Whitbread continues to deliver “ambitious organic growth plans”

<p>The group reports total sales growth of 11.1 per cent.</p>

Whitbread – the group behind Premier Inn and Costa Coffee – has reported its results for the 11 weeks to August 13th.

During the period, the group reports that it saw total sales up 11.1 per cent, while like-for-like sales were up by 3.3 per cent.

In a statement, chief executive Andy Harrison said that the company's positive first half performance means it is on track to deliver full-year expectations, along with ambitious growth milestones.

"This year we plan to open around 5,500 UK rooms, around 220 net new Costa stores worldwide and to install 700-800 new Costa Express machines. Our committed UK hotel pipeline has grown to 14,106 rooms.

Mr Harrison noted that Premier Inn's total sales grew by 11.6 per cent and rooms available grew by 7.9 per cent. He added that performance was particularly strong in London, where total sales grew by 21.1 per cent, driven by a 20.3 per cent growth in rooms available.

He noted that August is often affected by weather and holiday patterns. Trading this August was "softer than expected" across all brands compared to strong results for the month last year.

Costa grew its worldwide total sales by 16.7 per cent and like-for-like sales by 4.6 per cent over the previous 24 weeks.

National Living Wage

Whitbread has also announced some of its plans for dealing with the recently announced National Living Wage.

Beginning in April, employers will be required to pay £7.20 an hour to workers over the age of 25. This will rise to £9 an hour by 2020, replacing the £6.50 minimum wage.

The company says it will mitigate the substantial cost increase over time with a combination of productivity improvements, as well as investment in systems and training, efficiency savings and some price increases.

Further details on how the company will deal with the cost of the new National Living Wage will be provided when the company releases its Interim Results on October 20th.

At midday on Wednesday (September 9th), Whitbread's share prices were up to 4,701.64p.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.