Premier Inn drives strong third quarter growth for Whitbread

Whitbread’s third quarter has seen a 10.4% increase in sales, driven by strong growth in Premier Inn.

The FTSE 100 company, which owns the hotel brand as well as Costa and a handful of restaurant brands, posted an interim management statement for the 13 weeks to 26 November.

Premier Inn’s total sales were up 10.8% for the quarter, contributing to the hotel’s total sales for the year to date up 11.9%.

The company said it was driven by a 7.4% increase in rooms available as well as a 14.8% increase in sales in London.

Costa also brewed some healthy sales figures, with total sales up 13.8% in a quarter that included a soft November.

Whitbread said it is on track to deliver its growth milestones, as it plans to open around 5,500 new Premier Inn rooms and around 200 new Costa stores worldwide.

The company’s new chief executive Alison Brittain said it has been another good quarter.

“Our brands continue to win market share and we are on track to deliver full year results in line with market expectations."

She also said the company has built “the nation's most loved coffee shop and hotel brands” and laid out some clear and ambitious growth milestones.

“I am looking forward to building on the foundations of the business by investing in our people, our network and our infrastructure to enhance our customer offer, further strengthen our brands and deliver profitable growth.”

Hargreaves Lansdown’s Richard Hunter said the company continues to flex its muscles as the hotel and coffee brands underpin a firm financial footing.

But it comes against a backdrop of recent price volatility and he said the market’s concerns have not been vindicated by the results.

“Within the Hotels business, like for like sales, revenue per room and an accelerated expansion programme have enabled the continuation of strong growth, whilst from a broader perspective the possibility of consolidation within the industry adds some froth.

“Meanwhile, Costa continues on its quest for international domination, with worldwide total sales up more than 15% in the year to date.”

Hunter noted that the market consensus of the shares as a cautious buy could come under positive pressure following the results.

However Shore Capital noted that while life-for-like sales growth of 3.5% was consistent with full year estimates, it said Costa’s total sales were a little short of expectations.

Shares in Whitbread were down 115.72p (2.58%) at 0832 GMT to 4,363.28, also driven down by Barclays removing the stock from its recommended portfolio.