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David Lloyd leads the way for Whitbread in annual results
Whitbread is close to finalising the sale of its Pelican restaurant business, which includes the Café Rouge and Bella Pasta chains, and has reported a 36 per cent fall in pre-tax profits for the year to March 2 of £213m - a result of selling its pubs division last May.
Whitbread bought the Pelican restaurants for £133m five years ago, but the book value of the business has been written down from £50m to £24m.
The sale is part of the company's restructuring strategy, in which it is pulling out of brewing, bars and pubs to concentrate on leisure operations.
Remaining Whitbread restaurants, such as Pizza Hut and Brewers Fayre boosted profits ahead of their 10 per cent earnings growth target and Sir John Banham, chair, discounted any suggestion of further disposal: 'There is no question that they will stay as an important part of the group's overall operations.'
Whitbread's hotels recorded weak results following the events of 11 September but the company said prompt management action had led to continuing recovery.
Sir John said Marriott is still experiencing 'softness' in London, but yield has been sustained ahead of the market. 'Other major brands continue in like-for-like sales growth ahead of the 5 per cent target.'
David Lloyd Leisure, the health and fitness club subsidiary of Whitbread, has put in the strongest performance according to the annual results.
The chain exceeded sales targets, is ahead of its 10 per cent earnings growth target, and experienced a 15 per cent growth in like for like sales. New clubs performed particularly well. Five opened in the financial year ending in March, bringing the total to 49 with an operating margin of 20.8 per cent.
At the end of the year, David Lloyd had an additional 10 sites in the pipeline, with five expected to open in the next twelve months. First year memberships are running at more than double previous levels, which Whitbread attributes to effective pre-opening marketing, but retention rates fell slightly to 73 per cent.
'The new financial year has got off to a promising start, and the outlook for David Lloyd is positive,' said a spokesman. 'We have significant reasons to be cheerful, and we seem to be the only operator at the premium end of the market that is optimistic about the future.'
A prospective David Lloyd site in Brussels has gained planning permission, but no project dates have been released so far.
The company still has 12 Swallow hotels and its Curzons health and fitness clubs up for sale. Details: +44(0)1582 424200