Whitbread announces demerger of Costa Coffee

Whitbread PLC has announced today their intention to demerge the Costa Coffee chain from the Premier Inn chain.

The announcement was made at the same time with the company’s preliminary annual results in which it reported a 6.1% increase in revenue and a growth of 4.5% in the underlying pre-tax profit, as stated in their press release.

Reported by the BBC, after the split Costa will be presented as an independent company, and this decision has come after pressures received from activist investors. Their intention is for Costa to successfully be spun off from the business within the next two years.
Whitbread said that Costa is the clear UK market leader and second largest globally, with attractive long-term international opportunities.

Adam Crozier, Chairman of Whitbread PLC, said, “For some time, the Board has been of the view that at the right time Premier Inn and Costa should be independent companies. A separation will provide enhanced focus for each business and give shareholders an investment in two high-quality businesses. We will ensure that prior to separation each business is sufficiently developed and well-positioned to take advantage of the structural growth opportunities available to them in the UK and internationally.”

Alison Brittain, Whitbread PLC Chief Executive, added that, “Costa will become a listed entity in its own right and the clear market leader in the out-of-home coffee market in the UK. Costa will also be well positioned to build further on its strong international foundations with growth expected in China and Costa Express.”