Stmnt re Restructure

Whitbread PLC
19 October 2000



Whitbread to restructure, tighten focus and return value to
Shareholders

The Board of Whitbread PLC ('Whitbread') is to implement a
radical restructuring and focusing of the Whitbread Group.

*    The effect of this restructuring will be:
     *   the formation of 'Future Whitbread', comprising
          Whitbread's hotel, restaurant and leisure club
          businesses;
     *   the unlocking of the full value in the 3000 pubs
          which comprise the Pubs and Bars Division; and
     *    a substantial return of value to shareholders.

*   Future Whitbread will focus on three growth segments of
    the UK leisure market where the group already occupies
    leading positions:
     *   Lodging - Marriott is a leading brand in the
          premium hotel market and Travel Inn is the market
          leader in the budget sector;
     *   Eating out - Whitbread is Britain's largest
          operator of restaurants and owns two of the
          leading brands in Brewers Fayre and Beefeater; and
     *   Active leisure - David Lloyd Leisure is the
          leading brand.

*    Full shareholder value will be unlocked from Pubs and
     Bars through one or more transactions, whilst retaining
     the operational excellence of its businesses.  The
     Board intends that approximately 75 per cent. of the
     net proceeds will be returned to shareholders whilst
     ensuring that Future Whitbread has the financial
     flexibility to invest for organic growth.

*    The return of value to shareholders is expected to be
     substantially complete by mid-2001.  In the meantime,
     Whitbread may utilise its existing authority to buy
     back shares as part of the mechanism for returning
     value to shareholders.

*    Interim results for the group for the six months to 2
     September 2000 will be published on 31 October 2000.
     Profit before exceptional items and tax for the period
     is expected to be not less than £181m.

The Chairman of Whitbread, Sir John Banham, commented:

'This is a radical plan to focus Whitbread, generate faster
earnings growth and improve shareholder returns.  The
restructuring creates the opportunity and the momentum to
manage Whitbread's brands and property assets more
aggressively and to take full advantage of Whitbread's
leading positions in growth segments of the UK leisure
market.  It will also result in a substantial return of
value to shareholders.'

This summary should be read in conjunction with the full
text of the announcement.

An analysts' conference will be held at Whitbread PLC,
Chiswell Street, London EC1 at 9.30 am today.  The
conference will be available live on the Whitbread website -
www.whitbread.co.uk.  To listen to the conference dial 020
8240 8244 and ask for the Whitbread conference call.

Enquiries
Whitbread PLC
David Thomas, Chief Executive          [phone]
David Reed, Director of Corporate      [phone]
Affairs

Dresdner Kleinwort Benson              [phone]
David Barclay
Nigel Binks

Gavin Anderson & Company               [phone]
Howard Lee
Chris Salt
Laura Hickman
Fiona Grant Duff

Kleinwort Benson Limited ('Dresdner Kleinwort Benson'),
which is regulated in the United Kingdom by the Securities
and Futures Authority Limited, is acting for Whitbread and
for no one else in relation to the matters discussed herein
and will not be responsible to anyone other than Whitbread
for providing the protections afforded to its customers or
for providing advice in relation to the matters discussed
herein.




                                            19 October 2000

Whitbread to restructure, tighten focus and return value to
shareholders

The Board of Whitbread has completed a strategic review and
has concluded that shareholder value will be enhanced by
increased focus on growth sectors of the UK leisure markets,
unlocking the full value in Pubs and Bars and returning a
substantial part of that value directly to shareholders.

Background
In recent years, the Whitbread Group strategy has been to
develop its portfolio of brands and businesses to take
advantage of emerging trends and opportunities in the
lodging, eating out and active leisure markets.

Most notably:

*    the opportunity to create an internationally branded UK
     network of 4-star hotels;
*    the rapid growth in demand for value for money budget
     hotel accommodation;
*    growing expenditure on eating outside the home;
*    increased consumer interest in fitness and healthy
     lifestyles; and
*    consumer preference for branded operations.

This strategy lay behind the acquisition of Swallow Hotels
in January 2000, the disposal of the Whitbread Beer Company
in May 2000 and the sale earlier this month of Whitbread's
interest in the First Quench off-licence business.

As a result of this strategy, Whitbread has already seen a
significant increase in the proportion of EBIT derived from
its hotel, restaurant and sports, health and fitness
divisions.


Outcome of the Board's review

The Board believes that Future Whitbread's businesses,
including the Marriott and Travel Inn hotel brands, leading
restaurant brands such as Brewers Fayre and Beefeater, and
David Lloyd Leisure, offer great potential for growth and
increasing returns for shareholders.

Further, the Board considers full value for Pubs and Bars
can now be realised for Whitbread shareholders under a
different ownership structure with higher leverage or the
potential for cost synergies.

