Whitbread plc (LON:WTB) has made a good start to the year, with strong growth in sales at its Premier Inn hotels chain, and although Costa Coffee saw its growth slow it was largely in-line with estimates.
In a trading update for the 13 weeks to June 1, the FTSE 100-listed firm reported total like-for-like sales growth of 2.9%, with Costa Coffee seeing a 1.1% rise, broadly matching a UBS forecast for around a 1.0% increase.
Meanwhile Premier Inn posted a 4.7% like-for-like sales increase, beating UBS's forecasts, although including the restaurants business – which was only up 0.7% - that growth was pegged back to 3.5%.
In Whitbread’s full-year results back in April, Premier Inn had seen like-for-like sales growth of 2.3%, while Costa Coffee’s UK like-for-like store sales were up 2.0%.
READ: Whitbread posts solid growth in profits, revenue, but stays cautious on year ahead
In early trading, Whitbread shares topped the FTSE 100 leader board, up 5.2%, or 199p to 4,052p.
In a note to clients reiterating a ‘buy’ rating on Whitbread, Shore Capital analyst Greg Johnson said: “Overall, decent statement (with PI strength offsetting continued subdued trading at Costa) which belies the recent weakness in the price especially given the property support.”
In today’s statement, Whitbread’s chief executive Alison Brittain said: “Premier Inn continued to win overall market share with strong sales growth of 9.2% as we benefitted from a resilient hotel market and the contribution from the c.9,000 rooms we opened over the last two years, which are maturing well.”
She added: “We were pleased that total UK occupancy was up compared to the first quarter last year at 79.2%, at the same time as we increased our capacity."
For Costa, the leisure group’s boss highlighted a “good performance in our expanding travel and drive thru channels.”
Costa Coffee seeing growth in China
Brittain said that, internationally, Costa, is seeing good progress in China with positive like-for-like sales growth in the country.
Meanwhile, in Germany, the firm’s Premier Inn hotel in Frankfurt is performing well and Whitbread is continuing to develop its current committed pipeline of five hotels.
The Whitbread boss said “We aim to accelerate the development of our international businesses in these attractive markets and continue to look for opportunities to grow more quickly.”
She concluded: “We have a clear plan to deliver growth in our existing estate and remain on track to open c.4,200 hotel rooms, 230-250 Costa coffee shops and install c.1,250 Costa Express machines this year."
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