Member Article

Whitbread profits get a boost from coffee sales

The owner of Costa and Premier Inn has posted “double digit growth” in its half year results, after profits from its Italian coffee arm rose by 29.9%.

Whitbread bosses said a focus on customer service and strong branding was behind the company success, with total profits after tax up by 8.9% year-on-year to £173.4m.

The firm said its Premier Inn UK brand significantly outdid its competition with sales improvements of 12.9%, while its rival budget hotel company, Travelodge, underwent restructuring this year.

Over 1,500 more rooms were opened by Whitbread’s hotel arm, and 141 new Costa shops were unveiled in the last six months to bring the total number up to 2,344.

Employment prospects also fared well in the group, as 1,500 new jobs were created, and the firm has plans to open up a further 10,000 positions over the next three years.

Whitbread’s Chairman, Anthony Habgood said the business would continue to use a strong balance sheet to maintain good results, as well as “developing our people and renewing our estate,” he said.

Andy Harrison, Chief Executive at Whitbread commented: “The combination of our strong sales growth and good returns drove an 11% increase in cash flow from operations to £285.3 million.

“This created the financial capacity to continue investing in our brands and the quality and breadth of our estate, finance our organic growth and the 11.4% increase in the interim dividend.”

He continued: “We expect continuing rapid growth in total sales on track towards our five year milestones.

“Premier Inn is benefitting from a structural shift in the UK towards strong branded hotels. Costa’s growth is supported by its leading UK position in a robust category, together with exciting international opportunities.

“This growth in total sales, coupled with our clear focus on good financial returns, is creating substantial value.”

This was posted in Bdaily's Members' News section by Miranda Dobson .