Swot Analysis Of Whitbread Plc

INTRODUCTION

Whitbread plc (WTB) is a Company listed on London stock exchange in the business of leisure and hospitality and it also forms part of FTSE 100 Index.

WTB runs multinational hotels, restaurants and cafe shops and is headquartered in the UK. The major brands which it operates includes:

• Premier Inn

• Costa Cafe

• Beefeater

• Table Table

• Brewers Fayre

• Whitbread Inn

The Group has several subsidiaries, associates and joint ventures, held under direct or indirect control. The major subsidiaries and associate are listed below (Whitbread, 2016): o Whitbread plc o Premiere Inn Hotels Ltd o Costa Ltd o Yueda Costa (Shanghai) Food & Beverage Management Co. Ltd o Cafe heaven International Ltd o Costa Express Ltd o Morrison Street

The recoverable amount is estimated as greater of fair value less cost to sell and value in use. WTB has determined fair value of properties through a valuation specialist or availability of market data, where applicable. In lack of evidence about the fair value, the recoverable amount is considered to be the value in use. WTB has estimated the value in use by using discounted cash flow method and prepared cash flow projection for five years using internal estimates approved by the Board (Whitbread,

The Group has assessed for impairment during the year and concluded goodwill is not impaired in any of the CGUs. The movement represents acquisition during the year.

We have reviewed previous five-year financials and observed that the Management has recorded impairment regularly and hence no indicators of delaying impairment exist. The net effect on the Net profit of WTB was 1% whereas in prior year there was a net reversal of impairment as explained above. Consequently there is an increase in debt to equity ratio by 80% in 2016, hence the ability to obtain funds becomes easier (Financial Times, 2016).

We have selected Greene King Corporation, which is in similar industry and has similar impairment policy as WTB. Greene King has reported a net impairment loss of £32.2M in 2016, representing 17% of its Group profit (Greene King, 2016). The factors identified are similar to WTB as discussed above. Greene King has reported much higher impairment loss as compared to WTB. The Group has used similar growth rate and pre-tax discount rates as