Whitbread, the owner of Costa Coffee and the Premier Inn hotel chain reported a 12.6 per cent rise in first-half profit after opening several new coffee outlets.
The UK’s largest hotel and coffee shop operator announced a pre-tax profit of £216.1m ($349m) in the six months up to 29 August. The profit beat analysts’ predictions of £213m and its £191.1m figure for the same six-month period last year.
Whitbread’s growth was also helped by the construction of its Premier Inn hotels.
Total sales at Costa Coffee were up by 20.9 per cent, and were 12.2 per cent higher at Premier Inn.
Commenting on the figures, chief executive Andy Harrison said: “Our combination of strong organic growth, good returns on capital and strong cash flow should continue to create substantial shareholder value.”
Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said the figures showed a “firm statement of intent in [Whitbread] achieving its strategic goals”, alongside Whitbread’s confirmation it will not give up Costa, the “jewel in its crown”.
“The Whitbread growth story continues to drive on,” Mr Hunter added.
Meanwhile Premier Inn has set out plans to build 170 new hotels in the UK by 2018. Andy Harrison, Whitbread’s chief executive said Premier Inn has a “committed pipeline of over 10,500 rooms” and aims to create 75,000 hotel rooms in the UK by 2018.
The hotel operator plans to build 170 new hotels in the UK over the next five years to have 830 locations by 2018. Around 3000 rooms will be in its new compact city centre hotel format, Hub by Premier Inn. Construction of the first Hub hotel at St Martins Lane, London, began earlier this year and is due to open in the summer of 2014.
In the first half of 2013, Premier Inn opened 12 new hotels and 1,368 UK rooms, taking the total to 53,039 hotel rooms across its 660 UK hotels.
Across the company, cash flow increased by 7.9 per cent to £307.7m in the six months to 31 August, which funded capital expenditure of £121.7m to develop and preserve the quality of Whitbread’s estate.
For the full year, Premier Inn hotel chain is expected to spend £80m on maintenance up from £75m last year.
