Watered down

22 October 2019 By Dasha Afanasieva Follow @dasha_reuters

The 3.9 bln pound sale of Costa pleased activist investors eager for a breakup. But the remaining hotel and restaurant business is worth little more than before the deal, after including cash paid to shareholders. Fears of a messy EU exit are denying CEO Alison Brittain credit.

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British hotels and restaurants group Whitbread on Oct. 22 reported revenue of 1.1 billion pounds for the six months to Aug. 29, down 0.1% year-on-year. Adjusted profit before tax fell to 236 million pounds from 246 million pounds in the same period of 2018.

In August 2018, Coca-Cola agreed to buy Whitbread’s Costa Coffee chain for 3.9 billion pounds including debt. The price represented a multiple of 16.4 times Costa’s EBITDA of 238 million pounds for the year to March 2018. The transaction closed on Jan. 3.

Whitbread shares have fallen 7% in the year to date. They were up 0.8% at 42.38 pounds by 0816 GMT on Oct. 22.

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