Whitbread sees profits rise

Like-for-like sales were up 3.3% in the half year. Profit after tax and exceptional items for the half year was £159.2m (2010/2011: £116m).

In the Hotels and Restaurants arm, underlying profits were up 8.5% to £167.1m, delivering a return on capital of 12.5%.Twelve new hotels and five restaurants were opened in the period.

However, there was a decline in like-for-like performance at its restaurants in an “increasingly value driven market”. Revenue in the restaurants arm was up 0.5% to £247.3m.

Whitbread revealed that its “brands with lower price points” are performing better and said its brand with the lowest spend per head - Brewer Fayre - is outperforming higher priced brands such as Beefeater and Table Table.

Its Brewers Fayre, Buffet Places concept, is “proving very popular” and there are plans to roll this out to another 25 sites from the current 77.

The shining star for Whitbread was its Costa coffee chain, which saw underlying profits up 41.8% to £27.8m, delivering a return on capital of 28.5% (2010/2011: 35.6%).

There was a 20% uplift in sales at former Coffee Nation units, bought by Whitbread in March, after they are rebranded to Costa Express, Whitbread said.

Andy Harrison, chief executive of Whitbread, said: “Whitbread traded well in the first half with a 10.7% growth in sales and a 15.2% increase in underlying profits.

“We are continuing to grow our business and this year we plan to open 4,000 new Premier Inn rooms and 14 new restaurants in the UK, together with 300 Costa stores worldwide.

“Our overall first half sales performance is the best guide to the Group’s underlying trading, although on a month by month basis trading continues to be variable in a challenging consumer environment. The first half performance puts us on track to deliver full year results in line with expectations.”