Big expansion planned at Whitbread as profits soar by 77%

29 April 2010 by
Big expansion planned at Whitbread as profits soar by 77%

Whitbread is targeting a 32% expansion in its Premier Inn hotel brand to 55,000 rooms in the UK by 2015, and could increase its Costa brand to 3,000 stores worldwide over the same period.

The news came as the group announced that total revenue climbed by 7.5% to almost £1.44b in 2009, thanks to the expansion of its Premier Inn, Costa and restaurant brands.

The group also pointed to improving like-for-like sales in the final quarter of the year, following a tough start to the year, which meant that overall like-for-like sales were down just 0.5% in 2009.

Pre-tax profit before exceptional items was also up by 77% to £160m compared with £90.3m in 2008/09 and underlying profit, which excludes exceptional items and the impact of pension finance costs, rose by 6.6% to £239m.

Commenting on the results, outgoing chief executive Alan Parker said: "Whitbread performed strongly in the most challenging hotel and restaurant trading conditions for a generation. Underlying profits have been increased by virtue of outperforming our markets and improving operating efficiency.

"We are confident that we have the right hospitality brands, positioned to offer value for money in attractive, underpenetrated and growing segments of the market."

Parker is set to be replaced by EasyJet boss Andy Harrison when he retires in November.

Premier Inn

Regional revpar at the budget hotel chain was down 6.4% during the year, which Whitbread claimed was better than the average decline of 8.5% in the regional budget hotel sector and 9.6% in the whole regional hotel market.

Sales for the year rose by 4.7% to £629.8m, although like-for-like sale were down 4.3%.

Whitbread also revealed that it planned to expand its number of UK rooms by 2,500 over 2010/11 and to spend an additional £8m on marketing the brand over the same period. It is targeting expansion to 55,000 rooms in the UK by the end of 2014/15, as well as international expansion.

Over the course of 2009, Whitbread said Premier Inn had opened 2,400 new rooms and "secured 10,000 rooms in the pipeline."

Costa Coffee

Costa saw operating profits soar by 60% to £36.2m in 2009, with revenues up 23.4% to £340.9m.

It increased store numbers by 16% in 2010/11 and is targeting an 88% increase to 3,000 stores worldwide by 2014/15. Whitbread plans expansion in China, India, Russia, the Middle East and Central Europe.

It plans to open 130 stores in the UK in 2010/11.


Whitbread's restaurants, which include the Beefeater, Brewer's Fayre and Table Table brands saw a more modest 1.3% growth in revenue to £466.2m. Like-for-like sales growth climbed by 1.7%.

In 2009/10 the company opened five new restaurants, taking its total to 373. Of those, 333 are located next to a Premier Inn.

Costa Coffee continues to drive sales growth at Whitbread >>

EasyJet boss Andy Harrison to succeed Alan Parker at Whitbread >>

Leading pub and restaurant groups boost December sales >>

By Neil Gerrard

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