shieldbug
24 Oct 2017
Re: Hotels Growth - Good for Premier Inn This company is largely 'Brexit' proof WTB have 50,000 employees with annual churn of 40%. The CEO was on the radio this morning say they were talking to the government stressing the need for "flexible workforce".Also discretionary retail (Costa) could be badly hit by a financial downturn. Personally I think meeting for a coffee, walking into work with a coffee, stopping at service stations for coffee will probably carry on no matter what.
middler2
24 Oct 2017
Re: Hotels Growth - Good for Premier Inn I think we have all missed something. This company is largely 'Brexit' proof and Costa has now introduced breakfast and lunch - just watch how it gets better from here. Personally, I am buying on these results.
shieldbug
24 Oct 2017
Re: Hotels Growth - Good for Premier Inn "Just what is it that the market and investors don't like?"I guess actual money making is not fashionable. Promise of money making is more attractive at the moment. One of the attractions of Whitbread is that 95% of Premier Inn sales are direct to the customer and Costa is very low risk cash sales. Very little chance of bad debts in that set up. More risk doing business abroad with JVs but the bulk of the business is very simple and easy to understand.Costa has shown no growth but Costa represents 18% of total revenue.
numberbiter
24 Oct 2017
Re: Hotels Growth - Good for Premier Inn What is it that investors don't like? The answer is simple - see my post dated 23 August. It is all about the concept of the 'product life cycle'. A new product experiences rapid growth, but eventually it hits a peak and then declines. When negative growth sets in it usually accelerates. On 23 August I warned that Costa Coffee was old and stale and that it had past its peak. In todays's statement Whitbread confirmed I was right.So we can foresee further profit falls from Costa; gains from hotels will not keep up. Unless the Board comes up with a new innovative product it is certain that profit growth has well and truly stalled.
Hardboy
24 Oct 2017
Re: Hotels Growth - Good for Premier Inn Casa,I agree - I skipped through the results this morning and was reassured - after recent profit warnings from Merlin, IWG & Pendragon I was pleased to see steady progress. I too am surprised at the market reaction. I may have missed something; and I did not check market predictions ahead of the results; but I read: -Sales, Profits, & Dividends up considerably above the rate of inflation,Net Debt down, Pension Deficit down, despite considerable investment in growth.All positive. If FY dividend is increased by the same hike as this it would give a 2.5% yield at a price of 4000 & if the earnings are increased full year by the same as the interims, it would give a PE of 16 at a price of 4000. To me that suggests the share price should be around the £4. So I would say this has to be a buying opportunity, but it may be worth seeing how some analysts explain the drop today first.
casabanker
24 Oct 2017
Re: Hotels Growth - Good for Premier Inn A 20% rise in first half profits and a 5% hike in the dividend results in a 3.5-4% drop in the sp. Just what is it that the market and investors don't like? Has debt increased significantly? If so, then WTB is a hold. If not, surely it must be a buying opportunity.Casa.
Uncle Doug
20 Oct 2017
Hotels Growth - Good for Premier Inn Today's results. InterContinental Hotels Group revenue per available room increased by 2.3% in the third quarter while net rooms growth of 4.1% was its strongest since 2010.This will (I'm sure) also be reflected in Premier Inn and WTB update next week. Time to buy - good upside from here.
Uncle Doug
16 Oct 2017
Re: Costa to grow in China I have noticed recently that McDonalds is pushing its coffee - very good advert on TV. I drive around the UK a lot and I've noticed a worrying trend for us WTB holders. In UK motorway services lots of people are buying a single coffee (no food) at McDonalds at £1.89 and avoiding Costa and Starbucks and their £3.89 offering. This used to be a captive market but now McDonalds seem to be successfully moving in and once people catch on to the price difference, this could hurt Costa's sales.One to watch I guess ... I hate to say it but the MaccyDs coffee is actually rather good - a lot better than the insipid brown water it used to be.
