Whitbread serves up solid growth in second quarter - UPDATE

9th Sep 2014 07:06

A buoyant UK hotel market and big events have boosted hotelier and restaurant owner Whitbread in the second quarter, but it cautioned that it was likely to have a tougher time in the second half.Whitbread, which owns Premier Inn, Costa Coffee and Beefeater, said an upturn in business confidence had boosted sales at Premier.In particular, the chain cashed in on the Commonwealth Games in Glasgow and big corporate events like the Farnborough Air Show in July.The budget hotel chain has about 700 hotels and expects to expand that to about 900 by 2017/18.Finance chief Nicholas Cadbury said its London hotels had done well for a while but hotels in the UK regions were catching up."Business confidence is coming back faster than consumer confidence," he told Digital Look News in a telephone interview.Cadbury said Costa was benefiting from people spending more leisure time in the high street, growing spending power among women and more people working on laptops and tablets in the company's coffee shops.In the next six months, Cadbury will have to try to match a strong performance last year, which benefited from mild weather."It will be a tougher second half for us," he said.Group like-for-like sales were up 6.8% in the period from the end of May until 14 August, compared to the 6.9% rate of growth in the first three months of the year.Total sales accelerated from the first quarter's 12.7% to 12.8% in the second, as a net 757 Premier Inn rooms were added and 167 Costa Coffee outlets. Total sales for the first 24 weeks of the year are therefore up 12.7% and like-for-likes 6.8%."Whitbread remains on track for another good year," said chief executive Andy Harrison. "Our strong brands continue to win market share, reinforced by ambitious organic network expansion.""We plan to open around 4,500 new Premier Inn rooms and five joint site restaurants along with around 300 net new Costa stores this year. Our committed pipeline has grown to around 13,000 UK rooms."Premier Inn grew total sales by 14.7% and like for like sales by 9.2% in the quarter, with management attributing an especially healthy UK hotel outside of London thanks to the improving economy and special events such as the Farnborough Airshow and Commonwealth Games.It had a strong combination of 5.6% growth in UK rooms available, an 8.6% growth in total revenue per avvailable room (revpar) and a rise in total occupancy of 3.1% points to an all-time high of 87%.The restaurant business also performed well, ahead of the Coffer Peach Tracker figures for the market, with like-for-like sales growth of 1.7%.Costa had a good summer with total sales growth of 17.8% and like-for-like UK sales growth of 7.3%, aided by weak comparatives from last year's warmer than average July.