Hotel and coffee chain beats predictions with 11% rise in profits
The owner of Premier Inn and coffee chain Costa said half-year profits rose 11% after market-beating performances from its two leading brands.
Whitbread, which employs more than 40,000 people at 2,500 sites in the UK, achieved the haul of £193.4m for the six months to August 30 after total revenues climbed 14.2% to just above £1bn.
It said Premier Inn benefited from the UK's shift towards "strong branded hotels" as it overcame a decline in the wider market with growth of 2.4% in revenue per available room.
Premier, which has benefited from an advertising campaign featuring comedian Lenny Henry, opened another 1,500 rooms in the period, taking its total to 49.020. It has plans to take extend this figure to 65,000 rooms by 2016.
Whitbread said Costa delivered an "outstanding performance", with underlying profits up 30% to £36.1m.
The figure for Whitbread's hotels and restaurants, including Beefeater and Brewers Fayre, rose 8.5% to £181.3m.
The company said it expected Premier's sales growth in the second half of the year to be more moderate than the "high levels" seen in the first half.
Shares fell yesterday as investors reacted to the weaker hotels outlook and half-year figures slightly below some City forecasts.
Richard Hunter, head of UK equities at Hargreaves Lansdown stockbrokers, said: "Whitbread continues to appeal to the cash strapped consumer and the shares have reacted accordingly, having risen 39% over the last year as compared to a 7% hike in the wider FTSE 100 Index."
Costa's strong performance was partially driven by the poor summer weather as UK like-for-like sales increased by 6.8% in a period when it refurbished 91 stores and increased the estate by 87 sites.
There were also an additional 794 Costa Express sites, taking the total number of units to 1,986.