Whitbread can smell the coffee as Costa demand rockets

The hotels and restaurants business posted a surplus of £320.1m for the year to March 1, up 11 per cent after Costa’s sales jumped 27.5 per cent and its profits lifted 38 per cent. Premier Inn also contributed to the improvement as Whitbread’s hotels and restaurants division, which includes Beefeater and Brewers Fayre, grew profits by 4 per cent to £295.6m.

This was after Premier’s key industry measure of revenues per available room improved by 1.8 per cent in the year, with an increase of 0.8 per cent in the regions and 7.3 per cent in London.

Premier Inn is in the midst of aggressive expansion plans to add 10,000 new rooms, after creating more than 4,000 rooms and 29 new hotels in the last year, bringing its total to more than 47,000.

Premier has benefited from customers looking for cheap deals and an advertising campaign featuring comedian Lenny Henry, but sales have slowed in recent months and its restaurant division has also come under pressure as food and fuel costs rise.

Costa took its total number of worldwide stores to around 2,200 in the last financial year and plans to open 350 sites in the current year.

Chief executive Andy Harrison said the company’s five-year milestones remain in place, with Premier Inn on track for 65,000 rooms by 2016.

Last year, Costa grew its network by 18 per cent and should have 3,500 stores worldwide and around 3,000 Costa Express machines within four years.