This process will result in a substantial return of value to
shareholders, and in a more streamlined Future Whitbread
with increased management focus and the capacity to take
advantage of organic growth opportunities in identified
segments of the leisure market.  Approximately 75 per cent.
of the net proceeds from Pubs and Bars will be returned to
shareholders with the balance used to repay existing
Whitbread debt, ensuring that Future Whitbread will have the
financial flexibility to invest for organic growth.

The return of value to shareholders is expected to be
substantially complete by mid-2001.  Shareholders will be
kept informed of material developments.

Future Whitbread - Focus on Growth Markets

Future Whitbread is already the UK's largest operator in
active leisure clubs, restaurants and budget hotels and
holds the second largest overall position in hotels.  It is
the intention of the Board to build on these leading market
positions.

Five major brands - Marriott (including the Swallow hotels
to be converted to Marriott brands), Travel Inn, Brewers
Fayre, Beefeater and David Lloyd Leisure, represent around
70 per cent. of the sales of Future Whitbread Operating
Divisions (see appendix).  All of these brands achieved like-
for-like sales growth in the six months to 2 September 2000.

The Future Whitbread Operating Divisions grew sales by 22
per cent., EBITDA by 31 per cent. and EBIT by 30 per cent.
in the six months to 2 September 2000.  Overall, like-for-
like sales growth for Future Whitbread Operating Divisions
was 3.8 per cent.

Further highlights from the Board's current estimate of the
Interim Results for the six months ended 2 September 2000,
which are due to be released on 31 October 2000, are set out
in an appendix to this press release.

Hotels
The Whitbread Hotel Company combines a leading brand in the
premium hotel market, Marriott, with the market leader in
the budget hotel sector, Travel Inn.

Travel Inn currently operates 250 hotels with around 13,400
rooms.  The Board intends to increase the Travel Inn network
to at least 350 hotels and 20,000 rooms in 2003.  Average
occupancy in the six months to 2 September 2000 was 87 per
cent.  In the same period, Travel Inn, including an estimate
of associated food and beverage income, contributed around
£33 million to group EBIT.  (The results and net assets of
the majority of Travel Inns are included within Whitbread
Restaurants)

The Board believes that there is significant opportunity for
further organic growth in the four-star market.  Whitbread
has the sole UK franchise for Marriott and is currently
achieving a significant yield premium to the four-star hotel
market.  The Whitbread Hotel Company operates over 10,000
rooms in the UK from 73 hotels.  A further three new
Marriott sites are in the pipeline.  12 Swallow hotels which
do not fit the Marriott brand are in the course of disposal.

For the six months ended 2 September 2000, the Whitbread
Hotel Company generated EBITDA of approximately £65m from
sales of approximately £219m.  The Whitbread Hotel Company
generated like-for-like sales growth of 9.8 per cent. in the
half year with the Marriott brand's like-for-like sales
ahead by 10.2 per cent.  The Swallow Hotels acquisition is
on track to deliver the synergy benefits and yield uplift
which were anticipated, although the impact of the
acquisition is yet to show through in Whitbread's Group
results.

Restaurants
Whitbread Restaurants is the largest operator of restaurants
in the growing but highly competitive eating out market.
For the six months to 2 September 2000, two brands, Brewers
Fayre and Beefeater, including their adjacent Travel Inns,
accounted for around 90 per cent. of Restaurants' EBIT.

Brewers Fayre is one of the country's most successful
restaurant brands with 387 outlets which have average weekly
sales of £20,000.  Around 120 of these outlets operate under
the name of Brewsters, a family-oriented brand that provides
special facilities for children. Beefeater has 258 outlets
with average weekly sales of £22,000.  It operates from some
of the country's best family restaurant sites.  Following
the success of the Brewers Fayre strategy, the Beefeater
estate is also to be segmented and rebranded.

The Whitbread restaurants portfolio also includes Bella
Pasta, Cafe Rouge, Costa Coffee, Maredo in Germany, Pizza
Hut and TGI Friday's.  Certain of these brands, for example
Costa Coffee and Pizza Hut, have shown good like-for-like
sales growth.  The performance of others, for example Cafe
Rouge, has been disappointing and the Board expects that the
increased focus of management resource on this area of the
business will produce significant benefits.

In a very competitive market for restaurant businesses, the
Whitbread Restaurants Division generated EBITDA of
approximately £93m from sales of approximately £563m for the
half year ended 2 September 2000.  The division overall
generated like-for-like sales growth in the half year of 2.2
per cent. with  the biggest brand, Brewers Fayre, growing
like-for-like sales by 4.6 per cent.

Sports, Health and Fitness
David Lloyd Leisure is the largest operator in the fast
growing active leisure market with 44 large clubs and in
total more than 200,000 members.  Whitbread has grown the
brand from 14 clubs since its acquisition in 1995.