LK Hyman
12 Oct 2017
Re: Costa to grow in China Bill,"Play the tartan card... seems to go down well over there?"Wot? Like Jardine Matheson did in the 19th century, m8? They sold the Chinese some product that did 'em a power of no good ... and the Chinese haven't forgotten or forgiven.I doubt that tea is toast but will console mesen, if it is, with the fact that the biggest seller of instant coffee in India is [pause for drum roll] .... Unilever with its Bru brand.I'm givin' thought to how ULVR and IMB could collaborate on cross selling their brands in India ... "Have a Bru while you're sucking on your Blu" .... summat like that.Perhaps both companies could launch them two products in China? It would help to get Chinese heads around the difference between their "r" and their "l", no?LKH on the flybridge dew ne lo mo, gwai lo!
Hardboy
12 Oct 2017
Re: Costa to grow in China Following up on the China JV deal, I heard some top honcho from Starbucks being interviewed on Bloomberg yesterday and he was getting so excited about the potential for the coffee market in China I didn't think he'd be able to finish the interview. I just tried to find it but failed (no surprise given the extent of my technical competence) but I did find this:-[link] you can see why they are getting excited - those graphs have an exponential look to them. Anyway the market certainly seems to have put its seal of approval on the deal over the last couple of days. Onwards and upwards!
Bill1703
10 Oct 2017
Re: Costa to grow in China "There are so many of them we could probably get them drinking Irn Bru, or dandelion & burdock successfully..."HB - good idea! Play the tartan card... seems to go down well over there? Maybe we could get them hooked on Vimto too... my Nichols SP has been ailing somehwat of late..."Tea is toast mate."I quite agree, Uncle D... as is, er, toast... ironically enough... So, it's Buy WTB, Sell ULVR... not a bad trade anyway, on a number of counts? LKH will never go for it, but he is very much a child of the Empire...
Bill1703
10 Oct 2017
Re: Costa to grow in China "... I thought that the Chinese like tea rather than coffee? LKH on the flybridge hurls bucket of cold water over WTB's move, moves on ..."China is already a huge market for Starbucks, and Costa has been making big strides there for a while... quite apart from getting them hooked on (relatively) good quality coffee, there is evidence that they are taking in droves to their local Starbucks (for instance) as the "third place" of choice for social interaction (ie. after home and the workplace). Over here, of course, we've always had "the pub", which is much less the case in China ... though I see studies which suggest that is also changing here. Personally - loyal WTB shareholder though I like to be - a few cups in my local high-street Costa doesn't really compare to an evening in the pub with friends... but then, people like me aren't really the future... sadly....There is also the "aspirational" attraction of association with a major Western brand, for a society which is increasingly open to such things... Costa obviously still has a long way to go to match the pull of a massive American brand, but no reason why they can't do very well in a huge and evidently receptive market.
Uncle Doug
10 Oct 2017
Re: Costa to grow in China LKH,Back in the good old days we Brits used to like tea but now we quaff twice as much coffee as tea. Maybe you've been on your dingy dinghy too long to notice the rise of Costa, Starbucks and Cafe Nero over here? Tea is toast mate.Chinese penetration is small (ooh-err missus) so even if only 20% of Chinese start drinking a cup of coffee a day that's ... checks calculator ... lots of coffee. So buy WTB now - fill yer boots - you know it makes sense. Simples innit?
Hardboy
10 Oct 2017
Re: Costa to grow in China "I thought that the Chinese like tea rather than coffee?"There's enough of 'em. to satisfy both markets. There are so many of them we could probably get them drinking Irn Bru, or dandelion & burdock successfullyI confess to never having been to China or done sufficient business with the Chinese, but in some cultures the locals like to do business with locals, and support local businesses. Also every country has its own minefield of cultural, regional, legal & financial quirks; so whenever a large multi-national goes into a new country I like to see them going in with a local partner, who understands the local differences, and so the new business can be sold as a local one. From a potential business point of view I am sure that buying out the JV partner is a good move; but I hope Whitbread have enough local expertise of their own at the top of their Chinese venture to deliver that potential.
LK Hyman
10 Oct 2017
Re: Costa to grow in China Uncle Doug,"make Costa the coffee shop of choice"I thought that the Chinese like tea rather than coffee?LKH on the flybridge hurls bucket of cold water over WTB's move, moves o
