Whitbread says profits at top end of expectations as Costa’s coffee pours out

The company, which has nearly 60,000 rooms under the Premier Inn brand, said its overall performance in the final quarter of its financial year remained strong with growth of 5.8 per cent on a like-for-like basis.

Whitbread now believes profits will be at the top end of City expectations as it continues a run of form which has helped shares lift 22 per cent in the last year.

Premier Inn grew its total sales by 16.5 per cent – with like for like sales growth of 8.6 per cent – after increasing its occupancy rate by three percentage points to more than 71 per cent and achieving a 4.3 per cent rise in its room rate.

In the UK regions it grew total sales by 14.6 per cent in the quarter, with growth in revenues per available room of 9 per cent alongside occupancy of 70.1 per cent.

The company expects to open about 4,500 new UK rooms in the year to the end of this month before adding a further 5,500 rooms over the next year.

At Costa, which has been successful in tapping into Britain’s coffee shop culture, like-for-like sales were up 6.9 per cent in the quarter.

It is on track to add 230 new Costa stores to its 3,000 strong global estate in the current year and hopes to achieve the net addition of 250 in the next year.

The company’s restaurants, including Brewers Fayre and Beefeater, achieved like-for-like sales growth of 0.6 per cent despite tough comparisons with a year ago.

Whitbread said it expected capital investment to rise from £575m in the year to end February to £700m in its new fiscal year as it steps up hotel expansion.

Whitbread added: “We are investing to improve our customer propositions even further and in our ambitious organic network expansion.”