Primary Recommendation

Whitbread -Budget hotels and coffee shops drive surge in eps growth

August 2012

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Experienced investors may recall Whitbread as being the eponymous player in the world of brewing and pubs but following a change in strategy the company is today focused on its Premier Inn budget hotels and Costa coffee shops, which have delivered an impressive jump in eps from 63p to 134p in the past five years. Whitbread's new direction has positioned it well to benefit from the credit crunch with customers eager to trade down to its affordable hotels and Whitbread has a plan to expand the number of rooms from 48,000 to 65,000 over the next four years. At the same time Costa, which has consistently scored top ratings in customer satisfaction surveys, has also proved a phenomenally successful business, with management aiming to expand i ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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