Whitbread grows H1 market share at Premier Inn and Costa

22nd Oct 2013 07:12

Whitbread's interim earnings rose ahead of expectations as its Premier Inns hotels and Costa coffee shops continued to grab market share.Despite strong competition in the hotel market, with increasingly strong performance from rivals Travelodge and Accor/Ibis, Premier Inn opened 12 new hotels and contributed a 12.2% increase in total sales. This, along with 152 new coffee shops and total system sales growth of 19.5% for Costa, helped lift group revenues 12.4% to £1.15bn in the six months to August 29th. Chief Executive Andy Harrison said the 12.6% increase in underlying pre-tax profits to £216.1m was from a combination of organic expansion of the estate and good like-for-like sales growth.Like for like sales grew by 3.3% at Premier Inn, with an increase in occupancy to 80.3%, while Costa's like-for-likes were up 5.5% as it opened its 1,000th international store, in Bangkok. Harrison said: "Since the onset of the recession in 2008/9, Whitbread has grown its sales and underlying pre-tax profits by 11.1% and 12.0% per annum respectively, demonstrating the strength of the business and our leading market positions." He added: "This good first half performance puts us on track to deliver this year's business plan and we remain on the right trajectory for our 2016 and 2018 growth milestones. "Our combination of strong organic growth, good returns on capital and strong cash flow should continue to create substantial shareholder value."Cash flow from operations was up 7.9% to £308m, enabling £122m spending on the estate.Basic earnings per share were up 4.2% to 99.33p and the board proposed an 11.8% increase in the half-year dividend to 21.8p.OH