Costa Coffee addicts are boosting Whitbread's profits

The leisure group's underlying profits rose 16.5% to £411.8m, as more Brits swilled lattes and bedded down at Premier Inns.

by Rachel Savage
Last Updated: 17 Nov 2015

It is a truth universally acknowledged that bleary-eyed commuters are good for business. Whitbread’s sales surged 13% to £2.3bn and underlying profits climbed 16.5% to £411.8m in the year to February 27, as people quaffed 400 million cups of Costa coffee.

The coffee chain’s global sales rose 19.4% to £1.2bn and were up 5.7% on a like-for-like basis in the UK, stripping out the effect of 177 new stores. There are now 1,755 places Brits can get a Costa caffeine hit, which Whitbread is planning to increase to 2,200 by 2018.

Whitbread’s value hotel chain Premier Inns also did pretty well, with total sales up 13.4% to £967.9m as almost 4,000 new rooms were added around the world (most in the UK, where a net 23 new hotels were opened). The company is targeting 75,000 rooms in the UK by 2018 and currently has just over 55,000.

The solid results allowed the group to whack up the final dividend by 24%, meaning the total payouts for the year will be 19.9% higher than the previous 12 months. Investors gave the plan a somewhat modest nod of approval, with shares almost 1% higher in mid-morning trading. Perhaps they stayed off the double espressos…

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