24th Oct 2006 07:02
Whitbread PLC24 October 2006 24th October 2006 Whitbread PLC Good progress in delivering growth and improved performance Financial - Continuing Whitbread* • Total sales from Continuing Whitbread up 8.6% to £696.5m (2005/6: £641.6m) • Proforma growth in EPS from Continuing Whitbread up 12.0% • Continuing Whitbread like for like sales up 2.6 % • Interim dividend up 10.2% to 8.10p (2005/6: 7.35p) Statutory • Total Group sales £787.3m (2005/6: £803.3m) • Profit before tax and exceptional items from continuing operations up 20.8% to £109.8m (2005/6: £90.9m) • Total profit after tax £136.0m (2005/6: £100.8m) • Total basic EPS 56.2p (2005/6: 37.1p) • Adjusted basic pre-exceptional EPS on continuing operations 30.4p (2005/ 6: 22.1p) Key highlights • Premier Travel Inn sales up over 15%, Costa sales up over 21% • Announced disposal of Pub Restaurant solus sites for £497m with the disposal of 222 sites completed in the half • Announced second half exit from 50% Pizza Hut Joint Venture for £112m with net proceeds of £99m • £400m of disposal proceeds to be used to fund a return to shareholders (£350m) and a further payment to the Pension Fund (£50m) • Total return to shareholders since May 2005 of £1.16bn • Costa announces today expansion into Eastern Europe Anthony Habgood, chairman Whitbread PLC, said: "Following significant strategicchange Whitbread is entering a new era. We are clearly focused on the fourstrategic business units of Premier Travel Inn, Pub Restaurants, David LloydLeisure and Costa and the results we have announced today illustrate the goodprogress we are making in delivering growth and improved performance." Alan Parker, chief executive Whitbread PLC, said: "This is a very differentbusiness to the Whitbread of two years ago and we have worked hard to put thefoundations in place for sustainable growth. We have seen good performancesacross much of the Group and, where there are still areas of the business thathave performance challenges to address, we are confident that we have themanagement and the plans in place to drive operational excellence anddisciplined expansion." For further information contact: Whitbread Investor RelationsChristopher Rogers 01582 889 422 Whitbread Corporate CommunicationsAnna Glover 01582 844 439 Tulchan CommunicationsAndrew Grant / Miranda Acland 0207 353 4200 High resolution images are available for the media to view and downloadfree of charge from www.vismedia.co.uk A presentation for analysts will be held at London Stock Exchange, 10Paternoster Square, London. EC4M 7LS. Registration is from 9.00am; presentationis at 9.30am. A live audio webcast of the presentation will be available on theinvestors section of the website at: www.whitbread.co.uk. Alternatively, you canlisten live to the presentation by dialling: +44 (0) 207 162 0125 (participantsmust quote the "Whitbread Interim Results Conference" to connect). Theconference call will be available as a replay for one week. To listen dial innumber 020 7031 4064 and enter the passcode: 724170 * Continuing Whitbread Continuing Whitbread comprises Premier Travel Inn, the retained Pub Restaurantestate, David Lloyd Leisure, Costa and TGI Friday's but excludes the disposedPub Restaurant sites, the Pizza Hut joint venture and any supply chain sales tothird parties. £m H1 2006/7 H1 2005/6Statutory Group Sales 787.3 803.3Pub Restaurant: disposal estate (82.5) (103.5)Other (8.3) (58.2) Sales from Continuing Whitbread 696.5 +8.6% 641.6 Chief Executive's Review Total sales of Continuing Whitbread for the first six months grew year on yearby 8.6% to £696.5m. This growth was driven by a combination of outlet expansionacross our businesses, particularly at Premier Travel Inn and Costa where totalsales growth was 15.6% and 21.4% respectively. Like for like sales forContinuing Whitbread have grown by 2.6%. Profit before tax and exceptional items for the half year from continuingoperations was up 20.8% to £109.8m. On a proforma basis growth in earnings pershare is estimated by management as having grown by 12.0%. Once again Premier Travel Inn has delivered a strong performance as we continueto enhance the customer proposition and grow our UK network. We have opened1,312 new rooms in the half year and opened 11 new hotels. With the announcedsale of 239 solus pub restaurant sites we are now focused on building out thepipeline of 3,000 Premier Travel Inn rooms alongside pub restaurants. The joint site Whitbread pub restaurant and budget hotel drives both incrementalsales and cost synergies. In addition the combination provides enhanceddevelopment opportunities and industry leading returns. In our retained pub restaurants estate, whilst sales growth remained negativeduring the period, the rate of decline has slowed. Encouragingly, the Beefeatercovers growth that started in the final quarter of 2005/6 has continued withaverage weekly covers up by 4.5% in the first six months. This has been drivenby a combination of refreshed menus offering improved value and more stylish,aspirational environments. In Brewers Fayre, covers were in decline year on yearbut with very positive early indications from the new concept trial houses thathave opened in the first six months. Following a period of uncertainty as aresult of the partial disposal and the changes to the management team, thebusiness is now developing positive momentum. At David Lloyd Leisure we are encouraged that our actions have resulted in likefor like sales that are up by 2.2%. We continue to maintain membership levelsand are outperforming competitors in all key measures according to the latestresearch from the Deloitte Health Benchmark Survey. Retention continues toimprove and is up 1.7% year on year and now stands at 73%. Total membership nowstands at its highest ever level at 375,000. Encouragingly, new clubs opened inthe past 18 months are performing well including Aberdeen, which opened in thefirst half and already has over 3,000 members. The opening of 85 new stores in the first six months (57 in the UK and 28internationally) has helped drive Costa's total sales growth by 21.4% to £81.0mand profit by 32.6% to £5.7m. Strong UK like for like sales growth of 6.0% hasbeen driven by increased volume of customers in store, up 2.7% year to date andgreater food capture. We have announced today the expansion into the EasternEuropean market with new franchise agreements in place to launch the brand inPoland, Romania and Bulgaria. Next month we will open our 500th store in the UKand are on track to open c. 200 new stores by the full year with around 100 inthe UK and 100 internationally. Following our review of Pizza Hut and TGI Friday's we announced the sale of ourshare of the Pizza Hut UK joint venture. Subsequent to the half we have nowentered into formal