Leisure group Whitbread has enjoyed a stratospheric return to form in the years since the recession, with growth in both its Costa Coffee and Premier Inn chains helping to consistently boost annual profits.
The latest set of results, which will be the last released under outgoing chief executive Andy Harrison, show that this momentum has continued significantly better than analysts initially expected.
During the six months to the 27th of August 2015, underlying pre-tax profits climbed by 13.8 per cent to £291 million, comfortably ahead of the £289 million predicted by analysts and a marked rise when compared to the first half of 2014’s £256 million total. Correspondingly, revenues grew by 11.3 per cent to £1.44 billion against last year’s £1.23 billion, allowing for further growth within the group’s major brands.
Once again, Costa played a major role in the group’s success, with total sales rising by 16.2 per cent and UK like for like sales by 4.4 per cent. However, Premier Inn remains hot on the heels of the coffee chain, achieving total sales growth of 12.6 per cent and UK like for like sales growth of 5.0 per cent.
Chief executive Andy Harrison revealed that both chains remain well on track to meet growth milestones in 2018 and 2020 which, if realised, will create around 15,000 new jobs in the UK over the next five years.
He says; “Our two leading brands have delivered strong organic growth and continue to win market share.
“This year we plan to invest around £700 million in driving our organic growth and further improving the quality and consistency of our customer experience – we expect to open around 5,500 net new UK rooms and around 220 net new Costa stores worldwide.
“We continue to focus on driving long term organic growth, financed from our own resources and delivering a good return on capital to create substantial value for our shareholders.”
Since Mr Harrison took the helm as chief executive in 2010, both Costa and Premier Inn have enjoyed hugely successful expansion programmes and have been able to lift market share significantly, to the extent that both are now leaders in their respective fields.
Mr Harrison will be replaced as chief executive on the 7th of December this year by Alison Brittain, who was formerly the head of Lloyds Banking Group’s retail business.
Whitbread chairman Richard Baker thanked Mr Harrison for his performance, saying; “I would like to take this opportunity to thank Andy on behalf of the Board and our shareholders for his outstanding contribution to Whitbread’s success over the past five years.
“Andy has focused the Company on the expansion of the successful Costa and Premier Inn brands, putting team members and customers right at the heart of Whitbread.
“Andy joined a good company five years ago and, when he leaves us in a few weeks, he will leave it an even better company, with excellent foundations for future profitable growth.”
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