Costa owner Whitbread expects annual results at top end of forecasts

Hospitality group Whitbread said it expects full-year results to come in at the top end of expectations after a strong fourth quarter from its Premier Inn and Costa brands.

Sales growth picked up to 14.3% in the 11 weeks to 12 February, from the 13% combined growth seen over the first three quarters.

Results were helped by a 19.8% jump in sales at Costa and a 16.5% increase at Premier Inn, with both chains improving from the 16.9% and 14.9% year-to-date growth rates seen at the third-quarter stage.

This offset a tailing off of growth at its restaurant division which grew sales by just 1.6%, compared with 2.3% growth over the first three quarters.

Overall, group like-for-like sales were 5.8% higher than the same point last year, down slightly from 6% at the third-quarter stage.

“Premier Inn and Costa continue to grow rapidly, winning UK market share, with Premier Inn also benefitting from the recovery in the UK regional hotel market,” said chief executive Andy Harrison.

“With this strong performance we expect to deliver full-year results towards the top end of current expectations.”

Premier Inn’s performance was boosted by a 3.0 percentage point increase in occupancy to 71.1% and a 4.3% rise in average room rates, driving the revenue per available room up 8.9%.

Costa, meanwhile, was helped by a “well-received” Christmas campaign with customers.

However, growth in the restaurants division, where Whitbread operates as Beefeater through its Beefeater, Brewers Fayre, Table Table and Taybarns chains, was dampened by a “softer” performance in January.