discussions to explore the possibility of a sale of TGIFriday's. Today we are announcing that we will return a further £350m to shareholdersmaking a total since May 2005 of £1.16bn. As before, it is expected that thereturn will be structured as a bonus issue of C shares with a view to givingshareholders a choice between receiving the cash in the form of income orcapital, and, so far as possible, giving those who choose capital some choice asto when the return is made. The return will be accompanied by a shareconsolidation to maintain comparability of earnings per share and other companydata. A circular seeking shareholder approval for the return is expected to beissued in November 2006 and cash returned in the new year. At the same time as making this return we will be injecting a further £50m intothe Pension Fund. This payment is on top of the £50m paid into the fund inAugust 2006 in line with the announcement made in October 2005. The pension funddeficit in the balance sheet as at 31 August 2006 stood at £288m. The return announced today focuses solely on the proceeds from the PubRestaurants and Pizza Hut disposals. Developing an appropriate medium termfinancing structure remains a priority for the Group. We are on target to deliver the £25m cost savings announced last year and workis substantially complete to identify further savings following the announcementof the Pub Restaurant disposal in July. Outlook We have made good progress in the first half and have delivered a satisfactoryperformance through a combination of operational improvement, focused investmentand tight cost control. We are confident of further progress in the second half. Premier Travel Inn 2006/7 Change Sales £239.2m 15.6%Like-for-like sales 7.2%Operating Profit (Pre exceptionals) £84.3m 17.4%Operating Profit (Post exceptionals) £84.3m 17.4% Premier Travel Inn has delivered another outstanding performance in the firsthalf with total sales increasing by 15.6% from £206.9m to £239.2m. Operatingprofit in the half year increased by 17.4% from £71.8m to £84.3m. Like for like sales increased by 7.2%. 4.5% of this increase relates to rate/miximprovements, with the balance of 2.7% arising from new extensions, the maturityof new-build hotels and food and beverage sales. Premier Travel Inn continues to have the highest occupancy levels of anynational brand hotel chain in the UK with occupancy at 80%. Revenue peravailable room (RevPar) has grown by 3.6% to £38.42. During the first half we have made a strong start towards our target of 45,000rooms by 2010 with the opening of 1,312 new bedrooms (11 new sites), whichincludes the successful conversion of 988 Holiday Inn rooms. In March 2006 weopened our latest London hotel, the Premier Travel Inn Hampstead. This takes ourLondon hotels total inside the M25 to 43 hotels and a total of 5,169 bedrooms. Our joint venture with Emirates has secured the first site in Dubai to open a303 bed hotel in Dubai Investments Park. Construction will start in early 2007and we expect to open the hotel in 2008. We are on track to complete the roll out of the new Premier Travel Inn bedroomdesign by the end of 2008. Through technological improvements to our reservations system we have been ableto halve customer check-in time. We have also enhanced our business accountcard, which has delivered £39m of business in the first six months and there arenow 6,500 business account customers. The website continues to see strong booking growth with a 19% increase inbookings year on year; with c. 45 % of our bookings made direct via the web bythe end of the first half. Pub Restaurants 2006/7 Change Sales £296.6m (6.0)%Like-for-like sales* (1.2)%Retained estate sales £214.1m 0.9%Operating Profit (Pre exceptionals) £30.0m (23.7)%Operating Profit (Post exceptionals) £218.4m 455.7% * like for like sales excluding 235 disposal sites The new management team have developed plans for driving performance in our PubRestaurant business. These plans are focused around restructuring menus to offergood quality food over a wider range of price points and revitalising theenvironments. The results from the small number of re-modelled sites that havebeen converted this year have been encouraging, with weekly sales and meals soldincreasing significantly for both brands. The Beefeater covers growth that started in the final quarter of 2005/6 hascontinued with average weekly covers up by 4.5% in the first six months. Duringthe half year we converted 18 Beefeater houses; sales for these sites are up 23%year on year. A further 12 sites were converted by the end of September, whichare also performing well. Given the success of the conversion programme weintend to complete the remaining 57 Beefeaters by Easter 2007 at a cost of c.£400k per site. In Brewers Fayre, covers were in decline year on year but there are verypositive early indications from the re-modelled sites, three of which werecompleted in the half year and a further six during September bringing the totalto 11, including 2 sites converted last year. Sales during the half year of thefive trial sites are up by 41% year on year. A further 32 sites will bere-modelled during the second half at a cost of c. £400k per site. Additionally,in the first half we opened one new restaurant at Eastbourne, which is tradingahead of expectations. Following the announced sale of the 239 stand-alone pub restaurant sites wewill, as from the year end, be including income from breakfast sales in the PubRestaurants results. Previously this was included in the Premier Travel Innresults. In addition, we will be ending the practice of cross charging the PubRestaurants with an adjacency charge from the hotels. In the year to March 2006these two items in total would have amounted to £10.5m, which accrues fairlyevenly across the year, (see Finance Review). David Lloyd Leisure 2006/7 Change Sales £118.4m 5.7%Like-for-like sales 2.2%Operating Profit (Pre exceptionals) £21.1m 0.0%Operating Profit (Post exceptionals) £21.1m 0.0% The David Lloyd management team has outperformed its competitors with like forlike sales growth of 2.2%. This has been primarily achieved by continuedimprovement in retention, which is up 1.7% year on year at 73% (in the UK) and afocus on driving new member sales, which are up 2.3% year on year in like forlike UK clubs. Profit performance has been impacted somewhat by cost increasesin rates and utilities of £2.8m in the LfL business. In the UK the number of members is up by 13,000 to 325,000 and like for likenumber of members is up 4,000 to 311,000. Total membership now stands at itshighest ever at 375,000. New clubs opened in the past 12 months continue to perform ahead ofexpectations. Kings Hill in Kent and Southend, which opened last year have 5,600and 5,200 members respectively and