Davy Research

Whitbread

Three Cs of added value: Costa Coffee China
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Whitbread

DAVY VIEW

With Costa Coffee’s spin-off now set in motion, the key question for many investors is how much it is worth. While Costa’s UK business is better understood, partly due to greater disclosure, its international business and, in particular, its Chinese operation is not. Following our deep dive and channel check analysis, we believe that Costa Coffee China could be worth up to £248m in value (£1.35/share), a business many value at zero today. We also believe that this value will soon be better understood as improved disclosure is likely to be forthcoming as part of Costa’s spin-off process.

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  • RATINGS AND PRICE CORRECT AT TIME OF ISSUE


  • Whitbread

    Closing Price: 404600p

  • RATING 01/06/16

  • PREVIOUS RATING N/A

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