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RNS Number : 5354M

Whitbread PLC

07 May 2015

Whitbread PLC

Annual Report and Annual General Meeting

7 May 2015

The Company announces that copies of its 2014/15 Annual Report and Accounts, Notice of Annual General Meeting and Form of Proxy, together with letters from the Chairman relating to such documents, have been submitted to the UK Listing Authority National Storage Mechanism and will shortly be available for inspection at www.Hemscott.com/nsm.do. We have also submitted the 2012/13 and 2013/14 accounts for Whitbread Group PLC, Costa Limited and Premier Inn Hotels Limited.

The Company's Annual General Meeting will be held at Church House Conference Centre, Dean's Yard, Westminster, London SW1P 3NZ on Tuesday 16 June 2015 at 2.00 pm.

The above documents can also be downloaded from the Company's website at www.whitbread.co.uk.

In accordance with the requirements of Rule 4.1 and Rule 6.3.5 of the Disclosure Rules and Transparency Rules of the UK Financial Conduct Authority, the Appendix to this announcement contains a description of the principal risks and uncertainties affecting the Group and a responsibility statement.

The Company's Preliminary Results for the financial year to 26 February 2015 were announced on 28 April 2015.

Enquiries:

Catherine Lindsay, Assistant Company Secretary

Tel: 01582 889363

APPENDIX

   1.   Risk Management 

Understanding and responding to risks in our operations means we can make informed decisions that enhance our capacity to build value.

Risk arises from the operations of, and strategic decisions taken by, every business. It is not something that can be avoided but should be harnessed in pursuit of business objectives.

We have continued to invest in our risk management capability with the appointment of a Director of Internal Audit, leading the implementation of a new risk management strategy and policy, which will enhance the identification, reporting, monitoring and management of risks at all levels within the organisation.

The Board has ultimate responsibility for risk management throughout the Group and determines the nature and extent of the risks Whitbread is willing to take to achieve its objectives. Risk is managed proactively by the business unit management boards and the Executive Committee. Certain responsibilities, such as overseeing the systems of risk management and internal control, have been delegated to the Audit Committee, which completes an annual review of the effectiveness of these processes.

Both the Whitbread Hotels & Restaurants and the Costa businesses complete an annual review of their risks to the achievement of their strategic goals, whilst also taking into account the key operational risks, which are updated quarterly. A top-down risk assessment is also completed to capture the Board's views on the principal risks facing Whitbread. Actions required to manage these risks are monitored and reviewed on a regular basis.

The principal risks identified, together with a summary of key mitigations and their status are summarised below.

Principal risks

 
 Risk                       Key mitigations                              Status 
-------------------------  -------------------------------------------  ------------------- 
 Engagement and             The success of our businesses                Regularly 
  retention                  would not be possible without                reviewed at 
  Failure to maintain        the passion and commitment of                senior management 
  staff engagement           our teams. Team engagement is                and PLC Board 
  and retention              fundamental. We monitor this closely         level. 
  in tightening              through our annual engagement 
  labour market.             survey 'Your Say', the results 
                             of which are reviewed by the Executive 
                             Committee and the Board, with 
                             trends analysed and appropriate 
                             actions agreed. Team turnover 
                             is also a key component of our 
                             WINcard and Annual Incentive Scheme. 
 
