Whitbread’s chief executive is stepping down after five years at the Costa coffee chain and Premier Inn hotels group, citing the pressure of running three big companies in a row for his decision.
Andy Harrison will leave Whitbread by next February, the end of the current financial year. He said that, with his 58th birthday in two days’ time, he wanted to do something else. Harrison will take over as chairman of Dunelm, the homeware retailer, in July.
Harrison, who was paid £6.4m in 2013, is likely to leave on a high after steering the group through five years of growth in which its market value increased to £9.7bn from £2.5bn. He ran easyJet before joining Whitbread and before that he was the boss of RAC, the car breakdown service.
Harrison said: “I can tell you from personal experience that 18 years as chief executive of three different public companies is relentless and demanding. It’s time to hand the baton on to someone else while I’ve still got the energy left to do something different with my life.”
Whitbread announced underlying annual pre-tax profit up 18.5% to £488m and increased its full-year dividend by 19% to 82.15p. Statutory pre-tax profit for the year to the end of February rose by a third to £464m.
The company has capitalised on the boom in UK coffee consumption and increased use of budget hotels, especially by business travellers.
Investors often get worried when a chief executive stands down, fearing the boss knows when the business has peaked. Whitbread’s shares, which hit a record £54.40 on Monday, fell as much as 3.5% to £52.50 in afternoon trading.
Whitbread is expanding Premier Inn in Germany, the Middle East and Asia and has taken Costa to Europe, China and other Asian markets. Some analysts have raised concerns about the cost and unpredictability of the growth plan.
Costa opened 219 new stores worldwide last year, driving total sales up 18%. Like-for-like sales at Costa stores open at least a year rose 6%. Premier Inn’s total sales rose 15% to £1.1bn and like-for-like sales increased by 9%.
Harrison said the company had plenty of room for growth after his departure. He announced targets for his replacement to expand Premier Inn to about 85,000 rooms by 2020 from 59,138 rooms now and to increase Costa sales to £2.5bn from £1.4bn.
