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Whitbread has hangover
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October 27, 1999: 7:57 a.m. ET
Brewer's results meet forecasts but stock sinks toward 1999 low
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LONDON (CNNfn) - The British brewer Whitbread posted a modest rise in first-half earnings Wednesday that met analysts' forecasts but its stock still fell near its lowest level of the year.
Whitbread's stock is reeling from its failed takeover of the pub business from the spirit and beverage company Allied Domecq in July. The company lost out to a rival bid from U.S.-backed Punch Taverns.
Whitbread's half-year pretax earnings climbed 3 percent to 213.6 million pounds ($354 million) as a buoyant performance from its sports club and hotel units was sapped by weaker results from its pub and restaurant divisions.
Sales climbed 2.4 percent to 1.69 billion pounds.
Whitbread (WTB) shares sagged 3.1 percent to 692 pence in a weak London trading session, just 11 pence above their 1999 low.
While the first-half numbers were in line with expectations, investors noted the cautious remarks of chief executive David Thomas about the pub and restaurant business.
He noted that the weak economy had dampened demand, with comparable sales in the two divisions dipping over the last six months. Pub operating profits fell almost 5 percent.
The leisure side posted the strongest results, with the chain of David Lloyd sports clubs recording an 18 percent rise in operating earnings as sales climbed 22 percent. The hotel unit, which controls the Marriott chain in Britain, posted an 11 percent rise in operating profits on a 19 percent rise in revenues.
The company had planned to spin off its brewing assets after the Punch takeover, but Thomas said that they will be retained following the deal's collapse. 
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Whitbread
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