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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Whitbread Plc | LSE:WTB | London | Ordinary Share | GB00B1KJJ408 | ORD 76 122/153P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -21.00 | -0.68% | 3,077.00 | 3,087.00 | 3,089.00 | 3,121.00 | 3,077.00 | 3,083.00 | 1,587,423 | 16:35:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Hotels And Motels | 2.64B | 278.8M | 1.4465 | 21.35 | 5.95B |
From Apr 2019 to Apr 2024
TIDMWTB
RNS Number : 4388Z
Whitbread PLC
17 May 2019
Whitbread PLC
(the "Company")
17 May 2019
Annual Report and Annual General Meeting
The Company announces that its 2018/19 Annual Report and Accounts, Notice of Annual General Meeting and Form of Proxy, have been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/nsm.
These documents can also be downloaded from the Company's website at www.whitbread.co.uk.
The Company's Annual General Meeting will be held at Church House Conference Centre, Dean's Yard, Westminster, London SW1P 3NZ on Wednesday 19 June 2019 at 2.00 pm.
In accordance with the requirements of Rule 6.3.5 of the Disclosure Rules and Transparency Guidance of the UK Financial Conduct Authority, the Appendix to this announcement contains a description of the principal risks and uncertainties affecting the Group, a related party disclosure and a responsibility statement, each reproduced in unedited full text from the 2018/19 Annual Report and Accounts.
The Company's Preliminary Results for the financial year to 28 February 2019 were announced on 30 April 2019.
Enquiries:
Laura Taylor, Assistant Company Secretary
Tel: 01582 889363
APPIX
1. Principal risks and uncertainties
Understanding and responding to risks in our operations means we can make informed decisions that enhance our capacity to build value.
Risk management
Risk arises from the operations of, and strategic decisions taken by, every business. It is not something that can be avoided but should be actively managed and harnessed in pursuit of business objectives.
The Board has ultimate responsibility for risk management throughout the Group and determines the nature and extent of the risks Whitbread is willing to take to achieve its objectives. Risk is managed proactively by the Executive Committee. Certain responsibilities, such as overseeing the systems of risk management and internal control, have been delegated by the Board to the Audit Committee, which completes an annual review of the effectiveness of these processes.
The business units complete an annual review of the risks to the achievement of their strategic goals, whilst also taking into account the key operational risks, which are updated regularly. A top-down risk assessment is also completed to capture the Board's views on the principal risks facing Whitbread and its risk appetite for each. Actions required to manage these risks are monitored and reviewed on a regular basis. The principal risks identified, together with a summary of key mitigations, can be found on pages 54 and 55.
Longer-term prospects
The sections "Market Review" and "Our Business Model" in the Strategic Report describe how the Board has positioned the Group to take advantage of the growth opportunities in the markets in which the business operates and how the Company is positioned to create value for shareholders, taking account of the risks described in this section of the Annual Report.
Viability Statement
The Corporate Governance Code requires that the Directors have considered the viability of the Group over an appropriate period of time selected by them, in this case a three-year period. In making this assessment the Directors took into account the current financial and operational positions of the Group and the potential impact of the risks and uncertainties as outlined on pages 54 and 55 of the Annual Report.
The business planning process reviewed by the Board, as part of the annual strategic planning process, is over both a three and five-year timeline, with the Board acknowledging that there is significantly more certainty over the first three years of the plan in light of fluctuations in the global economy, the entry of new competitors and customer preferences. Therefore, the Directors have determined a three-year period is an appropriate period over which to provide its viability statement.
In making the viability statement, the Board carried out a robust assessment of the principal risks and uncertainties facing the Group which could impact the business model, future performance, solvency and liquidity, including the uncertainties surrounding the UK leaving the EU which is expected to occur within the viability assessment period. Scenario modelling and sensitivity analysis was applied to forecasted cash flows, including a downturn in like for like growth rates, as well as the potential effects should the principal risks actually occur. Consideration was also given to the availability and likely effectiveness of mitigating actions that could be taken to avoid or reduce the impact or occurrence of the identified risk, including the flexibility in relation to discretionary growth capital expenditure and dividend policy, both of which allow the Group to manage cash flows and provide significant mitigation.