                             Talent and succession planning 
                             takes place regularly to ensure 
                             top talent is identified and succession 
                             plans exist for key roles. Talent 
                             gaps are addressed through recruitment, 
                             training and development to grow 
                             our management capability. The 
                             Group offers key employees appropriate 
                             levels of reward and recognition 
                             in order to retain them. 
-------------------------  -------------------------------------------  ------------------- 
 Health and safety          The safety of our guests and employees       Increasing 
  Health and safety          is of paramount importance. NSF,             activity in 
  risk: death                an independent company, carries              the international 
  or serious injury          out health and safety audits on              businesses. 
  as a result                every site and we have a programme 
  of Company negligence.     of fire safety training for our 
                             employees. In the last 12 months 
                             we have reviewed the fire safety 
                             of all hotels and completed the 
                             resulting improvements programme. 
                             Health and safety is a measure 
                             on the WINcard and acts as a hurdle 
                             for incentive payments. Regular 
                             health and safety updates are 
                             provided to the Executive Committee, 
                             management boards and to the Board. 
-------------------------  -------------------------------------------  ------------------- 
 Innovation and             To ensure we maintain and improve            Priority at 
  brand                      the strength of our brands we                senior management 
  strength                   continually complete market research         level. 
  A long-term                and monitor opinion with focus 
  decline in the             groups and net guest scores to 
  customer perception        ensure we maintain the right levels 
  of our brands              of investment and innovation in 
  would impact               our customer offerings. 
  our ability 
  to grow and 
  achieve appropriate 
  levels of return. 
-------------------------  -------------------------------------------  ------------------- 
 Competitive                Actions to outperform the competition        Priority at 
  supply                     are developed on a strategic and             senior management 
  Increased competitive      tactical basis. Significant customer         level. 
  supply reduces             research is carried out with the 
  returns.                   insight received used to develop 
                             action plans and stimulate innovation. 
                             Consumer trends both in the UK 
                             and overseas are analysed and 
                             competitor activity is monitored. 
-------------------------  -------------------------------------------  ------------------- 
 Cyber and data             We have a series of IT security              Increased 
  security                   controls in place including network          awareness 
  Inadequate systems         and system monitoring and regular            of potential 
  and data security          penetration testing to identify              attacks on 
  reduces the                network and system vulnerabilities.          customer- 
  effectiveness              We have also significantly invested          facing systems 
  of our systems             in new skills and capability with            with regular 
  or results in              the appointment of a Chief Data              senior management 
  a loss of data.            Officer and Director of System               review. 
  This in turn               Architecture to lead our information 
  could result               assurance strategy. 
  in loss of income 
  and/or reputational        A security improvement programme 
  damage.                    has been established to address 
                             immediate concerns and develop 
                             a roadmap to ensure data breach 
                             controls, procedures and accountabilities 
                             are embedded across Whitbread. 
-------------------------  -------------------------------------------  ------------------- 
 Failure of Premier         We are currently upgrading the               Significant 
  Inn reservation            infrastructure and increasing                investment 
  system                     the capacity, resilience and stability       agreed by 
  System failure             of the hotel booking reservation             PLC Board. 
  results in business        system. The project is being overseen 
  interruption,              by a steering committee, resourced 
  process failure            with experienced personnel and 
  and financial              supported with independent third 
  loss.                      party assurance. 
-------------------------  -------------------------------------------  ------------------- 
 IT infrastructure          A strong IT leadership team is               Significant 
  Ability to grow            in place together with Group governance      investment 
  is hindered                structures to help prioritise,               agreed by 
  by focus, resources        coordinate and deliver our business          PLC Board. 
  and time required          plans and the IT investment in 
  to upgrade IT              an efficient way so as to minimise 
  infrastructure.            disruption. 
-------------------------  -------------------------------------------  ------------------- 
 Property inflation         We have strong site selection                Investment 
  growing faster             teams with well established and              criteria reviewed 
  than our ability           robust processes in place based              during the 
  to increase                on market and economic fundamentals,         year. 
  RevPAR                     both at a macro and micro level. 
  Increase in                These are supported by a robust 
  property prices,           investment appraisal process to 
  relative to                ensure we achieve good levels 
  RevPAR growth,             of return. 
  makes it harder 
  to find hotel              We have also launched our compact 
  locations that             hotel format, 'hub by Premier 
  provide good               Inn', focused on achieving good 
  levels of return           returns in high property cost 
  for Premier                locations. 
  Inn and achieve 
  our milestones. 
-------------------------  -------------------------------------------  ------------------- 
 Funding                    The Group diversifies funding                Agreed at 
  The availability           sources, where appropriate, with             PLC Board 
  and cost of                a combination of revolving credit            level. 
  debt finance               facilities, US private placements 
  can influence              and leases, whilst maintaining 
  the Group's                strong relationships with banks 
  opportunities              and institutions. 
  to develop its 
  business.                  To ensure Whitbread has appropriate 
  The Group's                access to funds, it aims to maintain 
  ability to access          its financial position and capital 
  funds for its              structure consistent with retaining 
  businesses in              its investment grade status. To 
  the longer term            this end we work within a financial 
  may be affected            framework of net debt to EBITDAR 
  during periods             (pension and lease adjusted) of 
  of tight credit            less than 3.5 times, which is 
  conditions or              monitored regularly and reported 
  the absence                to the Board. 
  of funds at 
  reasonable cost. 
-------------------------  -------------------------------------------  ------------------- 
 Pensions                   The Company's defined benefit                Triennial 
  Change in investment       pension scheme is closed to new              valuation 
  policy, or assumptions,    members and, for future service,             and recovery 
  leads to increased         to existing members. The Pension             plan agreed. 
  contributions              Investment Committee and its advisers, 
  or re rating               as well as the internal 
  of the credit              pensions team, have significant 
  position.                  expertise in the area and provide 
                             good quality oversight. The investment 
                             strategy has been designed to 
                             reduce volatility and risk and 
                             hedging opportunities are utilised 
                             as appropriate. The Finance Director 
                             attends Pension Investment Committee 
                             meetings. 
-------------------------  -------------------------------------------  ------------------- 
 Food safety                The health and wellbeing of our              Increasing 
  and hygiene                customers is fundamental to our              activity in 
  The preparation            business. We have stringent food             the international 
  or storage of              safety and sourcing policies with            businesses. 
  food and/or                traceability and testing requirements 
  supply chain               in place in respect of meat and 
  failure results            other products. 
  in food poisoning 
  and reputational           Independent food safety audits 
  damage.                    are also completed regularly at 
                             our hotels, restaurants and coffee 
                             shops and the results are closely 
                             monitored. We also invest considerable 
                             resources in employee training 
                             in the storage, handling and preparation 
                             of food. 
-------------------------  -------------------------------------------  ------------------- 
 