Aberdeen, which opened in May 2006 alreadyhas over 3,000 members. Over the past six months the management team has put in a number of initiativesto ensure future growth including a re-structuring of management teams at clublevel; a programme for new members to inspire & motivate them to get the mostout of their membership; a new Weight Loss Management programme; new menus &Costa coffee throughout the estate; and the launch of the Tennis All StarProgramme in association with Andrew Murray. European clubs are performing well with record memberships of 50,000, which is arise of over 3,400. High Street Restaurants* 2006/7 Change Sales £126.3m 12.7%Like-for-like sales (excluding Pizza Hut) 1.2%Operating Profit (Pre exceptionals) £6.7m 17.5%Operating Profit (Post exceptionals) £6.4m 8.5% * High Street Restaurants includes Costa and TGI Friday's Costa continues to deliver strong performance and rapid outlet growth. Totalsales have increased by 21.4% to £81.0m. Like for like sales in the UK Retailbusiness were up by 6.0% driven primarily by volume growth of 2.7% and increasein food capture. Profit for the six months is up 32.6% to £5.7m. Underpinning this success are a number of new initiatives including there-imaging of a further 44 UK stores with a sales uplift of 11.8% and a new foodand beverage offer that is proving popular with customers and improving the sizeof each transaction. The re-imaged stores now cover over 60% of the estate andan additional 16 stores are set to undergo the re-image process by the fullyear. Costa is the first brand in the UK restaurant industry to have trialled a'stored value card'. Following the successful 22 store trial the new card willbe rolled out across 400 sites in November 2006. A combination of a pre-paiddebit and loyalty card, the new scheme makes it easier for customers to purchaseand drives customer loyalty. Each card can hold from £5 to £75 worth of storedvalue and can be topped up either in store or through an individual on-linecustomer account at www.costa.co.uk. In terms of expansion Costa has already opened 85 new stores year to date, whichincludes 57 in the UK and 28 internationally. The 500th store in the UK willopen in early November at Oxford. By the end of the financial year we expect tohave opened c. 200 stores - 100 in the UK and 100 internationally - making atotal of over 700 stores worldwide. We are also launching the Costa brand into Eastern Europe with franchise dealswith partners in Poland, Romania and Bulgaria. In TGI Friday's total sales have remained flat at £44.8m and like for like saleshave dropped by 4.8%. Finance Review 06/7 Half Year accounts Changes in Group Operations The first six months of 2006/7 has seen a number of major corporatetransactions. Marriott The disposal of Whitbread's Marriott business was completed on 21 April 2006. On 5 May 2005, Whitbread sold its Marriott business into a joint venturecompany, owned 50% each by Whitbread and subsidiaries of Marriott International,with a management contract held by Marriott International. On 21 April 2006, this Joint Venture company was sold to the Royal Bank ofScotland, with proceeds being returned to both Whitbread and MarriottInternational. Profit generated by the Joint Venture has been excluded from the consolidatedincome statement, as the Joint Venture assets were classified as held for sale. Note 3 lays out the impact of this in 2006/7. The carrying value of the JointVenture company was written down by £29.3m during 2005/6 with a further £33.1m,which has been recognised on completion in the period. Of the 7 properties retained by Whitbread outside of the Joint Venture, 3properties were sold during the period, generating a profit on disposal of£0.6m. Of the 4 remaining properties, 3 have been disposed of after thehalf-year, and as such have been treated as assets held for sale, with tradingheld in discontinued operations for the half year. The combined proceeds fromthese 3 sites will be £25.3m. As the final property is currently being marketed,this has also been treated as an asset held for sale at the half-year end, withits trading also held in discontinued operations for all periods presented. Stand-alone Pub Restaurants On 28 July 2006, Whitbread announced the sale of 235 trading pubs, together with4 sites not yet trading, to Mitchells & Butlers. The profit on disposal of the222 assets whose sale completed during the first half is laid out in note 4,with the sale of the remainder being completed early in the second half. The 2006/7 performance of Pub Restaurants includes 21 weeks of trading for thesites, whereas 2005/6 comparatives include a full 26 weeks of trading. As a result of the sale of its stand-alone estate, Whitbread has reviewed theaccounting arrangements between the Pub Restaurant division, and the PremierTravel Inn (PTI) division as they relate to Food and Beverage supply. Historically, profit arising from breakfast sales in Pub Restaurants next to PTIlodges has been accounted for within the PTI division, together with a share ofthe profit generated from PTI guests eating in the adjacent restaurant in theevening. These arrangements had allowed the Pub Restaurant division to comparethe economic performance of its stand- alone sites against those with anadjacent lodge. With the focus now on joint sites, the rationale for continuing with thesearrangements has gone, and we propose to remove them in our segmental businessreporting from the end of this financial year, with an appropriate restatementof our prior year comparatives. As at this half year, and as at the end of last year-end, the impact ofrestatement would have been as follows: Pro-forma EBIT restatement Premier Pub£m Travel Inn Restaurants Half year 2005/6 as reported 71.8 39.3Restatement -5.6 5.6half year 2005/6 pro-forma restated 66.2 44.9 Half year 2006/7 as reported 84.3 30.0Restatement -5.9 5.9half year 2006/7 pro-forma restated 78.4 35.9 Full year 2005/6 as reported 139.8 64.9Restatement -10.5 10.5Full year 2005/6 pro-forma restated 129.3 75.4 Pizza Hut On the 31 July, 2006, Whitbread announced its agreement to sell its 50%shareholding in Pizza Hut UK to Yum! Restaurants Holdings. The assets held by Whitbread in this Joint Venture have been classified as heldfor sale, and reported in discontinued operations. As a result, profit generatedby the joint venture has been excluded from the consolidated income statement asfrom the 3 March, and prior year income has been restated accordingly. The transaction was completed on 12 September 2006. Exceptional items As a result of the restructuring of Group & Head Office operations following thesale of Marriott, the business has incurred £8.9m of cost in the first half,together with recognising a £1.4m reduction in the carrying value of surplusoffice space due to be