Whitbread enjoys Costa boost

Profits at leisure group Whitbread steamed ahead today after another “outstanding” year for coffee house Costa.

The hotels and restaurants business posted a surplus of £320.1 million for the year to 1 March, up 11 per cent after Costa’s sales jumped 27.5 per cent and its profits lifted 38 per cent.

Premier Inn also contributed to the improvement as Whitbread’s hotels and restaurants division, which includes Beefeater and Brewers Fayre, grew profits by 4 per cent to £295.6m.

This was after Premier’s key industry measure of revenues per available room improved by 1.8 per cent in the year, with an increase of 0.8 per cent in the regions and 7.3 per cent in London.

Premier Inn is in the midst of aggressive expansion plans to add 10,000 rooms, after creating more than 4,000 rooms and 29 hotels in the past year, bringing its total to more than 47,000.

Premier has benefited from customers looking for cheap deals and an advertising campaign featuring comedian Lenny Henry, but sales have slowed in recent months and its restaurant division has also come under pressure as food and fuel costs rise.

Costa took its total number of worldwide stores to around 2,200 in the past financial year and plans to open 350 sites in the current year.