Tasty results for Unilever and Whitbread

Whitbread has announced its full-year and Unilever its quarterly results today, both reporting impressive growth.

by Michael Northcott
Last Updated: 20 Jan 2015

Good news today for Whitbread shareholders. Despite its exposure to the volatile UK high street, now officially in recession, Whitbread, which owns the Premier Inn, Beefeater Grill, and Costa Coffee chains, has bucked the general trend. It posted revenues up 11.2% to £1.77bn in 2011/12 up from £1.6bn in 2010/11. This is quite the coup, given the exposure of its brands to the financially ‘squeezed middle’.

CEO Andy Harrison must be thanking the heavens for coffee addicts. The company’s growth depended heavily on the success of Costa, which has opened 175 new stores in the UK and 157 overseas in the last year, and has seen total sales rise by 27.5% and like-for-like sales by 5.5%. The group’s hotel business is also growing fast, with 4,055 new rooms opened in the UK over the past year, taking the total in the UK and Ireland to 47,429. Harrison isn’t expecting a growth spurt off the back of the Olympics, however: only 25 of its 620 hotels in the UK and Ireland are located close to the Stratford site.

A similar success story was announced this morning by Unilever in its first-quarter results: an 8.4% rise in first-quarter sales and a turnover rise of 11.9% to €12.1bn. The company attributes a large portion of the growth to improved performance in emerging markets, where sales grew 11.9%. Indonesia, India, Vietnam, Saudi Arabia and Turkey were collectively the best performing markets, contributing €4.82bn to the total.

CEO Paul Polman reckons the company’s growth is down to a long-term view over short-term rewards. He said: ‘The external macro-economic environment remains difficult and higher input cost headwinds persist. We continue to implement our strategy with discipline and to manage our brands for the long-term health of the business.’

With global economic woes compounded by the slower pace of growth in countries with developed markets, Unilever is yet another company showing that emerging economies are a good bet, even in tough times.

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