ShoreCap sees less upside at Whitbread after first quarter slowdown

16th Jun 2015 09:46

First-quarter growth at leisure group Whitbread was slightly below forecasts by Shore Capital, which kept a 'hold' rating on the Costa and Premier Inn owner.Total sales increased by 12.5% in the 13 weeks ended 28 May, as 17.2% growth at Costa and a 14.3% improvement at Premier Inn made up for just 1.6% higher sales at Whitbread's restaurants division.Group like-for-like sales were up 4.3%.ShoreCap analyst Greg Johnson said like-for-like sales growth of 4.3% is "consistent with our full-year expectations of growth of c4-5%, but below the 6.5% reported in the last financial year and our expectations of c5% for the quarter".He said the update was broadly in keeping with full-year forecasts for 14% pre-tax profit growth to £556m, but said "there appears less scope for upgrades as the year progresses".Johnson said: "Although the trading outlook is favourable and the group's five-year expansion plans appear deliverable we continue to believe that the market will at some point question the long-term growth potential in the UK (one in seven room nights in the UK could be spent in a Premier Inn by the end of the decade) and focus on its international expansion plans...of which the jury is very much out."The stock was down 0.6% at 5,010p by 10:27.