Whitbread’s reset is slow. But angry US hedge fund doesn’t have a better idea | Nils Pratley

Demand for ‘formal sale’ is odd for slew of reasons including five-year plan analysts say is ‘sensible, credible and material’

The big strategy reset a fortnight ago from Whitbread, owner of Premier Inn, got a ho-hum response from the stock market for understandable reasons. The company said shutting Beefeater and Brewers Fayre restaurants, or converting the space to hotel rooms, would involve up-front costs. Most of the goodies in the five-year plan, unveiled only two years after the last one, are intended to come towards the end of the period, which makes them less certain in the eyes of the market.

The big prize, according to Whitbread’s chief executive, Dominic Paul, would be an improvement in annual returns on capital from a pedestrian 11% to a decent 16%. But shareholders, already digesting a whack from Rachel Reeves’s changes to business rates, would have to wait awhile for the “higher-margin, higher-returning pure-play hotel business” to appear. Continue reading...