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Tue 28th Apr 2015 - Whitbread extends targets, Harrison to step down
Whitbread extends growth milestones: Whitbread has extended its growth targets. The company now plans to have circa 85,000 Premier Inn rooms by 2020 compared to the current figure of 59,138. It also plans to grow Costa Coffee system sales to £3.5bn by 2020 compared to the current figure of £1.4bn. The achievement of these milestones would create around 15,000 new UK jobs over the next five years. The new milestones come as the company reported sales up 13.7% to £2.608bn in the year to 26 February 2015. Premier Inn total sales grew 15.3% and like-for-like sales were up 9.1%. Costa saw total sales growth of 17.9%, system sales up 16.6% and UK like-for-like sales up 6.0%. Restaurants grew total sales by 3.2% to £542.8 million with like for like sales growth of 2.1%. Profit for the year was up 13.2% to £366.1m. Richard Baker, chairman, said: “This is another strong set of results, once again demonstrating the strength of the Premier Inn and Costa brands. We have today published 2020 milestones which show our belief in the continuing profitable growth opportunities available to both of those businesses. Along with our focus on the customer and disciplined investment, it will be our people who will enable us to reach those milestones. We are very proud of our programmes to create new jobs, increase our apprenticeship opportunities and attract the best people to work in our Company.” Andy Harrison, chief executive, said: “Whitbread had an outstanding year, with a 13.7% increase in total sales, underlying earnings per share growth of 19.4% and a proposed full year dividend per share increase of 19.4%. Premier Inn, the UK’s favourite hotel chain, grew its total sales by 15.3%, combining revpar growth of 8.7% with a 6.1% increase in rooms available. We also finished the year with record occupancy of 81.3%, up 3.2% pts. Restaurants had a good year with total sales growth of 3.2% and like for like sales up 2.1%. Costa, the UK’s favourite coffee shop chain, extended its outstanding track record, with total sales growth of 17.9%, driven by UK like for like sales growth of 6.0%, 219 net new stores worldwide and 777 net new Costa Express machines. We are continuing to invest in strengthening our brands and organic network growth, including in selected international markets. Our capital investment will rise to c.£700 million in this financial year, up from £565.3 million in 2014/15. Our investment programme has created around 3,000 new UK jobs and around 1,000 apprenticeships. We are delivering good returns on our investment, with return on capital rising to 15.7%, up 0.4% pts from the prior year. Our combination of rapid organic growth and good returns is generating a strong operating cash flow of £714.2 million, up 17.8%. We are on track to deliver our 2016 and 2018 growth milestones. Today we have published new growth milestones for 2020 which highlight the scale of the opportunity ahead. Trading in the new financial year has begun on plan, with good momentum for Premier Inn and Costa, and our restaurants business is trading slightly ahead of a subdued market outside the M25.”

Whitbread chief executive to retire: Whitbread chief executive Andy Harrison has decided to retire by the end of this financial year ending February 2016, ‘ensuring a smooth transition’. A succession process, led by the chairman Richard Baker, is considering external and internal candidates. Richard Baker said: “Whitbread has gone from strength to strength under Andy’s leadership, delivering consistent rapid and profitable growth built around our strong brands and the company’s unique culture. Over the last five years our revenues have grown by 13% per annum, driving a 17% per annum growth in our earnings per share, which has increased the company’s market capitalisation from £2.5bn to £9.7bn. Whitbread has a clear strategy, ambitious growth milestones and the strength of leadership to successfully deliver these goals.” Andy Harrison said: “I have thoroughly enjoyed being part of the Whitbread family. It is a great company, which has built some of the UK’s favourite brands by putting our people and our customers at the heart of everything we do. I would like to thank all our Whitbread winning teams for their hard work and commitment, which is central to our continuing success. After 18 years as chief executive of three different public companies it is time for me to plan my retirement from full time executive life and to seek new challenges. In the meantime, it is business as usual, which means that the Whitbread team and myself remain fully focused on continuing to deliver profitable growth.”

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