It should be noted that whilst the Group is currently in a net cash position it is pursuing a share buyback and tender offer to return profits to shareholders, which is expected to result in the Group returning back to a net debt position during the assessment period, for which appropriate facilities are in place.
Based upon this assessment the Directors confirm that they have reasonable expectation that the Group will be able to continue in operation to meet its liabilities as they fall due over the three-year assessment period.
Principal risks
Hot Features
Premium
Strategic Risk Movement Risk Key mitigations
priorities vs prior appetite
year
1|2|3 Change Level High We have embarked on an
Our ability extensive programme of
to execute the change, including upgrading
significant volume our legacy customer booking
of change. systems, whilst also
delivering an ongoing
efficiency programme
and upgrading our digital
capability and customer
propositions, enabling
Whitbread to deliver
its growth plans over
the coming years. To
help ensure the successful
delivery of these change
projects, we have enhanced
our internal project
delivery expertise and
capability and put in
place a robust assurance
management framework
coupled with regular
reporting to the Executive
Committee.
------------------------------ ---------- ---------- ----------------------------------
3 Cyber and data Level Low We have a specialist
security team and a series of
Cyber and data IT security controls
security remains in place, including up-to-date
a key risk as antivirus software across
it reduces the the estate, network/system
effectiveness monitoring and regular
of our systems penetration testing to
or results in identify vulnerabilities.
a loss of data. A continuous security
This in turn improvement programme
could result is in place and reviewed
in loss of income by the Executive Committee.
and/or reputational Specifically, during
damage. the year we have enhanced
network security and
made good progress implementing
an industry-recognised
security standards framework.
------------------------------ ---------- ---------- ----------------------------------
1|2 Economic climate Higher N/A There is a rigorous business
Uncertain/volatile planning process in place
political and which considers many
economic climate scenarios with appropriate
results in a responses, including
decline in GDP, potential Brexit outcomes.
consumer and We also have strong site
business spending, selection teams with
a fall in RevPAR well-established processes
and inflation in place based on market
pressure impacting and economic fundamentals,
growth plans. both at a macro and micro
This risk has level. These are supported
increased as by sensitivity analysis
a result of the and a robust investment
political and appraisal process to
economic uncertainty help deliver good levels
surrounding Brexit. of return and we continue
to make good progress
with our efficiency programme
that aims to deliver
GBP220 million of savings
over three years.
------------------------------ ---------- ---------- ----------------------------------
1|2|3 Food safety and Level Low The health and wellbeing
hygiene of our customers is fundamental
The preparation to our business. We have
or storage of stringent food safety
food and/or supply and sourcing policies
chain failure with traceability and
results in food testing requirements
poisoning and in place in respect of
reputational meat and other products.
damage. Independent food safety
audits are completed
regularly at our hotels
and restaurants and the
results closely monitored.
We invest considerable
resources in employee
training in the proper
storage, handling and
preparation of food.
------------------------------ ---------- ---------- ----------------------------------
1|2|3 Health and safety Level Low The safety of our guests
Health and safety and employees is of paramount
risk, death or importance. NSF, an independent
serious injury company, carries out
as a result of health and safety audits
Company negligence. on every site and we
have a programme of fire
safety training for our
employees. In addition,
C.S. Todd & Associates
Ltd, independent fire
safety consultants, have
been working with us
on the fire safety of
our hotels. Health and
safety is a measure on
the WINcard and acts
as a hurdle for incentive
payments. Regular health
and safety updates are
provided to the Executive
Committee and the Board.
------------------------------ ---------- ---------- ----------------------------------
2 International Higher High We are able to use the
growth deep level of skills
One of our strategic and experience used to
priorities is build the UK business,
the international coupled with a detailed
expansion of assessment of the German
Premier Inn, market and economic fundamentals
initially in both at a micro and macro
Germany. level.