disposed of. We expect that a further c. £10m ofrestructuring costs will be incurred in the second half, following a furtherreorganisation that has taken place as a result of the Pub Restaurant disposals. Other material exceptional items include a £5.2m write-down in the carryingvalue of a loan to Swallow Hotels Ltd, part of the London & Edinburgh Group nowin administration. The loan arose from deferred consideration to Whitbreadfollowing the disposal of surplus hotel assets by Whitbread in 2004. Thiswrite-down reflects the entire loan, plus some outstanding interest owed,although we will continue to pursue the company for this sum as it receives theproceeds from the sale of assets. Note 4 outlines the exceptional items incurred by Whitbread, which includes theitems above, together with the net profit and/or loss arising from the disposalsof Pub Restaurant sites, the Marriott Joint Venture and the surplus hotel assetsdivested separately from the Marriott Joint Venture. Interest & Net Financing Costs Total net financing costs for the half were £20.5m as compared to £34.0m in thefirst half of 2005/6. This year on year decline was driven by three factors: alower level of average debt over the half, a relative improvement in the pensionfinance charge, and a small one-off benefit driven by the revaluation of aninterest hedge. Taxation The tax charge on profit for the interim period has been calculated by applyingthe forecast effective tax rate for the current year. The UK tax expense of £124.7m, including deferred tax, represents an effectiverate of 32.9% on continuing operations, pre exceptional items, as compared to34.0% for the half-year 2005/6. This total also includes an £81.8m deferred taxcharge relating to the stand-alone Pub Restaurant asset disposal. Earnings per Share Adjusted basic earnings per share for underlying profit for the interim periodwas 30.72p, as compared to 32.17p last year. On a continuing basis, adjustedbasic earnings per share for underlying profit has grown by 37.8%, from 22.09pto 30.43p. The detail can be found in note 6 to the financial statement. With interest not being apportioned between continuing and discontinuingbusinesses the growth in earnings per share calculated above is unhelpful.Management have therefore performed their own calculation to derive a growth inearnings per share for Continuing Whitbread and estimate this at 12.0%. Thebasis of the calculation has been to take an estimate of operating profit forContinuing Whitbread and notionally adjust for the interest cost of the capitalreturns. Dividend An interim dividend of 8.10p per share, an increase of 10.2% over last year,will be paid on 2 January, 2007 to all shareholders on the register at the closeof business on 3 November 2006. Capital Expenditure Total Group cash capital expenditure on property, plant & equipment andintangible assets was £125.3m, including £38.9m spent on 7 going concern HolidayInn properties currently being re-branded to Premier Travel Inn. This is split £32.3 and £93.0m between maintenance and acquisition expenditure. Forecast capex for the full year is anticipated to be around £280m. Financing Net debt stood at £660.9m at the half year, as compared to £1,122.6m at the samepoint in the previous year, and £970.3m at the end of fiscal year 2005/6. The c.£309m reduction in net debt since the end of the previous fiscal year is largelydue to the excess of receipts of £723.6m from business & asset disposals, less a£391.6m return of capital to shareholders, and a £50m payment into the PensionFund, being used to pay down debt. Pensions As at 31 August 2006, the gross pension fund deficit in the balance sheet stoodat £288m (net deficit after deferred tax £202m). This is £85m lower than at theprevious half-year, and £50m lower than at the year-end. In line with themeasures announced last September, £50m was injected into the fund during thefirst half. Whitbread PLC Consolidated income 6 months to 31 August 2006 6 months to 1 September 2005 (restated) statement (restated) Notes Before Exceptional Total Before Exceptional Total Year to exceptional items exceptional items 2 March items (note 4) items (note 4) 2006Continuing £m £m £m £m £m £m £moperations: Revenue 2 787.3 - 787.3 803.3 - 803.3 1,584.0Cost of sales (119.9) - (119.9) (151.2) - (151.2) (295.7) ------- ------ ------- ------- ------ ------ -------Gross profit 667.4 - 667.4 652.1 - 652.1 1,288.3 Distributioncosts (473.4) (0.3) (473.7) (453.0) 0.2 (452.8) (919.1)Administrativeexpenses (63.8) (10.3) (74.1) (75.2) - (75.2) (177.4) ------- ------ ------- ------- ------ ------ -------Operatingprofit 2 130.2 (10.6) 119.6 123.9 0.2 124.1 191.8 Share ofprofit fromjoint ventures 0.1 - 0.1 0.3 - 0.3 0.3Share ofprofit fromassociates 0.4 - 0.4 0.1 - 0.1 0.9 ------- ------ ------- ------- ------ ------ -------Operatingprofit of theGroup, jointventures andassociates 130.7 (10.6) 120.1 124.3 0.2 124.5 193.0 Non-operatingitems+:Net loss ondisposal ofbusiness andinvestments - - - - - - (8.8)Net profit ondisposal ofpubrestaurants - 188.1 188.1 - - - - ------- ------ ------- ------- ------ ------ -------Profit beforefinancing andtax 130.7 177.5 308.2 124.3 0.2 124.5 184.2 Finance costs (21.5) - (21.5) (33.6) - (33.6) (89.5)Finance revenue 0.6 - 0.6 0.2 - 0.2 1.2 ------- ------ ------- ------- ------ ------ -------Profit beforetax 109.8 177.5 287.3 90.9 0.2 91.1 95.9 Tax expense (36.1) (79.7) (115.8) (30.9) - (30.9) (44.2) ------- ------ ------- ------- ------ ------ -------Net profitfromcontinuingactivities 73.7 97.8 171.5 60.0 0.2 60.2 51.7 Discontinuedoperations: ------- ------ ------- ------- ------ ------ -------Netprofit/(loss)on disposal ofbusinesses - (32.5) (32.5) - 11.4 11.4 208.1Profit/(loss)for the periodfromdiscontinuedoperations 0.7 (3.7) (3.0) 27.5 1.7 29.2 4.6 ------- ------ ------- ------- ------ ------ ------- 3 0.7 (36.2) (35.5) 27.5 13.1 40.6 212.7 ------- ------ ------- ------- ------ ------ -------Profit for theperiod 74.4 61.6 136.0 87.5 13.3 100.8 264.4 ------- ------ ------- ------- ------ ------ ------- Attributableto:Parentshareholders 74.4 61.6 136.0 87.4 13.3 100.7 264.3Equityminorityinterest - - - 0.1 - 0.1 0.1 ------- ------ ------- ------- ------ ------ ------- 74.4 61.6 136.0 87.5 13.3 100.8 264.4 ------- ------ ------- ------- ------ ------ ------- Dividends proposed per share inrespect of the period (pence)Special - 135.00 135.00Special - Bshare 155.00 - -Interim 8.10 7.35 7.35Final - - 19.95 ------- ------ ------- Earnings per share (pence) Continuing Total Continuing Total Total 6 Operations operations operations operations operations - basic forprofit for theperiod 70.81 56.15 22.16 37.06 99.85- basic forunderlyingprofit # 30.43 30.72 22.09 32.17 56.67- diluted forprofit for theperiod 70.37 55.81 21.95 36.73 