Costa coffee and Premier Inn boost Whitbread profits to £546m
Costa Coffee owner Whitbread has announced that underlying annual pre-tax profits rose 11.9% to £546.3 million, driven by strong growth at the coffee chain and its Premier Inn hotels business.
Operating profit at Costa rose 15.8% to £153.5 million on turnover of £1.6 billion.
Sales across Whitbread grew 12% to £2.9 billion.
Chief executive Alison Brittain said she would now turn her attention to growing the business further, targeting around £2.5 billion of sales at Costa by 2020 and ramping up expansion at Premier Inn.
She said: "Both Premier Inn and Costa benefit from attractive market growth opportunities and we will continue to capitalise on these by developing our network and brand strength as we fulfil our ambitions to reach circa 85,000 UK hotel rooms and circa £2.5 billion system sales in Costa by 2020."
City analysts welcomed the results.
Steve Clayton, head of equity research at Hargreaves Lansdown, said: "Costa is busily slaking the nation's never-ending thirst for caffeine - think of it as an investment play on the UK's long-hours work culture.
"The balance sheet is strong, with plenty of freehold hotel assets, so Whitbread looks capable of funding its growth, without recourse to shareholders."