Whitbread shares jump on Costa and Inn sales

Whitbread’s profit rose about 14% in the first half as new openings and growing demand at both its Premier Inn hotels and the Costa Coffee chain helped send sales up strongly.

Britain’s biggest hotel and coffee shop operator said it remained on track to deliver full-year results in line with expectations.

Shares in the company rose as much as 3% yesterday, making it the top FTSE-100 gainer on the London Stock Exchange.

The group, which is expanding its presence in the Middle East, South East Asia, Germany, and India, expects to open around 50 new stores in China but added that there had been a “slight softening” in its performance due to the slowdown in the economy.

“We have got a strong store network, not just in the major cities but in some of the tier 2 cities as well ... Chinese consumers love Costa,” CEO Andy Harrison said.

The company increased its expansion targets for both its businesses earlier this year, with a focus on London for Premier Inn and an overseas boost for Costa, which now has a presence in 29 countries outside the UK.

Whitbread’s pre-tax profit rose to £291.3m (€396.8m) in the six months to August 27, from £256m a year earlier. Revenue rose 11.3% £1.43bn, reflecting sales growth of 12.6% and 16.2% at Premier Inn and Costa Coffee.