The strength of the David Lloyd Leisure brand enables it to
outperform the active leisure market, with sales per member
and membership retention both above the industry average.

The Board intends to continue the vigorous growth of David
Lloyd Leisure through further improvements in like-for-like
sales performance, the 18 clubs which have been open for
less than 3 years reaching mature membership levels and
organic growth through a new club pipeline which already has
eight sites.  In addition, the David Lloyd Leisure franchise
is to be extended to the 48 Marriott and Swallow leisure
clubs.

In the six months to 2 September 2000, David Lloyd Leisure
generated EBITDA of approximately £22 million from sales of
approximately £67 million.  The division generated like-for-
like sales growth of 5.2 per cent. for the six month period.

Future Whitbread outlook

The UK hospitality and leisure markets are forecast to
continue to grow.  The Board intends to capitalise on the
leadership positions already held by the brands that will
comprise Future Whitbread and to build businesses that
deliver excellent customer service and sustain strong
organic growth with high returns.

In developing its strategy, the Board has taken account of
the operating and marketing synergies which exist between
the constituent parts of Future Whitbread.  Some 220 Travel
Inns attract custom to the restaurants alongside which they
are situated.  David Lloyd Leisure's specialist expertise
will add value to the management of the 48 Marriott and
Swallow leisure clubs.  Restaurants' food skills will
benefit all parts of Future Whitbread.

In addition, Future Whitbread brands retain scale advantage
from annual group-wide procurement of goods and services of
some £600m, co-ordinated management of the property
portfolio and shared services in distribution, finance and
administration.  Existing brand customer databases and
loyalty schemes provide significant opportunities for the
cross-selling of services.

The Board intends that Future Whitbread will also benefit
from a smaller and more effective overhead.

Pubs and Bars Division

Pubs and Bars comprises 3,000 outlets.

*    Whitbread Pub Partnerships is responsible for
     Whitbread's 1,710 leased pubs, which are primarily
     local and rural pubs operated by independent business
     people with contractual arrangements in place for
     draught and packaged beer.

*    Pubs Inn-Line comprises 1,095 managed pubs, including
     895 non-branded community pubs as well as 61 Wayside
     Inns and fast growing new concepts including Shotz and
     Champion.

*    High Street comprises 193 branded pubs and bars
     including 148 Hogsheads as well as Casa bars and Dome
     Parisian-style cafe bars.

Pubs and Bars has its own dedicated management team which
will continue to be led by Stewart Miller.

For the six month period ending 2 September 2000, Pubs and
Bars generated EBITDA of approximately £104m from sales of
approximately £341m which were up by 3.3 per cent. on the
same period last year.  High Street bars increased like-for-
like sales by 2.7 per cent. with Whitbread Pub Partnerships
up by 2.3 per cent. and Pubs Inn-Line declining marginally
by 0.6 per cent.  The Board believes these figures
demonstrate superior performance when compared with Pubs and
Bars' principal competitors.



Appendix - Highlights from the estimated Interim Results for
the six months to 2 September 2000

The interim results for the six months to 2 September 2000
will be published on 31 October 2000.  While the figures
have yet to be finalised the following represent the Board's
current estimates.

For the six months to 2 September 2000, the Group's profit
before exceptional items and tax will be not less than
£181m.

The following is segmental information for the six months to
2 September 2000 together with the figures for the prior
half year restated for FRS15 (Tangible Fixed Assets) and
UITF 24 (Accounting for start up costs).

£m                        Sales            EBITDA             EBIT
First half           2000/01  1999/00  2000/01 1999/00  2000/01  1999/00
                                                                
Hotels                   219      128       65      35       46       25
                                                                        
Restaurants              563      521       93      86       66       61
                                                                        
Sports, Health &          67       46       22      16       13       10
Fitness
                                                                        
                                                                        
Future Whitbread                                                        
Operating Divisions      849      695      180     137      125       96
                                                                        
Pubs and Bars            341      330      104     101       88       86
                                                                        

N.B. EBIT and EBITDA in the table above and elsewhere in
     this announcement are stated before exceptional items.

The  interim dividend will be announced as normal  with  the
half year results on 31 October 2000.


Enquiries
Whitbread PLC
David Thomas, Chief Executive           [phone]
David Reed, Director of Corporate       [phone]
Affairs

Dresdner Kleinwort Benson               [phone]
David Barclay
Nigel Binks

Gavin Anderson & Company                [phone]
Howard Lee
Chris Salt
Laura Hickman
Fiona Grant Duff

Kleinwort Benson Limited ('Dresdner Kleinwort Benson'),
which is regulated in the United Kingdom by the Securities
and Futures Authority Limited, is acting for Whitbread and
for no one else in relation to the matters discussed herein
and will not be responsible to anyone other than Whitbread
for providing the protections afforded to its customers or
for providing advice in relation to the matters discussed
herein.