Whitbread finance chief to run Costa

RESTAURANTS-TO-HOTELS giant Whitbread has elevated its highly regarded finance chief to run the Costa Coffee chain as a precursor, analysts have suggested, to the business being demerged.

The appointment of Chris Rogers as managing director of Costa, Britain’s biggest coffee shop brand with almost 1,400 shops, lifted Whitbread shares by 4p to 1870p.

Rogers has been chief bean counter at the group, which owns budget hotel chain Premier Inn and the Beefeater, Brewers Fayre and Table Table restaurant brands, for seven years following a 17-year career in retail including 13 years at B&Q owner Kingfisher.

Whitbread chief executive Andy Harrison said Rogers would head up Costa’s global business from August, to drive forward its five year growth plan to increase the size of the business to 3,500 stores worldwide with a target to hit £1.3bn of sales.

The business also has 800 outlets in 25 markets overseas including China and India.

Rogers replaces John Derkach who is leaving Costa to join privately owned Café Rouge owner Tragus.

Some analysts have suggested Costa could be spun out of Whitbread to realise value for shareholders as it has few crossovers with Premier Inn.

Greg Johnson, an analyst at Shore Capital, said: ‘The statement states “Costa has an exciting future within Whitbread”, although we imagine that speculation that Costa will be demerged will grow, especially given the heavyweight appointment. ‘Our recent research suggested that Costa could be worth in excess of £1bn or £6 per Whitbread share.’

Costa was founded by Italian brothers Sergio and Bruno Costa, who opened a single café in Vauxhall, south London in 1971.

It has rapidly expanded since being purchased by Whitbread for £20m in 1995, taking advantage of Britain’s apparent love of coffee shops.

Harrison said: ‘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.

‘Costa has an exciting future within Whitbread and Chris will spearhead our ambitious growth plans, which will create substantial shareholder value.’

Analysts said any demerger would not be imminent.

More at thisismoney.co.uk/wtb