Whitbread wields axe as speculators circle
Whitbread is expected to reveal plans to axe a quarter of its head office work force tomorrow.
As he reports disappointing interim figures on Tuesday, chief executive Alan Parker is expected to confirm that up to 250 jobs will go at the leisure group’s Luton headquarters.
Parker is fighting to keep the disparate business together. Its interests range from the David Lloyd Leisure clubs to the Premier Travel Inn hotel chain, Pizza Hut, TGI Fridays and Costa Coffee.
The board has ruled out a complete break up of the business but further disposals are expected to return cash to shareholders.
Parker has already sold assets such as the Marriott hotel business, giving back £400m to shareholders through a special dividend. He is also thought to be considering revaluing the group’s £2.5bn freehold property.
Speculation about Whitbread’s future has been rife since Parker divided the operation, with budget hotels and pub restaurants placed in one division and the remainder lumped in the other.
Restaurant chains TGI Friday and Pizza Hut are seen as the frontrunners for disposal and there has been word of a management buyout at Costa Coffee.
The under-performing David Lloyd chain is thought to be attractive to rival gym operator Esporta, which is owned by Duke Street Capital, while the pub restaurant business has been mooted as a target of publican Mitchells & Butlers. Venture capitalists such as Cinven are also said to be circling.
Premier Travel Inn is expected to emerge as the strongest performer at the interim update, with further expansion, that would take it past the 30,000 mark by the end of 2006, likely to be outlined.