LONDON, UK – Whitbread, the UK’s largest hotel and coffee shop operator, reported interim earnings ahead of expectations. The owner of Costa Coffee and Premier Inns hotels saw a 12.6% rise in underlying pre-tax profits to £216.1m in the first half year.
Despite strong competition in the hotel market, 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 increase in underlying pre-tax profits was from a combination of organic expansion of the estate and good like-for-like sales growth.
“Whitbread has delivered another good performance with double digit growth – said Harrison – 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.”
“This is another good set of results with our leading brands going from strength to strength – said Whitbread’s Chairman Anthony Habgood – We continue to have high levels of customer satisfaction and brand preference together with excellent employee engagement. Our financial strength enables us to invest consistently in the business and gain market share while maintaining prudent debt levels.We have increased the interim dividend by 11.8%.”
Financial Highlights
- Total revenue up 12.4% to £1,144.7 million (2012/13: £1,018.1 million)
- Group like for like sales up 2.8%
- Underlying profit before tax up 12.6% to £216.1 million (2012/133: £191.9 million)
- Underlying diluted EPS up 12.2% to 90.92p (2012/13: 81.04p)
- Interim dividend up 11.8% to 21.80p (2012/13: 19.50p)
- Whitbread Hotels and Restaurants underlying profit up 7.9% to £195.7 million (2012/13: £181.3 million)
- Costa underlying profit up 20.5% to £43.5 million (2012/13: £36.1 million)
- Premier Inn total sales up 12.2% and like for like sales up 3.3%
- Costa total sales up 20.9%, worldwide system sales up 19.5% and like for like sales up 5.5%
- Group return on capital increased to 14.4% (2012/13: 13.7%)
- Strong cash flow from operations up 7.9% to £307.7 million (2012/13: £285.3 million)
- Net debt £430.1 million (£471.1 million at 28th February 2013);
Statutory Highlights
- Profit after tax and exceptional items for the half year up 4.5% to £175.9 million (2012/13: £168.3 million)
- Total basic EPS 99.33p up 4.2% (2012/13: 95.32p)
On track for our 2016 and 2018 milestones
- Premier Inn opened 1,368 net UK rooms taking the total to 53,039. With a secured pipeline of over 10,500 rooms the 2016 milestone of 65,000 rooms is in sight
- Costa added 153 net new coffee shops taking the total to 2,680 worldwide
- 1,200 new UK jobs created by Whitbread brands, with a further 10,000 expected over the next three years
Costa delivered another excellent performance in the first half with underlying profits up 20.5% to £43.5 million. Total sales increased by 20.9% driven by good like for like growth and a strong store opening programme with 153 net new coffee shops. Total worldwide system sales grew by 19.5% to £569.2 million. Costa is the UK’s leading coffee shop and has delivered another strong performance, with total UK retail sales up 15.8% and like for like sales in UK equity stores up 5.5% mainly as a result of a 5.1% growth in transactions.
Costa Enterprises
Costa Enterprises also had great success during the first half of the year with system sales up 25.1%. Costa Express delivered a strong performance as it achieved its 2016 target of 3,000 machines ahead of plan with the addition of 582 net new units during the first half, taking the total to 3,142.
For the full year it plans to have installed a total of 850 new machines. A strong performance was also delivered in the Costa wholesale and Corporate Franchise businesses.
Costa EMEI
In Costa EMEI (Europe, Middle East and India) the total system sales rose by 10.2% during the first half. Franchise operations grew total system sales by 16.0% with a particularly strong performance in the Middle East and Russia.
