Costa spin-off speculation froths up at Whitbread

3rd Apr 2012 07:06

Whitbread has given Finance Director Chris Rogers the job of running its Costa Coffee chain and implementing worldwide expansion plans, adding fuel to speculation that the company is preparing to spin off the wildly successful chain.Chris Rogers, who joined Whitbread in 2005 as group finance director, will lead a five year growth plan to increase the size of the business to 3,500 stores worldwide, £1.3bn system sales and 3,000 Costa Express machines by 2016. Costa is already the UK's largest coffee shop brand with almost 1400 stores and a further 800 units in 25 overseas markets, including China and India. He takes the job following incumbent John Derkach's decision to join UK restaurant company, Tragus Group, as Chief Executive in August."Chris has played a major part in Whitbread's strategic development and, as a long standing member of the Costa management board, understands the vital brand and cultural DNA which has driven its success," said Andy Harrison, Whitbread's Chief Executive."Costa has an exciting future within Whitbread and Chris will spearhead our ambitious growth plans, which will create substantial shareholder value."Following up on the comment about Costa's future within Whitbread, Harrison told reporters that he would not discount the chain being demerged from the company - "we have always said 'never say never'," Harrison said - but stressed that the board is completely focused on "delivering Costa's growth story" for the benefit of Whitbread's shareholders.Geoff Collyer, an analyst at Whitbread's house broker Deutsche Bank, said: "We see Costa remaining within the group for some time.""If demerger was a near-term option, why is the managing director leaving? We see an early demerger of Costa as potentially limiting the realisable value from the Costa growth plans for investors," Collyer added.MM/JH