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Tue 17th Jun 2014 - Breaking News - Whitbread trading update and SSP to float
Whitbread reports 6.9% like-for-like sales growth: Whitbread has reported a 6.9% increase in like-for-like sales in the 13 weeks to 29 May. The sales growth was led by Premier Inn with a 9.5% increase, followed by Costa where like-for-like sales were up by 4.5%, with its pub restaurants beating the industry benchmark with 4.4% of like-for-like growth. Andy Harrison, chief executive of Whitbread said: “Whitbread has started the year well, with total sales growth for the first quarter of 12.7% and strong like-for-like sales growth of 6.9%, as anticipated at our Annual Results announcement on 29 April. Premier Inn and Costa have continued on their rapid growth trajectory, underpinned by strong customer demand. Premier Inn grew total sales by 14.2%, with like for like sales growth of 9.5%, benefitting from a buoyant hotel market driven by continuing growth in London and clearer signs of economic recovery in the UK regions. Premier Inn grew total revpar by 8.8%, with 3.6% growth in London and 9.9% growth in the UK regions. Total occupancy rose by 4.2% pts to 80.7%. Our restaurants business also performed well with like-for-like sales growth of 4.4%, outperforming the industry benchmark, which was boosted by soft comparatives due to cold weather in Q1 last year. Costa once again extended its excellent track record, with total sales growth of 15.9% and like-for-like sales growth of 4.5%, against demanding comparatives from last year. Whitbread is well-positioned for another good year with our strong brands continuing to win market share, reinforced by ambitious organic network expansion. We currently have 43 new Premier Inn hotels under construction in the UK and expect to open around 4,500 new rooms this year, together with five joint site restaurants. Costa will open around 300 net new stores this year.” Whitbread reported the following trading highlights for the 13 weeks:
   
Hotels and Restaurants
• Premier Inn has continued to win market share, growing total sales for the 13 weeks by 14.2%, total revpar by 8.8% and total room nights sold by 11.2% to four million. Total occupancy was 80.7%, up 4.2% pts on last year and the number of rooms available increased by 5.5%.
   
• In a buoyant London market we grew total sales by 10.4% in the quarter with a 7.6% increase in the number of rooms available. Our total revpar grew by 3.6% with occupancy remaining high at 86.1%. For the London hotel market*4 total revpar grew by 3.6% in the quarter, and for the Midscale and Economy sector it grew by 8.7%.
   
• In the UK regions our total sales grew by 15.3% in the quarter, with a 5.2% increase in the number of rooms available. Our total revpar was up 9.9% with occupancy at 80.0%, up 4.9% pts. For the regional hotel market total revpar grew by 9.2%, and by 13.9% for the Midscale and Economy sector. 
   
• Restaurants delivered a good performance in the quarter, as well as benefitting from favourable weather comparatives, with like for like sales growth of 4.4% and like for like covers up 2.6%.
   
• 208 UK rooms were opened in the quarter and for the full year we plan to open around 4,500 UK rooms and five joint site restaurants.
   
Costa
• Costa grew worldwide system sales by 14.6% to £323.0 million and within this franchise system sales grew by 13.1% to £126.5 million.
   
• UK Retail system sales grew by 15.2% to £174.4 million, with equity stores delivering like for like sales growth of 4.5%. We opened 36 net new UK stores in the quarter. 
   
• Costa Enterprises (including Costa Express) delivered system sales of £79.5 million, up 18.5%. There are now 3,729 Costa Express units.
   
• International system sales grew by 9.1% to £69.1 million, with growth of 4.2% in EMEI and 24.0% in Costa Asia. 
   
• We plan to open around 300 net new stores and 600 Costa Express units in the full year.

Group
The strong financial position of the group remains unchanged. At our full year results in April 2014 we expected capital expenditure of £360 million for 2014/15. Since then we have acquired two additional freehold properties in London and now anticipate capital expenditure to be over £400 million. We continue to see opportunities for further attractive freehold acquisitions.
   
SSP announces intention to float: SSP Group, the international operator of branded food and beverage outlets, has announced its intention to proceed with an initial public offering to raise £500m. As at 31 March 2014, SSP operated 1,981 branded food and beverage outlets in travel locations across 29 countries in the UK, Europe, North America, Asia Pacific and the Middle East. Headquartered in London, SSP operates its outlets under concession agreements with clients, which are typically the owners and operators of airports and railway stations. The Group serves on average one million customers daily and on average employs 30,000 staff. For the financial year ended 30 September 2013, SSP reported revenues of £1,827.2m and underlying Ebitda of £152.7m. SSP recently announced its results for the six months ended 31 March 2014, including a 4.6% increase in revenues on constant currency terms (+2.2% at actual exchange rates) relative to the corresponding period in the preceding financial year, and a 12.6% increase in Underlying Ebitda on constant currency terms (+8.0% at actual exchange rates). Kate Swann, chief executive of SSP, said: “SSP is a leader in the fast growing international travel food and beverage market and is focused on the more rapidly growing sectors of air and rail. The business is geographically diversified with good representation in the UK, Europe, North America, the Middle East and Asia Pacific. The Group has built strong relationships with its clients and brand partners, and has established a reputation as an expert in its field. An IPO is the appropriate next step for a business of SSP’s calibre, size and international scale and we believe that we are well-placed for life as a listed company.”

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