------------------------------ ---------- ---------- ----------------------------------
1|2 Pandemic/Terrorism Level N/A The safety and security
The risk of a of our customers, employees
pandemic or terrorism and suppliers is of utmost
on the safety importance. Failure to
and security prevent or respond to
of our customers a major safety or security
or staff and incident could adversely
the consequent impact our operations
impact on trading. and financial performance.
We invest in site level
training to help identify
hostile reconnaissance
activities and to ensure
we have an appropriate
response should such
events take place. The
executive team also hold
regular crisis management
exercises to ensure we
are prepared for such
events.
------------------------------ ---------- ---------- ----------------------------------
1 Retention and Higher Low The success of our businesses
wage inflation would not be possible
Failure to maintain without the passion and
staff engagement commitment of our teams.
and retention Team engagement is fundamental.
in a tightening We monitor this closely
labour market. through our annual engagement
This risk has survey YourSay, the results
increased as of which are reviewed
a result of the by the Executive Committee
political and and the Board, with trends
economic uncertainty analysed and appropriate
surrounding Brexit. actions reviewed and
agreed. Team retention
is a key component of
our WINcard and Annual
Incentive Scheme.
------------------------------ ---------- ---------- ----------------------------------
2|3 Third-party arrangements Level Low Whitbread has several
Business interruption key supplier relationships
as a result of that help ensure the
the withdrawal efficient delivery of
of services/provision our multi-site and Support
of services below Centre operations. The
acceptable standards/support failure or withdrawal
or reputational of services from one
damage as result or more of these suppliers
of unethical may result in some business
supplier practices. interruption. To safeguard
against this, we continually
review our suppliers
and business continuity
arrangements. We expect
our suppliers' practices
to be in line with our
values and standards.
Suppliers are thoroughly
vetted before we enter
into any arrangements
to ensure they are reputable
and then monitored though
our supplier management
arrangements.
In the event of Brexit-related
supply disruption, we
continue to evolve contingency
plans with our major
suppliers and to help
maintain the supply of
key product lines and
alternatives.
------------------------------ ---------- ---------- ----------------------------------
2. Related Party Disclosure
The Group consists of a parent company, Whitbread PLC, incorporated in the UK and a number of subsidiaries and joint ventures held directly and indirectly by Whitbread PLC, which operate and are incorporated around the world. Note 10 to the Company's separate financial statements lists details of the interests in subsidiaries and related undertakings.
The Group holds 6% as a general partnership interest in Moorgate Scottish Limited Partnership (SLP) with Whitbread Pension Trustees holding the balance as a limited partner. Moorgate SLP holds a 67.8% investment in a further partnership, Farringdon Scottish Partnership (SP), which was established by the Group to hold property assets. The remaining 32.2% interest in Farringdon SP is owned by the Group. The partnerships were set up in 2009/10 as part of a transaction with Whitbread Pension Trustees and the Group retains control over both partnerships and, as such, they are fully consolidated in these consolidated financial statements. Further details can be found in Note 30.
Shares in Whitbread Group PLC are held directly by Whitbread PLC. Shares in the other subsidiaries are held directly and indirectly by Whitbread Group PLC.
Related party transactions
2018/19 2017/18
Joint ventures Joint
GBPm ventures
(restated)
GBPm
Sales to a related party 0.1 0.1
--------------------------------------- -----------------------
Amounts owed by related party - -
--------------------------------------- -----------------------
Amounts owed to related party - -
--------------------------------------- -----------------------
Joint ventures
For details of the Group's investments in joint ventures see Note 16.