99.03- diluted forunderlyingprofit # 30.24 30.53 21.88 31.87 56.20 + Non-operating items are those that are not part of the regular operations ofthe Group. # Underlying profit is net profit from activities before exceptional items,these being impairment of property, plant and equipment, impairment of goodwill,impairment of intangibles, reorganisation costs, net profit on disposal of fixedassets, net profit on disposal of businesses and investments, interest charge onearly redemption of debentures, provision for loan write down and othermaterial, non-recurring items. Consolidated statement of recognised income and expense (restated) 6 months to 6 months to Year to 31 August 1 September 2 March 2006 2005 2006 £m £m £m Cash flow and net investment hedges:Gains/(losses) taken to equity 0.8 (1.2) (0.3)Exchange differences on translation offoreign operations (0.3) (0.5) 1.4Actuarial losses on defined benefitpension schemes (3.8) (72.8) (93.5)Tax on items taken directly to or fromequity 15.6 6.4 28.6 ------- -------- -------Net gain/(loss) recognised directly inequity 12.3 (68.1) (63.8) Profit for the period 136.0 100.8 264.4 ------- -------- -------Total recognised income and expense forthe period 148.3 32.7 200.6 ------- -------- ------- Attributable to: Parent shareholders 148.3 32.6 200.5Equity minority interest - 0.1 0.1 ------- -------- ------- 148.3 32.7 200.6 ------- -------- ------- Consolidated balance sheet (restated) Notes 31 August 1 September 2 MarchASSETS 2006 2005 2006 £m £m £mNon-current assetsIntangible assets 75.7 94.8 79.0Property, plant and equipment 2,486.4 2,665.7 2,677.1Investment in joint ventures - 46.1 35.2Investment in associates 0.9 10.9 0.8Other financial assets 0.2 12.7 5.4Derivative financial instruments 66.6 88.0 78.5 ------- ------- ------- 2,629.8 2,918.2 2,876.0 ------- ------- ------- Current assetsInventories 14.4 20.4 17.5Trade and other receivables 64.6 157.7 119.0Income tax prepayment - - 21.0Derivative financial instruments 9.9 11.6 10.2Cash and cash equivalents 7 70.8 28.1 49.6 ------- ------- ------- 159.7 217.8 217.3 ------- ------- -------Assets classified as held for sale 79.9 342.0 302.6 ------- ------- -------TOTAL ASSETS 2,869.4 3,478.0 3,395.9 ------- ------- ------- LIABILITIES Current liabilitiesFinancial liabilities 183.8 437.7 145.1Provisions 5.3 0.5 0.6Derivative financial instruments 1.0 2.2 0.3Trade and other payables 291.4 301.0 277.8Income tax payable 14.8 11.1 - ------- ------- ------- 496.3 752.5 423.8 ------- ------- ------- Non-current liabilitiesFinancial liabilities 547.9 713.0 874.8Minority owned preference shares 3.1 3.1 3.1Provisions 26.0 36.1 32.5Derivative financial instruments 0.7 2.9 3.0Deferred income tax liabilities 247.3 206.2 174.2Pension liability 288.0 373.0 338.0 ------- ------- ------- 1,113.0 1,334.3 1,425.6 ------- ------- ------- ------- ------- -------TOTAL LIABILITIES 1,609.3 2,086.8 1,849.4 ------- ------- ------- ------- ------- -------NET ASSETS 1,260.1 1,391.2 1,546.5 ------- ------- ------- EQUITY Issued capital 151.5 150.3 151.1Share premium 39.6 29.1 36.1Retained earnings 2,896.0 3,059.7 3,193.0Currency translation 2.0 - 1.7Other reserves (1,831.8) (1,850.7) (1,838.2) ------- ------- -------Equity attributable to equityholders of the parent 8 1,257.3 1,388.4 1,543.7 Equity minority interest 2.8 2.8 2.8 ------- ------- -------TOTAL EQUITY 1,260.1 1,391.2 1,546.5 ------- ------- ------- Consolidated cash flow statement (restated) 6 months to 6 months to Year to Notes 31 August 1 September 2 March 2006 2005 2006 £m £m £m Profit for theperiod 136.0 100.8 264.4 Adjustments for:Taxation charged on totaloperations 124.7 33.8 39.2Net finance cost 20.5 34.0 89.0Total income from joint ventures (0.1) (3.0) (6.3)Total income fromassociates (0.4) (10.3) (10.3)Profit on disposal ofproperty, plant andequipment (188.4) (1.9) (3.0)Net (profit)/losson disposal of businesses and investments 23.9 (11.4) (191.7)Impairment loss onrevaluation ofCondor joint venture - - 29.3Depreciation andamortisation 52.4 56.8 118.8Impairment of property and goodwill - - 35.2Reorganisation costs 1.4 - 13.3Other non-cash items 3.7 1.1 2.8 ------- -------- -------Operating profit beforeworking capital changes 173.7 199.9 380.7 (Increase)/decrease ininventories 3.1 (0.6) 2.3(Increase)/decrease in trade and otherreceivables 57.7 (64.3) (18.3)Increase/(decrease) in trade and otherpayables 8.1 15.7 (10.3)Payments against provisions (0.6) (0.8) (16.6)Payments to pension fund (56.0) (55.0) (103.0) ------- -------- -------Cash generated fromoperations 186.0 94.9 234.8 Interest paid (18.2) (27.6) (91.5)Taxes paid (2.4) (25.1) (40.7) ------- -------- ------Net cash flows from operatingactivities 165.4 42.2 102.6 ------- -------- ------ Cash flows from investingactivities Disposal of investmentsand subsidiaries - discontinued* 251.5 724.8 889.2Disposal of investmentsand subsidiaries - continuing* - - 6.9Net cash disposed of - (14.1) (18.2)Purchase of property, plant andequipment (125.3) (132.6) (228.6)Purchase of investments and loans advanced - (1.4) -Purchase of intangible assets - (1.0) (1.6)Proceeds from disposal ofproperty, plant and equipment 454.9 17.1 12.0Acquisition of subsidiary,net of cash acquired (2.7) - (0.2)Dividends from joint venture - - 11.1Dividends from associates 0.2 45.1 71.6Interest received 0.9 0.7 1.5 ------- -------- ------Net cash flows from investingactivities 579.5 638.6 743.7 ------- -------- ------ Cash flows from financingactivities Proceeds from issue of sharecapital 3.8 6.6 14.4Cost of purchasing ownshares (127.2) - (9.5)Increase/(decrease) inshort-term borrowings 21.3 (5.1) 6.1Proceeds from long-termborrowings - 200.0 610.0Issue costs of long-termborrowings - (0.4) (1.4)Repayment of long-termborrowings (323.1) (464.7) (1,013.0)Equity dividends paid 5 (315.7) (456.6) (475.5)Dividends paid to minorityinterests - (0.1) - ------- -------- ------Net cash flows used infinancing activities (740.9) (720.3) (868.9) ------- -------- ------Net increase in cash andcash equivalents 4.0 (39.5) (22.6)Net foreign exchangedifference (0.1) (1.0) 0.6Opening cash and cashequivalents 30.1 52.1 52.1 ------- -------- ------Closing cash and cashequivalents 7 34.0 11.6 30.1 ------- -------- ------Reconciliation to cash and cashequivalents on the balance sheet:Cash and cash equivalentsshown above 34.0 11.6 30.1Add back overdrafts 36.8 16.5 19.5 ------- -------- ------Cash and cash equivalentsshown within current assetson the balance sheet 70.8 28.1 49.6 ------- -------- ------* including disposed of net overdraft Notes to the accounts 1. Basis of accounting and preparation The interim results announcement is prepared in accordance with the IFRSaccounting policies expected to apply at 1 March 2007 and which were applied at2 March 2006. As permitted, this