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Tue 25th Oct 2016 - Whitbread reports 1.9% like-for-like sale growth in First Half
Whitbread reports 1.9% like-for-like sale growth in First Half: Whitbread has reported like-for-like sales growth of 1.9% in the six months to 1 September. It claimed it is winning market share in both Premier Inn and Costa with group total sales growth of 8.1%. Premier Inn total sales growth was 8.9% and like-for-like sales were up 2.4%. Costa total sales grew 10.7%, and UK like-for-like sales were up 2.3%. The company’s pub restaurants delivered total sales growth of 1.5% with like-for-like sales up 0.3%, ‘slightly ahead of a soft pub restaurant market outside the M25’.. Of its pub restaurant business, it stated: “We continue to make good progress in rejuvenating and consolidating our restaurant brands and now have 113 Beefeaters under the new brand proposition. We will convert our seven Taybarns sites to Brewers Fayre during the second half. Our new city centre Bar + Block concept is performing well with a further two openings planned for the second half of the year. We continue to invest in our team and tools and have implemented a new labour scheduling tool in all sites as well as new training schemes for our teams.” Group underlying profit before tax rose 5.4% to £307.0 million with total sales up 8.1% to £1,555.9m. Premier Inn and Restaurants grew underlying operating profit by 8.9% to £271.5 million. Costa underlying operating profit decreased by 4.0% to £64.6 million due to increased investments in the first half. Exceptional items and non underlying adjustments before tax are a cost of £43.4 million (2015/16: cost £36.4 million) predominantly relating to the estimated costs associated with Premier Inn International’s withdrawal from India and South East Asia. Chief executive Alison Brittain said: “This is another good set of results from Whitbread and we continue to deliver strong growth, with total group sales increasing 8.1% to £1.6 billion. Our core brands of Premier Inn and Costa continue to win market share with total sales growing 8.9% and 10.7% and like for like sales up 2.4% and 2.3% respectively. In April this year, I identified three strategic priorities to develop our business: to grow and innovate in our core UK businesses; to focus on our strengths to grow internationally; and to build the capability and infrastructure to support long-term growth. This strategy will enable us to deliver continued growth, maintain good returns on capital and create sustainable value for our shareholders. In addition, through continued investment in our business we are creating new jobs and through our training and apprenticeship programmes we are supporting our teams to develop skills and progress their careers. I am pleased to report that we have made good progress in delivering on our three strategic priorities. We will be smoothing the phasing of our openings this year and plan to open c.3,700 new UK Premier Inn rooms and 230-250 new coffee shops worldwide. We are passionate about offering great value, outstanding service and high quality products to our customers and are investing more in driving product and digital innovation. In our hotels business, we are expanding the network of our new ‘hub by Premier Inn’ city centre hotels and making progress in consolidating and rejuvenating our restaurant brands. In Costa we are trialling new ‘finer’ coffee concepts, introducing a new fresher food range and making good progress rolling out our Costa Pronto and Drive Thru formats. Internationally, in Premier Inn we are focusing on the Middle East and German markets and the process of exiting our operations in India and South East Asia is underway. In the first half, we have ramped up investment in our core systems and infrastructure as this is key to securing our future growth, achieving cost efficiency and sustaining our market-leading brand positions. Whilst it is early in the second half and there is uncertainty in the UK’s economic outlook, we expect to deliver in line with full year expectations.” Chairman Richard Baker said: “Whitbread has delivered another good set of results with underlying profit before tax up 5.4%. We are continuing to invest in our brands to maintain our leadership positions, whilst our strong balance sheet and cash flow generation has enabled us to increase the dividend by 4.9% to 29.90p.”


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