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Whitbread will be issuing its Q1 trading update tomorrow. Investors will remember that Whitbread hit the headlines in late April when its chairman Adam Crozier and its chief executive, Alison Brittain, said they were going to break the company up by 2020.

The plans included the separation of Costa Coffee from Premier Inn, two landmark Whitbread brands. Analysts speculated that this was in response to the stake building from activist investor Elliott, a New York-based hedge fund.

The break up plans were enough to provide a boost for the Whitbread share price, but rumour has it that Whitbread shareholders, including Elliott, are not happy with the speed of the changes proposed. The Whitbread share price is still well below its all-time highs of £50, which it reached in early 2015.

Whitbread trading update – what to look out for

The Whitbread trading update may include more detail on the projected break up plan, but the real objective of the trading update is to focus investors on operational assets. Figures for the year to March 2018 saw sales grow 5.2% at Premier Inn with revenue per available room up 0.2%. Sales growth at Costa Coffee was up 7.5%, with UK assets up 7.3% and international assets up 8.5%. Stated group sales growth was 6% in March.

Analysts will also be watching out for updates on the strategic goals that were outlined by Brittain in April. These include the addition of 4000 to 4500 new rooms, part of a planned expansion in the German market. There is also the roll out of a joint venture for Costa Coffee in China and an ongoing £250 million cost saving program to consider.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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