29th Apr 2014 09:25
LONDON (Alliance News) - Whitbread PLC Tuesday reported double-digit growth in both profits and revenue for its recent financial year, driven by a strong performance from both its Premier Inn hotels business and its coffee chain Costa Coffee, as it continued to win market share and expand its businesses.
The hotel, restaurant and coffee chain operator delivered another strong financial performance in the financial year ended February 27, and declared a 20% increase in its full year dividend to 68.80 pence per share, while highlighting a confident outlook for its key growth driving businesses.
"Once again strong cash flow funded the necessary capital investment for our growth engines, Premier Inn and Costa, to increase their share of the market. I am confident that the brand strength of Premier Inn and Costa will continue to fuel the company's growth into the future," said Chairman Anthony Habgood in a statement.
Whitbread also said the good trading momentum has continued into the new financial year, with good trading in the first two months of the year helped by relatively soft comparatives, although the group warned that trading will become tougher as it moves in the second half of the year, where comparatives are stronger.
The group continues to invest heavily in all its businesses. For the year ended February 27, the hospitality brand owner reported a pretax profit of GBP347.0 million, compared with a pretax profit of GBP343.2 million the prior year.
On an underlying basis - which excludes amortisation of acquired intangibles, exceptional items and pension finance costs - its pretax profit rose 17% to GBP411.8 million, up from GBP353.4 million the prior year, beating analysts expectations, as consensus was for an underlying pretax profit of GBP402 million.
Its profit after tax and exceptional costs was up 11% to GBP323.4 million.
Total revenue rose 13% to GBP2.29 billion, up from GBP1.03 billion the prior year, boosted by new site openings across its business portfolio, and a 4.2% increase in group like-for-like sales.
"We had a strong finish to last year, with all our brands performing well, boosted by good Christmas and New Year campaigns and helpful weather comparatives," said Chief Executive Andy Harrison in a statement.
During the year, Whitbread said its hotels and restaurants business delivered a good performance, with revenue increasing by 9.8% to GBP1.49 billion, and like for like sales growing by 3.7%.
The group said its Premier Inn hotels saw a 13% increase in total sales for the year to GBP967.9 million, and a 5% increase in like-for-like sales, driven by its London hotels and boosted by the opening of 23 net new hotels, with 3,955 new rooms across its hotel portfolio.
Whitbread said its continued to win market share in both London and the UK regions, which increased its total room stock by 6.5%, while delivering total revenue per available room growth of 5.4% and as well as occupancy growth.
The group, which also owns restaurant brands Brewers Fayre and Beefeater, has been investing its its restaurant business, by improving its food, menu offering and branding.
Sales at its Costa Coffee chain grew by a strong 20%, driven by like-for-like sales growth of 5.7% and a strong store opening programme. Total worldwide system sales grew by 19% to GBP1.2 billion, while Whitbread said that it is on track to reach its milestone of around GBP2.0 billion of system sales by 2018.
The group said that total UK retail sales for Costa Coffee grew by 17%, boosted by 5% growth in transactions per store.
"Our strong organic growth is continuing and we extended our lead in the UK with an additional 177 net new stores in the year, taking the total to 1,755. We expect our number of UK stores to increase to over 2,200 by 2018," it said in a statement.
The group said it drove its net debt down by GBP79.5 million by year end to GBP391.6 million, while a strong cash flow from its operations funded capital investment of GBP306.2 million during the year, GBP231.1 million of which it spent on its hotels and restaurants business and GBP74.2 million on its coffee chain.
Whitbread said it is on track for its 2016 and 2018 growth milestones, with a committed pipeline of around 11,500 Premier Inn hotel rooms in store, as it plans to increase to the number of hotels to around 750 by 2016 and 830 by 2018. The Premier Inn business currently consists of 672 hotels.
The group said it plans to increase the number of room refurbishments in the year ahead, and new room openings, particularly with a focus on its key growth-driving London hotel market. It said it also willcontinue to increase its Premier Inn portfolio overseas, specifically targeting the Middle East, India and South East Asia.
Whitbread shares were up 0.5% at 4,080.00 pence per share Tuesday morning.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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