Compensation of key management personnel (including directors):
2018/19 2017/18
GBPm GBPm
Short-term employee benefits 7.6 7.3
-------- --------
Post employment benefits - -
-------- --------
Share-based payments 10.0 0.6
-------- --------
17.6 7.9
-------- --------
Terms and conditions of transactions with related parties
Sales to, and purchases from, related parties are made at normal market prices. Outstanding balances at year-end are unsecured and settlement occurs in cash. There have been no guarantees provided, or received, for any related party receivables. No adjustment for expected credit loss relating to amounts owed by related parties has been made (2018: GBPnil). An assessment is undertaken, each financial year, through examining the financial position of the related parties and the market in which the related parties operate.
Transactions with other related parties
Details of transactions with directors are detailed in the remuneration report on pages 72 to 89.
Investment in Joint ventures
Principal Investment Principal Country % equity interest
joint ventures held by activity of incorporation
2019 2018
-------------------- ----------------------
Premier
Inn Hotels PTI Middle United Arab
LLC East Limited Hotels Emirates 49.0 49.0
--------------- -------------- ------------------- -------------------- ----------------------
Premier Premier
Inn Kier Inn Hotels
Limited Limited Property England 50.0 50.0
--------------- -------------- ------------------- -------------------- ----------------------
Healthy Whitbread Convenience
Retail Limited Group PLC food England 49.0 49.0
--------------- -------------- ------------------- -------------------- ----------------------
Hualian
Costa (Beijing)
Food & Beverage
Management
Company Costa Beijing
Limited Limited Coffee shops China - 50.0
--------------- -------------- ------------------- -------------------- ----------------------
During the year, the Group disposed of its 50% holding in Hualian Costa (Beijing) Food & Beverage Management Company Limited, as part of the sale of the Costa business to The Coca-Cola Company.
This entity is included in the share of joint ventures in the balance sheet in 2018, but excluded from the 2019 analysis.
The entity is not included in share of joint venture revenue and expenses for either year, because it is shown as part of the profit from discontinued operations shown in Note 10.
The following table provides summarised information of the Group's investment in joint ventures:
2019 2018
GBPm GBPm
Share of joint ventures' balance sheets 5.1 12.9
------- -------
Current assets 77.4 73.2
------- -------
Non-current assets 82.5 86.1
------- -------
Share of gross assets (8.7) (13.7)
------- -------
Current liabilities (25.5) (30.1)
------- -------
Non-current liabilities (34.2) (43.8)
------- -------
Share of gross liabilities 3.8 3.6
------- -------
Loans to joint ventures 52.1 45.9
------- -------
Share of net assets 4.5 4.5
------- -------
Premium paid on acquisition (cost in
excess of share of net assets at acquisition) 56.6 50.4
------- -------
Aggregate carrying amount of the Group's
interest in joint ventures
------- -------
2017/18
2018/19 (restated)
Share of joint ventures' revenue and
expenses GBPm GBPm
Revenue 18.7 18.7
-------- ------------
Operating costs (18.5) (16.2)
-------- ------------
Finance costs (0.8) (0.7)
-------- ------------
Operating (loss)/profit before tax and
net (loss)/profit (0.6) 1.8
-------- ------------
At 28 February 2019, the Group's share of the capital commitments of its joint ventures amounted to GBP0.4m (2018: GBP4.5m).
3. Directors' responsibility statement
The Directors are responsible for preparing the Annual Report and Accounts in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare the Group financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and Article 4 of the IAS Regulation and have elected to prepare the parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including FRS 101 Reduced Disclosure Framework. Under company law the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing the parent company financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
In preparing the Group financial statements, International Accounting Standard 1 requires that directors:
-- properly select and apply accounting policies;
-- present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
-- provide additional disclosures when compliance with the specific requirements in IFRS are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and
-- make an assessment of the Group's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Responsibility statement
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;
-- the strategic report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and
-- the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.
This responsibility statement was approved by the Board of Directors on 29 April 2019 and is signed on its behalf by:
Alison Brittain Nicholas Cadbury Chief Executive Group Finance Director
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
MSCCKODBDBKDPPD
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May 17, 2019 07:38 ET (11:38 GMT)
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