Whitbread, which owns the Costa Coffee and Premier Inn chains, grew same-floorspace sales 3.5 per cent in its latest trading quarter, saying yesterday that it remained on track to post yearly results in line with market expectations.
Like-for-like sales at the Premier hotel chain climbed 4.7 per cent in the 13 weeks to 26 November, while new Whitbread chief executive Alison Brittain blamed more modest sales growth of 2.5 per cent at Costa on “soft” trading last month.
Total group sales rose 10.4 per cent, while Brittain, who was poached to replace Andy Harrison from Lloyds Bank, where she ran the bank’s retail arm, said she had “ambitious” growth milestones for one of Britain’s biggest leisure business.
Whitbread said it intends to open about 5,500 new Premier Inn rooms and 200 net new Costa stores worldwide this year. “Our committed UK hotel pipeline has grown to 14,588 rooms,” the group added, and its global total of Premier Inn rooms stood at 62,827 at 26 November, with 1,818 UK rooms opened in the year to date.
Brittain added that it was important to keep Premier and Costa brands “relevant and fresh”, and that she was pleased with Premier’s new hub hotel concept, the Costa Fresco format with store-baked food, and a digital breakfast-ordering trial at Costa.
Analyst reaction to the latest trading numbers was mixed. It comes after a period of volatility for the Whitbread share price amid concerns over competition from the likes of Airbnb threatening Premier’s revenue per room – a key measure for the hotels industry.
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said Whitbread was “still delivering its expansion at a blistering pace, with its financial strength enabling it to self-fund its expansion”.
He cited Costa continuing “its quest for international domination,” with total sales up 15.3 per cent in the year to date. However, Hunter warned that overall market concerns “have not been vindicated by this update”.
Greg Johnson of Shore Capital described the latest trading figures as “solid”, with growth broadly in line with his team’s forecast for the current year’s pre-tax profit of £556 million “and the next two years’ expectations”.