Whitbread shares down after profit jump

<p>Whitbread shares have retreated after the company posted a profit jump.</p>

Shares in Whitbread are lower on the London Stock Exchange this morning (October 23rd) following news the company has enjoyed higher profits.

This is down to a significant increase in sales at the coffee chain Costa, which helped drive half-year profits and revenues at the business.

Whitbread – which also owns Premier Inn and Beefeater Grill and served more than 21 million customers every month – said its underlying pre-tax profit has increased by 10.6 per cent to £193.4 million in the six months to August 30th.

At Costa, underlying profits rose by 29.9 per cent to £36.1 million, marking the 42nd quarter the chain has experienced growth.

Premier Inn also saw a jump in sales, with its demand growing by 12.9 per cent with like-for-like sales growing by 3.7 per cent.

Total revenues at Whitbread now stand at £1.02 billion – which is a rise of 14.2 per cent.

The company is looking to capitalise on its success and the popularity of its brands by expanding. It is looking to further its growth in China, where it currently has 200 Costa outlets, while it will be creating 10,000 more jobs in the coming three years.

It has made 1,500 new positions in the UK and is aiming to add 4,500 rooms at its Premier Inn hotels and open 350 more Costa outlets this year.

Chief executive Andy Harrison said Whitbread's profit report points to a "strong first half performance" while the economic backdrop remains bleak, while he added Costa's performance over recent years as "outstanding".

"Costa's growth is supported by its leading UK position in a robust category, together with exciting international opportunities. This growth in total sales, coupled with our clear focus on good financial returns, is creating substantial value," he added.

At 10:50 BST on the London Stock Exchange, Whitbread's shares slipped by 1.4 per cent to 2290.00p per share, while the FTSE 100 index in London was also lower, retreating by 0.6 per cent to an index value of 5845.5 points.

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