   2.   Directors' responsibility for the consolidated financial statements 

Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and Accounts in accordance with applicable UK laws and regulations. UK company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have prepared the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and applicable UK law. Further, they have elected to prepare the Company financial statements in accordance with United Kingdom Accepted Accounting Practice (UK GAAP) and applicable UK law.

Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that period.

In preparing the Group financial statements, the directors are required to:

-- select suitable accounting policies in accordance with IAS 8 Accounting Policies, changes in accounting estimates and errors, and then apply them consistently;

-- present information, including accounting policies, in a manner which presents relevant, reliable, comparable and understandable information;

-- provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group's financial position and financial performance;

-- state that the Group financial statements comply with IFRS, subject to any material departures disclosed and explained in the financial statements;

-- make judgements and estimates that are reasonable and prudent; and

-- prepare the consolidated financial statements on a going concern basis unless it is inappropriate to presume that the Group will continue in its business.

In preparing the Company financial statements, the directors are required to:

-- select suitable accounting policies and apply them consistently;

-- make judgements and estimates that are reasonable and prudent;

-- state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that disclose, with reasonable accuracy at any time, the financial position of the Company and the Group and enable them to ensure that the financial statements comply with the Companies Act 2006 and, with regard to the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for the system of internal control for safeguarding the assets of the Group and the Company and hence for taking reasonable steps to prevent and detect fraud and other irregularities.

The directors are responsible for preparing the strategic report (including the corporate governance report), the directors' remuneration report and the directors' report in accordance with The Companies Act 2006 and applicable regulations, including the Listing Rules and Transparency Rules.

A copy of the financial statements of the Group is posted on the Group's website. The directors are responsible for the maintenance and integrity of the Annual Report included on the website. Information published on the Group's website is accessible in many countries with different legal requirements. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the directors, the names and functions of whom are set out on pages 50 and 51 of the Annual Report and Accounts, confirms that, to the best of their knowledge, they have complied with the above requirements in preparing the financial statements in accordance with applicable accounting standards and that the financial statements give a true and fair view of the assets, liabilities, financial position and result of the Group. In addition, each of the directors confirms that the strategic report includes a fair review of the development and performance of the business and the position of the Group and together with a description of the principal risks and uncertainties that it faces.

The directors are responsible for preparing the Annual Report in accordance with applicable law and regulations. Having taken advice from the Audit Committee, the Board considers the Annual Report and Accounts, taken as a whole, to be fair, balanced and understandable and that it provides the information necessary for the shareholders to assess the Group's and Company's performance, Business Model and strategy.

Signed on behalf of the Board

   Andy Harrison                Nicholas Cadbury 
   Chief Executive             Finance Director 

27 April 2015

This information is provided by RNS

The company news service from the London Stock Exchange

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