interim report has been prepared in accordance with UKlisting rules and not in accordance with IAS 34 'Interim Financial Reporting'. Comparative periods have been restated to reflect the following changes inaccounting treatment: - where operations have subsequently been classified as discontinued, priorperiods have been restated to present the income statements of those operationswithin discontinued operations (see note 3); - the Group's share of profit from joint ventures for the prior year half yearhas been restated to correct for the change in interpretation of IFRSimplemented in our 2005/06 financial statements which reversed the previousequity accounting treatment of Condor; - deferred tax and reserves have been restated as a result of reconsidering theeffect of the requirements of IAS 12 on the calculation of deferred tax inrespect of properties acquired as part of a business combination. The financial information for the year ended 2 March 2006 is extracted from thestatutory accounts of the Group for that year and does not constitute statutoryaccounts as defined in Section 240 of the Companies Act 1985. These publishedaccounts were reported on by the auditors without qualification or statementunder Sections 237(2) or (3) of the Companies Act 1985 and have been deliveredto the Registrar of Companies. The interim accounts for the six months ended 31 August 2006 and thecomparatives to 1 September 2005 are unaudited but have been reviewed by theauditors, a copy of the review report is included at the end of this report. 2. Segmental analysis Included within unallocated operations are those that are managed by a centraldivision. Half year ended 31 August 2006 Premier High David Total Dis- Travel Pub Street Lloyd Un- Elimi- continuing continued Total Inn Restaurants Restaurants Leisure allocated nation operations operations operations £m £m £m £m £m £m £m £m £m RevenueRevenue fromexternalcustomers 239.2 296.6 124.8 118.4 8.3 - 787.3 13.9 801.2Inter-segmentrevenue - - 1.5 - - (1.5) - - - -------- -------- -------- -------- -------- -------- -------- -------- --------Total revenue 239.2 296.6 126.3 118.4 8.3 (1.5) 787.3 13.9 801.2 -------- -------- -------- -------- -------- -------- -------- -------- --------EBIT# 84.3 30.0 6.7 21.1 (11.4) - 130.7 0.6 131.3 -------- -------- -------- -------- -------- -------- -------- -------- --------EBIT# 84.3 30.0 6.7 21.1 (11.4) - 130.7 0.6 131.3Segment exceptionalitems:- Netprofit/(loss)on disposal ofproperty,plant andequipment - 0.3 (0.3) - (0.3) - (0.3) 1.5 1.2- Provisionfor loan writedown - - - - - - - (5.2) (5.2)-Reorganisation - - - - (10.3) - (10.3) - (10.3)Share ofprofit fromjoint ventures (0.1) - - - - - (0.1) - (0.1)Share ofprofit fromassociates (0.4) - - - - - (0.4) - (0.4) -------- -------- -------- -------- -------- -------- -------- -------- --------Segment result 83.8 30.3 6.4 21.1 (22.0) - 119.6 (3.1) 116.5 -------- -------- -------- -------- -------- -------- -------- -------- --------Operatingprofit/(loss) 119.6 (3.1) 116.5 Share ofprofitfromjoint ventures 0.1 - - - - - 0.1 - 0.1Share ofprofit fromassociates 0.4 - - - - - 0.4 - 0.4 -------- -------- --------Operatingprofit of the Group, joint ventures andassociates 120.1 (3.1) 117.0Non-operatingexceptionals:Net loss ondisposal ofbusinesses - - - - - - - (23.9) (23.9)Net profit on disposal of pubrestaurants - 188.1 - - - - 188.1 - 188.1 -------- -------- -------- Profit beforefinancing andtax 308.2 (27.0) 281.2 Net financecosts (20.9) 0.4 (20.5) -------- -------- --------Profit beforeincome tax 287.3 (26.6) 260.7 Income taxexpense (115.8) (8.9) (124.7) -------- -------- --------Net profit forthe year 171.5 (35.5) 136.0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------Net assets 1,179.7 559.8 106.1 547.8 (607.1) - 1,786.3 59.9 1,846.2 -------- -------- -------- -------- -------- -------- -------- -------- -------- # EBIT shows the segment result adjusted for exceptional items. It is profitbefore financing and tax and exceptional items. Half year ended 1 September 2005 (restated) Premier High David Total Dis- Travel Pub Street Lloyd Un- Elimi- continuing continued Total Inn Restaurants Restaurants Leisure allocated nation operations operations operations £m £m £m £m £m £m £m £m £m RevenueRevenue fromexternalcustomers 206.9 315.6 110.6 112.0 58.2 - 803.3 89.8 893.1Inter-segmentrevenue - - 1.5 - - (1.5) - - - -------- -------- -------- -------- -------- -------- -------- -------- --------Total revenue 206.9 315.6 112.1 112.0 58.2 (1.5) 803.3 89.8 893.1 -------- -------- -------- -------- -------- -------- -------- -------- --------EBIT# 71.8 39.3 5.7 21.1 (13.6) - 124.3 31.0 155.3 -------- -------- -------- -------- -------- -------- -------- -------- --------EBIT# 71.8 39.3 5.7 21.1 (13.6) - 124.3 31.0 155.3Segment exceptionalitems:- Net profit on disposal ofproperty,plant andequipment - - 0.2 - - - 0.2 1.7 1.9Share ofprofit fromjoint ventures (0.3) - - - - - (0.3) (2.7) (3.0)Share of(profit)/lossfromassociates (0.3) - - 0.2 - - (0.1) (10.2) (10.3) -------- -------- -------- -------- -------- -------- -------- -------- --------Segment result 71.2 39.3 5.9 21.3 (13.6) - 124.1 19.8 143.9 -------- -------- -------- -------- -------- -------- -------- -------- --------Operatingprofit 124.1 19.8 143.9 Share ofprofit fromjoint ventures 0.3 - - - - - 0.3 2.7 3.0Share ofprofit/(loss)fromassociates 0.3 - - (0.2) - - 0.1 10.2 10.3 -------- -------- --------Operatingprofit of the Group, jointventures andassociates 124.5 32.7 157.2Non-operatingexceptionals:Net profiton disposal ofbusinesses andinvestments - - - - - - - 11.4 11.4 -------- -------- --------Profit beforefinancing and tax 124.5 44.1 168.6 Net financecosts (33.4) (0.6) (34.0) -------- -------- --------Profit beforeincome tax 91.1 43.5 134.6 Income taxexpense (30.9) (2.9) (33.8) -------- -------- --------Net profit forthe year 60.2 40.6 100.8 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------Net assets 1,095.0 828.8 93.6 556.1 (485.7) - 2,087.8 423.6 2,511.4 -------- -------- -------- -------- -------- -------- -------- -------- -------- # EBIT shows the segment result adjusted for exceptional items. It is profitbefore financing and tax and exceptional items. Year ended 2 March 2006 (restated) Premier High David Total Dis- Travel Pub Street Lloyd Un- Elimi- continuing continued Total Inn Restaurants Restaurants Leisure allocated nation operations operations operations £m £m £m £m £m £m £m £m £m RevenueRevenue fromexternalcustomers 407.8 605.0 232.4 224.6 114.2 - 1,584.0 108.2 1,692.2Inter-segmentrevenue - - 2.7 - - (2.7) - - - -------- -------- -------- -------- -------- -------- -------- -------- --------Total revenue 407.8 605.0 235.1 224.6 114.2 (2.7) 1,584.0 108.2 1,692.2 -------- -------- -------- -------- -------- -------- -------- -------- --------EBIT# 