Whitbread share price: Costa Coffee on track to double sales to £2bn by 2018
iNVEZZ.com, Saturday, December 14: Whitbread (LON:WTB), Britain’s biggest hotel and coffee shop operator, said its thriving Costa Coffee chain is on track to meet its target of boosting system sales for the brand from £1.0 billion in the fiscal 2012/13 year to £1.3 billion by 2016 and further to £2 billion by 2018. Capital investment of between £330 million and £400 million will be required in order to meet the targets. The growth is set to come mainly from international expansion, as the share of international system sales is targeted to increase to about 33 percent in 2018 from 22 percent in the last fiscal year. Costa Coffee is already the biggest coffee shop chain in Britain with 1,711 stores, far ahead of its nearest rivals Starbucks with about 780 stores and Nero with around 580 stores. But it intends to continue growing the chain with plans for more than 2,200 stores by 2018.
The company, which also has 1,062 stores in 30 countries in Europe, Africa and Asia, is aiming to grow their number by at least 10 percent per year. At a Costa investor day held on Thursday, it outlined ambitious expansion plans for China and France. In China, the plan is to boost the number of coffee shops from 307 currently to 500 by 2016 and further to 700 in 2018. In France, where the first Costa Coffee store was opened earlier this year, the company plans to have six stores by the end of March and sees scope for at least 100 stores within five years.
Costa Coffee said that it has achieved a 3.8 percent growth in like-for-like sales and a 100.8 percent rise in profits in the year to date. Earlier this week, Whitbread, which runs also Premier Inn hotels and pub restaurants, including Brewers Fayre and Beefeater Grill, posted a double-digit growth in total sales for its fiscal third quarter and said it is on track to deliver full year results in line with expectations (Costa and Premier Inn boost Q3 group sales).
In yesterday’s trading, Whitbread’s share price fell 0.31 percent to close at 3,499p, compared to a 0.08 percent decline in the blue chip FTSE 100 index. The stock, which has been one of the most resilient consumer stocks during the economic downturn, hit an all-time high of 3,600.62p on November 29. According to a survey of 24 analysts published by Analyst Ratings Network, Whitbread has a consensus rating of ‘hold’ and an average target price of 3,292.46p.
**As of yesterday’s close buy Whitbread shares at 3,501.00p.**
**As of yesterday’s close sell Whitbread shares at 3,499.00p.**
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