Costa Coffee to split from Whitbread
Whitbread has confirmed that it plans to split off Costa Coffee, the UK’s biggest coffee chain, to create a separately listed business.
The UK-based company, which owns hotel chain Premier Inn, restaurant chain Beefeater a well as Costa Coffee, said that it would demerge from the coffee chain within two years.
Activist investors Elliott Advisors and Sachem Head together control 10% of the FTSE 100 firm’s shares.
In separating the brand, Whitbread says it will allow shareholders to invest in “two distinct, focused and market-leading businesses.”
The hospitality company also said that the split would give "greater operational focus and afford investors greater clarity on profit and cash generation."
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Chairman Adam Crozier said: “The board fundamentally believes this is the best course of action to optimise value for shareholders over the longer term and will ensure both Premier Inn and Costa are positioned well to thrive as independent companies."
The announcement came as Whitbread announced its annual results, reporting a 6.4% rise in pre-tax profits to £548mn.
The company said that these results were boosted thanks to strong international sales at Costa and a surge in London hotel bookings.
Alison Brittain, chief executive of Whitbread, said that the separation of the company had been in discussion “for years.”
She said: “Given the significant strategic progress that has been made and the momentum in the delivery of the plan, the board is confident that both Premier Inn and Costa will soon be businesses of sufficient strength, scale and capability to enable them to thrive as independent companies.”
Costa Coffee is the biggest coffee chain in the UK with more than 2,400 coffee shops and it also has an additional 1,400 outlets in 31 overseas markets.
Starbucks to open 10,000 sustainable stores in bid to save US$50mn
The plans come under an initiative called the “Starbucks G...
Starbucks has announced plans to open 10,000 “greener stores” around the world by 2025
The plans come under an initiative called the “Starbucks Greener Stores Framework”, which the coffee company will develop with experts in the field such as SCS Global Services, and the World Wildlife Fund.
Kevin Johnson, Starbucks’ CEO, said in a company statement that Starbucks has a responsibility to promote environmental sustainability.
“We are a company in [sic] that believes, in the fabric of mission and values, that the pursuit of profit is not in conflict with the pursuit of doing good”.
The announcement aligns with Starbucks’ efforts over the past decade to create sustainable buildings, working in partnership with the US Green Building Council.
The company has said it will go beyond the Leadership in Energy and Environmental Design (LEED) sustainable building criteria, which it developed alongside the US Green Building Council, to focus on powering its stores in the US and Canada with 100% renewable energy.
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Starbucks plans to introduce technology to both new buildings and in renovations of existing stores that will save 25-30% on energy and water use.
Marketing Magazine said this could save Starbucks around US$50mn incrementally over the next decade.
This year, Starbucks committed to eliminate its reliance on single-use straws in 28,000 stores by 2020, and also said that it is developing compostable paper cups.