139.8 64.9 17.3 41.3 (25.4) - 237.9 35.3 273.2 -------- -------- -------- -------- -------- -------- -------- -------- --------EBIT# 139.8 64.9 17.3 41.3 (25.4) - 237.9 35.3 273.2Segment exceptionalitems:- Netprofit/(loss)on disposal ofproperty,plant andequipment 0.3 1.5 (0.7) - - - 1.1 1.9 3.0- Impairmentof propertyand goodwill - (5.7) (3.9) (18.3) (7.3) - (35.2) - (35.2)-Reorganisation - - - - (10.8) - (10.8) - (10.8)Share ofprofit fromjoint ventures (0.3) - - - - - (0.3) (6.0) (6.3)Share ofprofit fromassociates (0.6) - - (0.3) - - (0.9) (9.4) (10.3) -------- -------- -------- -------- -------- -------- -------- -------- --------Segment result 139.2 60.7 12.7 22.7 (43.5) - 191.8 21.8 213.6 -------- -------- -------- -------- -------- -------- -------- -------- --------Operatingprofit 191.8 21.8 213.6 Share ofprofit fromjoint ventures 0.3 - - - - - 0.3 6.0 6.3Share ofprofit fromassociates 0.6 - - 0.3 - - 0.9 9.4 10.3 -------- -------- --------Operatingprofit of theGroup, jointventures andassociates 193.0 37.2 230.2Non-operatingexceptionals:Netprofit/(loss)on disposal ofbusinesses andinvestments - (1.1) (0.1) (3.7) (3.9) - (8.8) 200.5 191.7Impairmentloss onrevaluation ofCondor jointventure - - - - - - - (29.3) (29.3) -------- -------- --------Profit beforefinancing andtax 184.2 208.4 392.6 Net financecosts (88.3) (0.7) (89.0) -------- -------- --------Profit beforeincome tax 95.9 207.7 303.6 Income taxexpense (44.2) 5.0 (39.2) -------- -------- --------Net profit forthe year 51.7 212.7 264.4 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------Net assets 1,104.3 820.9 92.6 529.1 (478.2) - 2,068.7 362.7 2,431.4 -------- -------- -------- -------- -------- -------- -------- -------- -------- # EBIT shows the segment result adjusted for exceptional items. It is profitbefore financing and tax and exceptional items. 3. Discontinued operations On 21 April 2006 Whitbread completed the sale of the Marriott joint venture tothe Royal Bank of Scotland. The Group's share of the proceeds was £217.6m. Thetransaction resulted in a loss on disposal for the Group of £33.1m in thecurrent period. On 8 May 2006 the preference and ordinary shares held byMarriott International in Condor 2 were redeemed. As a result Condor 2 became awholly owned subsidiary of Whitbread PLC. Outside of the JV, Whitbread retained its investment in a further seven of theoriginal properties of which three have been sold during the period resulting ina profit on disposal of £0.6m. Three further hotels have been disposed of after the period end for combinedtotal proceeds of £25.3m and have been classified as held for sale at the halfyear end. The remaining property is classified as held for sale. As part of the preliminary results announcement made on 25 April 2006 the Groupannounced its intention to review the size and nature of its investment in PizzaHut UK Limited and a decision was taken to dispose of the investment; as such ithas been classified as a discontinued operation. Prior periods presented inthese financial statements have been restated to reflect its status as adiscontinued operation. The investment has been classified as held for sale atthe period end. On 12 September 2006 Whitbread sold its 50% investment in PizzaHut UK Limited to Yum! Restaurants Holdings for an agreed value of £112m. Afteradjustments for debt and other liabilities £99m in cash was received. All the properties and investments described above have been reported withindiscontinued operations for the periods presented. The effect of the disposals during the period is as follows: £mSale proceeds 260.8Total net assets sold (275.4)Costs of disposal (9.3) ------- (23.9)Tax effect of disposal (8.6) -------Loss on disposal (32.5) ------- Sale proceeds are made up as follows: £m Cash 260.8 ------- Total net assets sold comprises the following Totalassets: £mInvestment in joint venture 234.6Fixed assets 31.9Investment in associate 8.9 -------Total assets sold 275.4 ------- Discontinued operations during the period are made up asfollows: (restated) (restated) 6 months to 31 6 months to 1 Year to 2 March August 2006 September 2005 2006 £m £m £m Revenue 13.9 89.8 108.2Cost of sales (8.6) (18.2) (27.0) -------- -------- -------Gross profit 5.3 71.6 81.2 Distribution costs (3.1) (46.6) (53.2)Administrative expenses (1.6) (6.9) (8.1)Non-recurring items: -------- -------- -------Provision for loan write down (note 4) (5.2) - -Net release of provision 0.9 - -Profit on disposal of property,plant and equipment 0.6 1.7 1.9 -------- -------- ------- (3.7) 1.7 1.9 -------- -------- -------Operating profit/(loss) (3.1) 19.8 21.8 Share of profit from joint ventures - 2.7 6.0Share of profit from associates - 10.2 9.4 Non-recurring items:Net profit/(loss) on disposal ofbusinesses (23.9) 11.4 200.5Impairment loss on valuation ofCondor joint venture - - (29.3) -------- -------- -------Profit/(loss) before financing andtax (27.0) 44.1 208.4 Finance costs - (1.2) (1.5)Finance income 0.4 0.6 0.8 -------- -------- -------Profit/(loss) before tax (26.6) 43.5 207.7 Income tax expense:- related to pre-tax profit (0.3) (2.9) (2.6)- related to profit/(loss) on disposal (8.6) - 7.6 -------- -------- -------Net profit/(loss) fromdiscontinued operations (35.5) 40.6 212.7 -------- -------- -------Assets classified as held for sale: The major classes of assets classified as held for sale and measured at lower ofcarrying amount and fair value less cost to sell are: 31 August 2006 1 September 2 March 2006 2005 £m £m £m Property, plant and equipment 47.6 68.6 58.0Investment in joint venture 29.8 273.4 234.6Investment in associate 2.5 - 10.0 ------- -------- -------Total 79.9 342.0 302.6 ------- -------- ------- 4. Exceptional items 6 months to 31 6 months to 1 Year to 2 March August 2006 September 2005 2006 £m £m £mContinuing activities:Reorganisation costs 1 (10.3) - (10.8)Impairment of goodwill - - (5.8)Impairment of intangible assets - - (7.3)Impairment of property, plant and equipment - - (22.1)Net loss on disposal of business and investment - - (8.8)Net profit/(loss) on disposal of property, plant andequipment (0.3) 0.2 1.1Net profit on disposal of pub restaurants 2 188.1 - -Interest cost of early redemption of debentures - - (25.5) ------- -------- ------- 177.5 0.2 (79.2) ------- -------- -------Tax on continuing exceptional items (79.7) - 12.8 ------- -------- ------- 97.8 0.2 (66.4) ------- -------- -------Discontinued activities:Net profit/(loss) on disposal of businesses(note 3) (23.9) 11.4 200.5Impairment loss on revaluation of Condor jointventure - - (29.3)Provision for loan write down 3 (5.2) - -Net profit on disposal of property, plant andequipment 0.6 1.7 1.9Net release of provision 0.9 - - ------- -------- ------- (27.6) 13.1 173.1 ------- -------- -------Tax on discontinued exceptional items (8.6) - 7.6 ------- -------- ------- (36.2) 13.1 180.7 ------- -------- -------Total exceptional items 61.6 13.3 114.3 ------- -------- ------- 1 During 2005/06 the Board instigated a fundamental reorganisation of all centralsupport functions and the financial impact of the decision taken then hascontinued into the current period. In addition the announced disposal of 235pubs led to a further restructuring during the period to reflect the resultantshape of the Group. The costs of this reorganisation have been reported inadministrative expenses. The costs principally relate to redundancy, closurecosts and a pension curtailment credit. 