Drawing on a study from the University of Texas, city pundits will tell you that the average tenure for a FTSE 100 chief executive is 4.8 years. Having served five with hospitality giant Whitbread (WTB), former easyJet (EZJ) and RAC chief executive Andy Harrison is keen to move on. Mr Harrison said he wants to retire from "full-time executive life" and "seek new challenges". That translates as the chairmanship of Dunelm (DNLM), a post Mr Harrison will take up in early July. He has served as a non-executive director at the homewares retailer since September 2014, and will replace current chairman Geoff Cooper.
Mr Harrison has left Whitbread in fine shape. For the year to February 2015, the group reported like-for-like sales growth of 6.5 per cent and an 18.5 per cent increase in underlying pre-tax profits, to £488m. Whitbread's two key brands - hotel business Premier Inn and high-street coffee chain Costa - are both going gangbusters. The former grew like-for-like sales by 9 per cent, and finished the financial year with a record occupancy rate of 81.3 per cent - up 3.2 percentage points. Costa sales grew by almost a fifth thanks to organic growth of 6 per cent and 219 new stores worldwide.
Mr Harrison's departure served as an opportunity for the group to update its "growth milestones". The five-year plan published in 2013 still stands, but management is now also aiming to add more than 25,000 rooms to the Premier Inn estate by 2020. It also hopes to bump up Costa system sales from £1.4bn to £2.5bn within the same timeframe. International expansion is still high on the agenda. Whitbread acquired its first trial hotel site in Frankfurt last September, and plans to open six to eight hotels across Germany by the end of the decade.
Analysts at Numis nudged their forecasts down to reflect additional investment in Premier Inn and the timing of new openings, which may explain why the shares fell 3 per cent on results day. The brokerage expects pre-tax profits of £550m for the current financial year, giving EPS of 229p, up from £488m and 214p in 2014-15.
| WHITBREAD (WTB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 5,350p | MARKET VALUE: | £9.72bn | |
| TOUCH: | 5,345-5,350p | 12-MONTH HIGH: | 5,475p | LOW: 3,875p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 1,085p | NET DEBT: | 29% | |
| Year to 26 Feb | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 1.60 | 271 | 127 | 44.5 |
| 2012 | 1.78 | 306 | 152 | 51.3 |
| 2013 | 2.03 | 343 | 166 | 57.4 |
| 2014 | 2.29 | 347 | 183 | 68.8 |
| 2015 | 2.61 | 464 | 205 | 82.15 |
| % change | +14 | +34 | +12 | +19 |
Ex-div: 28 May Payment: 3 Jul | ||||
