Strong growth for Whitbread

Costa Coffee and Premier Inn group Whitbread today hailed double digit growth for the first half of the year, as underlying pre-tax profits grew almost 14% to £291.3 million.

Revenue across the business, which employs 48,500 people and services 27 million customers a month, grew by 11.3% to £1.44 billion.

The biggest growth was at Costa, which saw its underlying operating profit rocket by 28.4% to £67.3m as it opened up another 68 outlets just in the UK, where it has 1,999 of its coffee shops. It aims to have 2,500 by 2020, and create 15,000 new jobs by then.

Whitbread's bigger Premier Inn hotels business is also seeing growth as it refurbishes thousands of its hotel rooms and opens thousands more.

On a statutory basis, pre-tax profit was up 5.4% to £254.9m across the group after an expectional charge of £25.2m, mostly for 'onerous leases on historically disposed businesses' and regarding IT systems.

Whitbread chairman Richard Baker said: "Whitbread has produced another good set of results, demonstrating the strength of the Premier Inn and Costa brands. We are on track to deliver our growth milestones and will continue to invest in our people, our customer propositions and our systems to deliver profitable growth for our shareholders."

He also confirmed that Alison Brittain had joined Whitbread as chief executive designate on September 28 and will take over from Andy Harrison as head of the business on December 7.

Praising Mr Harrison for his work at Whitbread, Mr Baker added: "Andy has focused the company on the expansion of the successful Costa and Premier Inn brands, putting team members and customers right at the heart of Whitbread. Andy joined a good company five years ago and, when he leaves us in a few weeks, he will leave it an even better company, with excellent foundations for future profitable growth."

In his review of the last six months Mr Harrison said: "Whitbread has once again delivered double digit revenue and underlying profit growth. Group total sales grew by 11.3% to £1.4 billion with good like for like sales growth of 3.6%. This drove underlying earnings per share up 14.0% and the board has increased the interim dividend by 13.1%."

He added: "Trading momentum in the early weeks of the second half has been consistent with that seen across the first half. We remain on track to deliver full year results in line with expectations.

"This year we plan to invest around £700 million in driving our organic growth and further improving the quality and consistency of our customer experience. We expect to open around 5,500 net new UK rooms and around 220 net new Costa stores worldwide. We continue to focus on driving long term organic growth, financed from our own resources and delivering a good return on capital to create substantial value for our shareholders."