2 During the period 222 trading pubs, together with four sites not yet trading,have been disposed of to Mitchells & Butlers resulting in a profit on disposalafter costs of £188.1m. 3 As a result of Swallow Hotels Limited going into administration we haveprovided for the deferred consideration on the sale of Swallow branded hotelsduring 2003/04. We continue to pursue the outstanding balance and are liaisingwith the administrators in this matter. 5. Dividends paid 31 August 2006 1 September 2 March 2006 2005 £m £m £mDeclared and paid in the period:Equity dividends on ordinary shares:Special dividend - 135.0 pence - 402.0 402.0B share dividend - 155.0 pence 264.4 - -Final dividend for 2005/06 - 19.95 pence 51.3 54.6 54.62004/05: 18.35 pence)Interim dividend for 2005/06 - 7.35 pence - - 18.9(2004/05: 6.90 pence) -------- --------- ------- 315.7 456.6 475.5 -------- --------- ------- 6. Earnings per share Basic earnings per share is calculated by dividing net profit for the periodattributable to ordinary shareholders of £136.0m (2005: £100.7m) by the weightedaverage number of ordinary shares in issue during the period, 242.2m (2005:271.7m). Adjusted earnings per share is calculated as follows: Earnings (£m) Earnings per share (p) ------------------ ------------------ (restated) (restated) (restated) (restated) 6 months to 6 months to Year to 6 months to 6 months to Year to 31 August 1 September 2 March 31 August 1 September 2 March 2006 2005 2006 2006 2005 2006 ------- ------- ------ ------- ------- -------Totaloperations Earnings andbasic earningsper share 136.0 100.7 264.3 56.15 37.06 99.85Earnings andbasic earningsper shareattributableto:Exceptionalitems (149.9) (13.3) (93.9) (61.89) (4.89) (35.47)Tax onexceptionalitems 88.3 - (20.4) 36.46 - (7.71) ------- ------- ------ ------- ------- -------Underlyingprofit andbasic earningsper share forprofit for theperiod 74.4 87.4 150.0 30.72 32.17 56.67 ------- ------- ------ ------- ------- ------- Continuingoperations Earnings andbasic earningsper share 171.5 60.2 51.7 70.81 22.16 19.53Earnings andbasic earningsper shareattributableto:Exceptionalitems (177.5) (0.2) 79.2 (73.29) (0.07) 29.92Tax onexceptionalitems 79.7 - (12.8) 32.91 - (4.84) ------- ------- ------ ------- ------- -------Underlyingprofit andbasic earningsper share forprofit for theperiod 73.7 60.0 118.1 30.43 22.09 44.61 ------- ------- ------ ------- ------- ------- Discontinuedoperations Earnings andbasic earningsper share (35.5) 40.5 212.6 (14.66) 14.90 80.32Earnings andbasic earningsper shareattributableto:Exceptionalitems 27.6 (13.1) (173.1) 11.40 (4.82) (65.39)Tax onexceptionalitems 8.6 - (7.6) 3.55 - (2.87) ------- ------- ------ ------- ------- -------Underlyingprofit andbasic earningsper share forprofit for theperiod 0.7 27.4 31.9 0.29 10.08 12.06 ------- ------- ------ ------- ------- ------- Diluted earnings per share and diluted adjusted basic earnings per share areafter allowing for the dilutive effect of the conversion into ordinary shares ofthe weighted average number of options outstanding during the period. The numberof shares used for the diluted and adjusted diluted calculation is 243.7m (2005:274.2m). m --------Weighted average number of ordinaryshares for the purposes of earningsper share 242.2 Effect of dilutive potential ordinary shares:Share options - number of shares tobe issued for nil consideration 1.5 --------Weighted average number of ordinaryshares for the purposes of dilutiveearnings per share 243.7 -------- 7. Movements in cash and net debt Amortisation Fair value 2 March Loans Foreign of premiums adjustments 31 August 2006 acquired Cash flow exchange and discounts to loan capital 2006 £m £m £m £m £m £m £m --------- ------Cash andcash equivalents 49.6 70.8Overdrafts (45.3) (83.9) --------- ------ 4.3 - (17.3) (0.1) - - (13.1)Lessshort-termbankborrowings 25.8 - 21.3 - - - 47.1 --------- ------ ------ ------- -------- -------- ------Cash andcash 30.1 - 4.0 (0.1) - - 34.0equivalents Short-termbankborrowings (25.8) - (21.3) - - - (47.1) --------- ------Loancapital (99.8) (99.9)under oneyearLoancapital (874.8) (547.9)over one --------- ------yearTotal loancapital (974.6) (9.1) 323.1 (0.2) 0.5 12.5 (647.8) --------- ------ ------ ------- -------- -------- ------Net debt (970.3) (9.1) 305.8 (0.3) 0.5 12.5 (660.9) --------- ------ ------ ------- -------- -------- ------ 8. Shareholders' funds (restated) 6 months to 6 months to Year to 31 August 1 September 2 March 2006 2005 2006 £m £m £m Total equity attributable to parentshareholders at beginning of period aspreviously reported 1,543.7 1,810.3 1,810.3 Effect of adopting IAS 32 & 39 - (0.9) (0.9) -------- -------- --------Total equity attributableto parent shareholders at beginningof period (restated) 1,543.7 1,809.4 1,809.4 Total recognised income andexpense for the period 148.3 32.6 200.5 Accrued share based payments 2.8 (3.6) 7.4Reimbursement of cost of ESOT sharespurchased 1.2 - -Ordinary shares issued 3.8 6.6 14.4B shares issued 0.1 - - Own shares purchased (127.2) - (9.5)Movement in associates reserves 0.3 - (3.0)Equity dividends paid (note 5) (315.7) (456.6) (475.5) -------- -------- -------Total equity attributable to parentshareholders at end of period 1,257.3 1,388.4 1,543.7 -------- -------- ------- 9. Post balance sheet events On 31 July 2006 the Group announced an agreement to sell its 50% investment inPizza Hut UK Limited to Yum! Restaurants Holdings. The value agreed for the 50%interest was £112m. On 12 September 2006 the Group received £99m in cash beingthe agreed sale price less adjustments for debt and other liabilities. Since the half year end the Group has disposed of a further three hotels thatare part of the Marriott sale process outside of the joint venture with MarriottInternational. See note 3 for further details. An interim dividend of 8.10p per share (2005: 7.35p) amounting to a dividend of£17.9m (2005: £18.9m) was declared by the Directors at their meeting on 23October 2006. These financial statements do not reflect this dividend payable. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Whitbread