No ‘hidden agenda’ over Costa switch

Leisure giant Whitbread yesterday down-played speculation that it would demerge its Costa Coffee chain despite highly- regarded financial director Chris Rogers being put in charge of the fast-growing brand.

Whitbread chief executive Andy Harrison said there was no “hidden agenda” behind the management change and added that Costa’s future lay within Whitbread. However, he declined to rule out a demerger at some stage.

“The future’s a long time and we’ve always said ‘never, say never’, but let me emphasise we are 100 per cent focused on delivering Costa’s growth plan, which will create substantial value for Whitbread shareholders,” he said.

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Costa’s current managing director, John Derkach, is leaving to become chief executive of restaurant firm Tragus, the owner of Bella Italia, Cafe Rouge and Strada. His replacement, Rogers, is charged with growing Costa’s international footprint. Rogers will also keep his seat on Whitbread’s board.

Greg Johnson, an analyst at Shore Capital, said: “We imagine speculation that Costa will be demerged will grow, especially given the heavyweight appointment. But we do not view a demerger as imminent.”

Deutsche Bank analyst Geof Collyer added that the appointment would be met with a combination of relief that the highly-rated Rogers will not be leaving Whitbread as well as speculation that Costa is being lined up for a demerger.

He said Costa should remain within the group for some time so shareholders can benefit from the significant growth expected from the expansion.

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