Whitbread declared it had made "excellent progress" in the first half of its financial year, with pre-tax profits from the group's continuing operations up nearly a quarter at £123.3m.
Total revenues for the six months to August 28, 2008, rose 12.6 per cent to £682.2m, with group like-for-like sales up seven per cent.
Whitbread's pub restaurants saw overall revenues up 6.4 per cent, with like-for-like sales up 4.5 per cent, versus a 1.5 per cent increase in the same period last year.
Restaurant covers were up 8.4 per cent, following a revamp of a number of the group's brands and the introduction of new menus.
Anthony Hapgood, Whitbread's chairman, said the group had made "excellent progress" in its first half, with "improved productivity and cost management" leading to an increase in operating margins, up from 19.3 per cent last year to 20 per cent.
He said the group had "strong, leading brands" and while operating in "challenging conditions" was making good progress in "value for money sectors".
Whitbread said it was on course to deliver around £25m-worth of cost savings following an organisational review, which among other strategic changes led to a combination of the group's hotel and pub restaurant divisions.
The group said it had last month completed a deal to exchange 44 of its standalone pub restaurants with Mitchells & Butlers (M&B) for 21 M&B Holiday Inn Express hotels.
The move has added a further 1,245 rooms to Whitbread's portfolio, with the operator looking to have around 40,000 rooms by the end of the year.
Whitbread's Premier Inn turnover rose 17.8 per cent to £311m, with like-for-like growth up 10.1 per cent, versus growth of 10.9 per cent last year.
Joint pub restaurant/hotel sites accounted for 312 of the group's 366 outlets.
Whitbread's Costa coffee operation saw overall turnover up 25.6 per cent, with 84 new UK outlets opened in the period, although like-for-like sales growth dipped from 6.8 per cent to 3.7 per cent.
The City reacted positively to Whitbread's results, albeit with some caveats.
Blue Oar Securities' Mark Brumby noted there was little guidance as to current trading, "nor is the position of Robert Tchenguiz and his three per cent stake clarified.
"Nevertheless, Whitbread continues to offer a relatively safe haven in what is developing into a rather nasty storm".
Deutsche Bank's Geof Collyer said due to a build up of costs pressures he was downgrading his forecasts for the group's earnings in 2010.
But he said he was retaining his faith in the group's business model, "which we continue to see as one of the more robust groups with a predominantly UK consumer facing business".
Whitbread's shares were up four per cent at 1,010p.