Parker signs off in style at Whitbread

19th Oct 2010 07:15

First half underlying pre-tax profits from Premier Inn and Costa Coffee owner Whitbread were in line with market expectations but the company had a pleasant surprise on the dividend front.Group underlying profit before tax rose by 28.4% to £151.8m in the six months to 2 September from £118.2m in the corresponding period of last year. Underlying diluted earnings per share (EPS) rose by 29.5% to 61.27p. Broker Charles Stanley had forecast profit before tax of £150m and EPS of 60p. Nomura Securities went for £152m while Panmure Gordon predicted £145m and EPS of 58.1p.Revenue climbed 14.5% to £805.4m from £703.3m the year before. Like for like (LFL) sales rose 7.8%.At Premier Inn, sales rose 14.0%, driven by a combination of increased volumes and new units. Like for like sales increased by 10.1%. Sales at Whitbread's restaurants grew 4.5%, with like for like sales up 4.2%. At Costa, sales increased by 27.7%, with like for like sales up 8.5%.LFL occupancy at Premier Inn improved by 9.2 percentage points over the half year to 79.3%, tantalisingly close to the group's targeted 80% occupancy rate, though the final quarter of the financial year tends to be weaker and is likely to pull the full year occupancy level down.Net debt at the end of the reporting period was down to £467.2m from £513.4m at 4 March.The interim dividend, which most brokers had expected to be moved up to 10p or a little above has been hiked to 11.25p from 9.65p at the interim stage last year.In his last set of results as chief executive officer of the company Alan Parker said: "Our margins have improved as the benefits of both our structural and operating cost reduction programmes are realised. I am delighted that our return on invested capital has increased to 13.1%, well ahead of our cost of capital.""Whitbread has performed strongly in both good times and during the recession and is well placed to grow in the current environment. While the economic outlook remains uncertain, we are confident in the outturn for the year," Parker added.