetbase • Implementing organic expansion • New brand development in core markets

  41. Key strategies in place to achieve future growth • Marriott • improving profit per room to £11k • Travel Inn • grow distribution by 50% • BrewersFayre/Brewsters • grow distribution by 50% • Beefeater • improving returns to 12% • High St restaurants • improving returns to 20%+

  42. ROCE % Target High Street restaurants - returns on track to exceed 20%

  43. Key strategies in place to achieve future growth • Marriott • improving profit per room to £11k • Travel Inn • grow distribution by 50% • BrewersFayre/Brewsters • grow distribution by 50% • Beefeater • improving returns to 12% • High St restaurants • improving returns to 20%+ • DavidLloydLeisure • improving mature club returns • 21 maturing clubs • 55 to 100 club growth

  44. Clubs David Lloyd Leisure - value adding expansion programme

  45. Whitbread’s winning brands

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